Noida authority saved from paying Rs10,000 crore in income tax
An Allahabad high court order has considered the Noida authority a municipal body, exempting it from income taxnoida Updated: Apr 21, 2017 23:48 IST
A high court order on Friday has saved the Noida authority from paying Rs10,000 crore in income tax. The order, by the Lucknow bench of the Allahabad high court, considers the Noida authority a municipal body, making it eligible for exemption from income tax.
The income tax department had issued notices to the authority in 2012 directing it to pay around Rs10,000 crore in taxes between 2004 and 2015. The department considered the authority a profit-making government body that acquires farmers’ land for development and allots it to developers and industries to make a profit.
The authority, which is an industrial body, is like any other municipal agency, eligible to register itself under Section 12A of the Income Tax Act, 1961.
The Noida authority could have become financially bankrupt if the high court order had not been in its favour.
“It is a big day for the Noida authority as we had been fighting this case since 2015. An income tax tribunal had agreed to our plea that the authority is a municipal body and does not need to pay income taxes. However, the income tax department challenged the local tribunal order in the income tax appellate tribunal in Lucknow, which dismissed our plea. Subsequently, we went to the Allahabad high court that has provided us relief,” said Manmohan Mishra, financial controller, Noida authority.
The authority is facing a financial crisis as it has failed to recover around Rs15,000 crore in land dues from builders. It has only Rs1,000 crore in savings that will be spent on construction of metro projects, including the 30km Noida to Greater Noida and 6.8km City Centre to Sector 62 metro lines.
“Had we lost the high court case, the authority would have faced a huge setback. Arranging the Rs10,000 crore would not have been easy amid the realty sector slowdown when the builders are failing to pay their land dues,” said Mishra.
First Published: Apr 21, 2017 22:55 IST