Assessee, Water Corporation of Odisha Ltd. (WATCO), is  wholly owned not-for-profit company set-up by Government of Odisha. It was incorporated to oversee ring-fenced operation of water supply production and distribution system, operation and maintenance of sewage collection, treatment and operation and maintenance of sewerage network, sewage treatment and disposal. Assessee filed an application for registration under section 12A. Commissioner (E) rejected same observing that objects of assessee were in nature of business/commerce and, thus, did not fall within ambit of charitable activity as prescribed by section 2(15).On appeal the assessee contended that WATCO was a wholly owned company of Government of Odisha and was to be held as a ‘State’ making it not liable to pay income-tax.  Tribunal held that the assessee would fall under definition of ‘State’ within meaning of article 12 of Constitution of India as it satisfied tests laid down by Apex Court in case of Som Prakash Rekhi v. Union of India 1981 AIR 212 and, thus, it would be entitled for immunity from taxation under Income-tax Act, 1961 as directed under article 289 of Constitution of India. (AY. 2020-21)