The hoardings were erected by the local Municipal Corporation, and had details about an event held on Monday, that was to be attended by Mayor Poonam Sharma and the senior-most army commander in the region, Lieutenant General KJ Singh.
March 23 is the death anniversary of Indian freedom struggle heroes Bhagat Singh, Rajguru and Sukhdev.
The hoardings show three US soldiers in full combat gear with the US flag on their uniforms. The background shows the Indian tricolour and an Indian Army logo.
When asked about the issue, Mayor Poonam Sharma said that she would order an inquiry.
"This is very sad. We are marking this day today by paying homage and remembering our martyrs because of whom we gained Independence. Officials should have been very cautious about what was being displayed," said senior BJP leader Satya Pal Jain.