In Brief
The Supreme Court examined whether the New Okhla Industrial Development Authority (NOIDA) qualifies as a local authority exempt from income tax under Section 10(20) of the Income Tax Act, 1961. NOIDA was constituted under the U.P. Industrial Area Development Act, 1976, and the Governor notified it as an industrial township. The Court held that NOIDA is not a local authority. A notification specifying an area as an industrial township under Article 243Q's proviso does not make the Authority equivalent to a Municipality. After the Finance Act 2002 amendment, 'local authority' became exhaustively defined to include only Panchayats, Municipalities, Municipal Committees, District Boards, and Cantonment Boards. NOIDA fits none of these categories and therefore cannot claim tax exemption.
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