Appeal partially allowed, income verification ordered, exemption rejected, interest levy upheld.

The Tribunal partly allowed the appeal, directing the AO to verify the correct income figure. The Tribunal upheld the rejection of exemption under Article 289(1) and Section 10(23C)(iv) of the Income Tax Act. The levy of interest under Sections 234A and 234B was also upheld.

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Issues Involved:
1. Immunity from taxation under Article 289(1) of the Constitution of India.
2. Rejection of exemption claimed under Section 10(23C)(iv) of the Income Tax Act.
3. Determination of income at Rs. 32,77,52,980 as against Rs. 19,46,56,470.
4. Levy of interest under Sections 234A and 234B of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Immunity from taxation under Article 289(1) of the Constitution of India:
The assessee argued that its income should be exempt from taxation under Article 289(1) of the Constitution, claiming that its functions are state functions and thus its income is the income of the state. The Tribunal analyzed the provisions of the Water (Prevention and Control of Pollution) Act, 1974, and the Air (Prevention and Control of Pollution) Act, 1981, and found that the funds of the board are its own and not the state's. The Tribunal cited the Supreme Court's decision in Adityapur Industrial Area Development Authority vs. Union of India, which held that the income of a statutory authority is distinct from the state's income. Therefore, the Tribunal concluded that the assessee's income could not be considered the income of the state and thus is not exempt under Article 289(1).

2. Rejection of exemption claimed under Section 10(23C)(iv) of the Income Tax Act:
The assessee contended that it should be granted exemption under Section 10(23C)(iv) of the Income Tax Act. The Tribunal noted that the Chief Commissioner of Income Tax had rejected the assessee's claim for approval under this section, and the assessee had filed a writ petition challenging this decision, which was pending before the High Court. The Tribunal upheld the CIT(A)'s direction to the AO to ascertain the status of the writ petition and decide the issue based on the High Court's directions.

3. Determination of income at Rs. 32,77,52,980 as against Rs. 19,46,56,470:
The assessee argued that the correct figure of income should be Rs. 19,46,56,470 instead of Rs. 32,77,52,980 as determined by the AO. The Tribunal directed the AO to verify the correct figure of income after providing a reasonable opportunity for the assessee to be heard.

4. Levy of interest under Sections 234A and 234B of the Income Tax Act:
The assessee contested the levy of interest under Sections 234A and 234B. The Tribunal held that the levy of such interest is automatic and mandatory, and thus, there was no reason to interfere with the AO's decision.

Conclusion:
The Tribunal partly allowed the appeal for statistical purposes, directing the AO to verify the correct income figure. The Tribunal upheld the CIT(A)'s decision regarding the rejection of exemption under Article 289(1) and Section 10(23C)(iv). The levy of interest under Sections 234A and 234B was also upheld.

Separate Judgments:
No separate judgments were delivered by different judges in this case. The decision was a collective judgment of the Tribunal.

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