Judgment

Kirpal, J.-The question involved in these appeals is whether the respondent is a local authority and, therefore, its income is exempt from tax under Section 10(20) of the Income Tax Act, 1961 (hereinafter referred to as ‘The Act’).

2. The U.P. Forest Corporation, the assessee herein, was constituted by Notification issued under Section 3 of the U.P. Forest Corporation Act, 1974. This Corporation was established for better preservation, supervision, development of forest and better exploitation of forest produce within the State of Uttar Pradesh. It took over the work which was formerly done by the forest contractors and its income was from the exploitation of forest produce and sales thereof.

3. These appeals relate to the assessment year 1977-78, 1980-81 and 1984-85. During the course of assessment proceedings, the respondent had claimed its status to be that of ‘local authority’ and, therefore, its income was liable to be exempted from levy of tax by virtue of Section 10(20) of the Act. The assessing officer rejected the claim and, in respect to the assessment year 1977-78 and 1980-81, it taxed it in the status of “artificial jurisdictional person” and in respect to the yea