ACIT, Noida V. M/s. Jaypee Sports International Ltd., Noida

ITA 4279/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4730 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 02-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY VARMA
• Keywords: Principle of natural justice; Question of law
• Section: 201(1); 11

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI H.S.SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 4279 TO 4281 /DEL/2015 (ASSESSMENT YEAR: 2011 - 12 TO 2013 - 14 ) ACIT, TDS - NOIDA, ROOM NO. 110, 1 ST FLOOR, PLOT NO. A - 2D, AAYAKAR BHAWAN, SECTOR - 24, NOIDA VS. JAPYEE SPORTS INTERNATIONAL LTD, SECTOR - 128, NOIDA PAN:AABCJ9037E (APPELLANT) (RESPONDENT) ITA NO. 4284 TO 4286/DEL/2015 (ASSESSMENT YEAR: 2011 - 12 TO 2013 - 14) ACIT, TDS - NOIDA, ROOM NO. 110, 1 ST FLOOR, PLOT NO. A - 2D, AAYAKAR BHAWAN, SECTOR - 24, NOIDA VS. JAPYEE INFRATECH LTD, SECTOR - 128, NOIDA PAN:AABCJ90 42R (APPELLANT) (RESPONDENT) ITA NO. 3844 TO 3845/DEL/2015 (ASSESSMENT YEAR: 2012 - 13 TO 2013 - 14 ) JAPYEE INFRATECH LTD, SECTOR - 128, NOIDA PAN: AABCJ90 42R VS. ACIT, TDS - NOIDA, ROOM NO. 110, 1 ST FLOOR, PLOT NO. A - 2D, AAYAKAR BHAWAN, SECTOR - 24, NOIDA (APPELLANT) (RESPONDENT) REVENUE BY : SHRI VIJAY VARMA, CIT DR ASSESSEE BY: SHRI ASHWANI KUMAR GARG, ADV DATE OF HEARING 29/08 / 2017 DATE OF PRONOUNCEMENT 31 / 08 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. TH ESE ARE THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - I, NOIDA DATED 31.03.2015 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 4279/DEL/2015 : - PAGE 2 OF 19 1. LD. CIT (A) - L, NOIDA HAS ERRED IN LAW AND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF J PAYMENT OF LEASE RENT IGNORING THE FACT THAT THE CLAUSES RECORDED IN THE LEASE DEED CLEARLY] PROVE THAT THE ASSESSEE IS A LESSEE WITHIN THE MEANING OF SECTION 1941 OF THE I.T.ACT,1961. 2 . LD. CIT (A) - L NOIDA HAS ERRED IN LAW AND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF INTEREST ON DEFERRED PAYMENT OF EDC LEASE PREMIUM U/S 194A IGNORING THE FACT THAT THE PAYMENT MADE BY THE ASSESSEE TO YEIDA UNDER THE HEAD INTEREST CANNOT B E MERELY NOMENCLATURE OF EDC (EXTERNAL DEVELOPMENT CHARGES) OWING TO THE FACT THAT THESE ARE UNIFORMLY AND PERIODICALLY MADE PAYMENTS. 3. LD. CIT(A) - 1, NOIDA HAS ERRED IN LAW AND ON FACT IN DELETING THE DEMAND ON ACCOUNT OF PAYMENTS OF BANK GURANTEE COMMI SSION IGNORING THE FACT THAT NOTIFICATION NO. 56/2012[F.NO. 275/53/2012 - IT(B)], DATED 31.12.2012 WHICH PROVIDES THAT NO TDS SHALL BE DONE ON PAYMENT LIKE BANK GUARANTEE COMMISSION IS EFFECT FROM 01.01.2013 WHILE IN THE CASE OF THE ASSESSEE THE PAYMENT OF B ANK GUARANTEE COMMISSION WAS DONE BEFORE 01.01.2013. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 4280/DEL/2015: - 4. LD. CIT (A) - L, NOIDA HAS ERRED IN LAW AND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF LEASE RENT IGNO RING THE FACT THAT THE CLAUSES RECORDED IN THE LEASE DEED CLEARLY PROVE THAT THE ASSESSEE IS A LESSEE WITHIN THE MEANING OF SECTION 1941 OF THE I.T.ACT,1961. 5. LD. CIT (A) - L NOIDA HAS ERRED IN LAW AND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF INTEREST ON DEFERRED PAYMENT OF EDC LEASE PREMIUM U/S 194A IGNORING THE FACT THAT THE PAYMENT MADE BY THE ASSESSEE TO YEIDA UNDER THE HEAD INTEREST CANNOT BE MERELY NOMENCLATURE OF EDC (EXTERNAL DEVELOPMENT CHARGES) OWING TO THE FACT THAT THESE ARE UNI FORMLY AND PERIODICALLY MADE PAYMENTS. 6. LD. CIT(A) - 1, NOIDA HAS ERRED IN LAW AND ON FACT IN DELETING THE DEMAND ON ACCOUNT OF PAYMENTS OF BANK GURANTEE COMMISSION IGNORING THE FACT THAT NOTIFICATION NO. 56/2012[F.NO. 275/53/2012 - IT(B)], DATED 31.12.2012 WHICH PROVIDES THAT NO TDS SHALL BE DONE ON PAYMENT LIKE BANK GUARANTEE COMMISSION IS EFFECT FROM 01.01.2013 WHILE IN THE CASE OF THE ASSESSEE THE PAYMENT OF BANK GUARANTEE COMMISSION WAS DONE BEFORE 01.01.2013. 4. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 4281/DEL/2015: - 7. LD. CIT (A) - L, NOIDA HAS ERRED IN LAW AND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF LEASE RENT IGNORING THE FACT THAT THE CLAUSES RECORDED IN THE LEASE DEED CLEARLY PROVE THAT THE ASSESSEE IS A LESSEE WITHIN THE MEANING OF SECTION 1941 OF THE I.T.ACT,1961. 8. LD. CIT (A) - L NOIDA HAS ERRED IN LAW AND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF INTEREST ON DEFERRED PAYMENT OF EDC LEASE PREMIUM U/S 194A IGNORING THE FACT THAT THE PAYMENT MAD E BY THE ASSESSEE TO YEIDA UNDER THE HEAD INTEREST CANNOT BE MERELY NOMENCLATURE OF EDC (EXTERNAL DEVELOPMENT CHARGES) OWING TO THE FACT THAT THESE ARE UNIFORMLY AND PERIODICALLY MADE PAYMENTS. 9. LD. CIT(A) - 1, NOIDA HAS ERRED IN LAW AND ON FACT IN DELETI NG THE DEMAND ON ACCOUNT OF PAYMENTS OF BANK GURANTEE COMMISSION IGNORING THE FACT THAT NOTIFICATION NO. 56/2012[F.NO. 275/53/2012 - IT(B)], DATED 31.12.2012 WHICH PROVIDES THAT NO TDS SHALL BE DONE ON PAYMENT LIKE BANK GUARANTEE COMMISSION IS EFFECT FROM 01 .01.2013 WHILE IN THE CASE OF THE ASSESSEE THE PAYMENT OF BANK GUARANTEE COMMISSION WAS DONE BEFORE 01.01.2013. 5. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 4284/DEL/2015: - PAGE 3 OF 19 1. LD. CIT(A) - 1, NOIDA HAS ERRED IN LAW AN D ON FACTS IN DELETI NG THE DEMAND ON ACCOUNT OF PAYMENT OF LEASE RENT IGNORING THE FACT THAT THE CLAUSES RECORDED IN THE LEAS DEED CLEARLY PROVE THAT THE ASSESSES IS A LESSEE WITHIN THE MEANING OF SECTION 1941 OF THE I. T. ACT, 1961. 2. ID. CIT(A) - 1, NOIDA HAS ERRED I N LAW AND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF INTEREST ON DEFERRED PAYMENT OF F.DC LEASE PREMIUM U/S 194A IGNORING THE FACT THAT THE PAYMENT MADE BY THE ASSESSEE TO YEEDA UNDER THE HEAD INTEREST CANNOT HE MERELY NOMENCLATURE OF EDO (EXTE RNAL DEVELOPMENT CHARGES) OWING TO THE FACT THAT THESE ARE UNIFORMLY AND PERIODICALLY MADE PAYMENTS. 3. LD CI T(A) - 1, NOIDA HAS ERRED IN LAW UND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF INTEREST ON NON - CONVERTIBLE DEBENTURES IGNORING THE. FA CT THAT THE PROVISIONS OF SECTION 194A ARE APPLICABLE ON PAYMENT OF INTEREST ON NON - CONVERTIBLE DEBENTURES. 6. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 4285/DEL/2015: - 1. LD. CIT(A) - 1, NOIDA HAS ERRED IN LAW AND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF LEASE RENT IGNORING THE FACT THAT THE CLAUSES RECORDED IN THE LEASE DEED CLEARLY PROVE THAT THE ASSESSEE IS A LESSEE WITHIN THE MEANING OF SECTION 1941 OF THE I.T.ACT,1961. 2. LD. CIT(A) - 1 NOIDA HAS ERRED IN LAW AND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF INTEREST ON DEFERRED PAYMENT OF EDC LEASE PREMIUM U/S 194A IGNORING THE FACT THAT THE PAYMENT MADE BY THE ASSESSEE TO YEIDA UNDER THE HEAD INTEREST CANNOT BE M ERELY NOMENCLATURE OF EDC (EXTERNAL DEVELOPMENT CHARGES) OWING TO THE FACT THAT THESE ARE UNIFORMLY AND PERIODICALLY MADE PAYMENTS. 3. LD. CIT(A) - 1, NOIDA HAS ERRED IN LAW AND ON FACT IN DELETING THE DEMAND ON ACCOUNT OF PAYMENTS OF INTEREST ON NON - CONVER TIBLE DEBENTURES IGNORING THE FACT THAT THE PROVISIONS OF SECTION 19 APPLICABLE ON PAYMENT OF INTEREST ON NON - CONVERTIBLE DEBENTURES. 7. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 4286/DEL/2015: - 1. LD. CIT(A) - 1, NOIDA HAS ERRED IN LA W AND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF LEASE RENT IGNORING THE FACT THAT THE CLAUSES RECORDED IN THE LEASE DEED CLEARLY PROVE THAT THE ASSESSEE IS A LESSEE WITHIN THE MEANING OF SECTION 1941 OF THE I.T.ACT,1961. 2. LD. CIT(A) - 1 NOI DA HAS ERRED IN LAW AND ON FACTS IN DELETING THE DEMAND ON ACCOUNT OF PAYMENT OF INTEREST ON DEFERRED PAYMENT OF EDC LEASE PREMIUM U/S 194A IGNORING THE FACT THAT THE PAYMENT MADE BY THE ASSESSEE TO YEIDA UNDER THE HEAD INTEREST CANNOT BE MERELY NOMENCLATU RE OF EDC (EXTERNAL DEVELOPMENT CHARGES) OWING TO THE FACT THAT THESE ARE UNIFORMLY AND PERIODICALLY MADE PAYMENTS. 3. LD. CIT(A) - 1, NOIDA HAS ERRED IN LAW AND ON FACT IN DELETING THE DEMAND ON ACCOUNT OF PAYMENTS OF INTEREST ON NON - CONVERTIBLE DEBENTURES IGNORING THE FACT THAT THE PROVISIONS OF SECTION 194A ARE APPLICABLE ON PAYMENT OF INTEREST ON NON - CONVERTIBLE DEBENTURES. 8. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 4284/DEL/2015: - 1. THAT THE LEARNED ASSESSING OFFICER [LD. AO] H AS ERRED ON FACTS AND IN LAW IN HOLDING THE APPELLANT AS ASSESSEE IN DEFAULT U/S 201(1) OF THE INCOME TAX ACT (THE ACT) FOR A SUM OF RS. 44,067/ - FOR NON - DEDUCTION OF TAX AT SOURCE FROM LEASE RENT PAYMENTS TO YAMUNA EXPRESSWAY INDUSTRIAL DEVELOPMENT AUTHOR ITY (YEIDA) AND FURTHER HOLDING IT LIABLE FOR INTEREST U/ S 201(1A) OF RS. PAGE 4 OF 19 13,665/ - AND THE LEARNED CIT (APPEALS) [LD. CIT(A)] HAS ERRED IN SUSTAINING THE SAME. 2. THAT THE ORDER INVOLVED OF THE LD. AO IS UNLAWFUL AND AGAINST PRINCIPLES OF NATURAL JUSTICE WITHOUT PROVIDING SUFFICIENT AND PROPER LAWFUL OPPORTUNITY TO THE APPELLANT AND THE LD. CIT(A) HAS ERRED IN NOT QUASHING THE SAME. 3. THAT THE ORDER OF LD. CIT(A) HOLDING THE APPELLANT AS ASSESSEE IN DEFAULT U/S 201(1) FOR RS. 44,067/ - AND FURTHER HOLDING IT LIABLE FOR INTEREST U/S 201(1A) OF RS. 13,665/ - ARE BASED ON ERRONEOUS VIEWS, NON APPRECIATION OF FACTS AND LAW CONTRARY TO BINDIN G CASE LAWS IN THE APPELLANT'S FAVOUR, WITHOUT PROPER CONSIDERATION AND REBUTTAL OF FILINGS AND SUBMISSIONS ON RECORD. 4. THAT THE LD. AO HAS ERRED ON THE FACT AND IN LAW IN HOLDING THE APPELLANT AS ASSESSEE - IN - DEFAULT U/S 201 OF THE ACT FOR NON DEDUCTION OF TAX AT SOURCE (IN THE SUM OF RS 44,067/ - ) FROM LEASE RENT PAYMENTS TO THE YEIDA IN RESPECT OF THE 90 YEARS LEASES OF LAND. THE LD. CIT(A) HAS ERRED IN UPHOLDING THE VIEW OF THE LD. AO. 5. THAT THE GROUNDS OF APPEAL, AS HEREIN ARE WITHOUT PREJUDICE TO EA CH OTHER. 6. THAT ORDER OF THE LD. CIT(A) IS AGAINST LAW AND FACTS OF THE CASE INVOLVED. 9. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 428 5 /DEL/2015: - 1. THAT THE LEARNED ASSESSING OFFICER [LD. AO] HAS ERRED ON FACTS AND IN LAW IN HOLDI NG THE APPELLANT AS ASSESSEE IN DEFAULT U/S 201(1) OF THE INCOME TAX ACT (THE ACT) FOR A SUM OF RS. 43,948/ - FOR NON - DEDUCTION OF TAX AT SOURCE FROM LEASE RENT PAYMENTS TO YAMUNA EXPRESSWAY INDUSTRIAL DEVELOPMENT AUTHORITY (YEIDA) AND FURTHER HOLDING IT LI ABLE FOR INTEREST U/S 201(1A) OF RS. 9,663/ - AND THE LEARNED CIT (APPEALS) [LD. CIT(A)] HAS ERRED IN SUSTAINING THE SAME. 2. THAT THE ORDER INVOLVED OF THE LD. AO IS UNLAWFUL AND AGAINST PRINCIPLES OF NATURAL JUSTICE WITHOUT PROVIDING SUFFICIENT AND PROPER LAWFUL OPPORTUNITY TO THE APPELLANT AND THE LD. CIT(A) HAS ERRED IN NOT QUASHING THE SAME. 3. THAT THE ORDER OF LD. CIT(A) HOLDING THE APPELLANT AS ASSESSEE IN DEFAULT U/S 201(1) FOR RS. 43,948/ - AND FURTHER HOLDING IT LIABLE FOR INTEREST U/S 201(1A) OF RS. 9,663/ - ARE BASED ON ERRONEOUS VIEWS, NON APPRECIATION OF FACTS AND LAW CONTRARY TO BINDING CASE LAWS IN THE APPELLANT'S FAVOUR, WITHOUT PROPER CONSIDERATION AND REBUTTAL OF FILINGS AND SUBMISSIONS ON RECORD. 4. THAT THE LD. AO HAS ERRED ON THE FACT A ND IN LAW IN HOLDING THE APPELLANT AS ASSESSEE - IN - DEFAULT U/S 201 OF THE ACT FOR NON DEDUCTION OF TAX AT SOURCE (IN THE SUM OF RS 43,948/ - ) FROM LEASE RENT PAYMENTS TO THE YEIDA IN RESPECT OF THE 90 YEAR LEASES OF LAND. THE LD. CIT(A) HAS ERRED IN UPHOLDIN G THE VIEW OF THE LD. AO. 5. THAT THE GROUNDS OF APPEAL, AS HEREIN ARE WITHOUT PREJUDICE TO EACH OTHER. 6. THAT ORDER OF THE LD. CIT(A) IS AGAINST LAW AND FACTS OF THE CASE INVOLVED. 10. IN THE PRESENT BUNCH OF APPEALS 3 APPEALS ARE PREFERRED BY REVENUE IN C ASE OF M/S JAYPEE SPORTS INTERNATIONAL LTD FOR ASSESSMENT YEAR 2011 - 12, 12 - 13 AND 13 14 CONTESTING THE ISSUE THAT A. LEASE RENT ARE COVERED UNDER PROVISIONS OF SECTION 194I OF THE INCOME TAX ACT B. PAYMENT OF INTEREST ON DEFERRED PAYMENT OF LEASE PREMIUM IS S UBJECT TO TAX DEDUCTION AT SOURCE UNDER SECTION 194A OF THE INCOME TAX ACT C. THE BANK GUARANTEE COMMISSION IS SUBJECT TO TAX DEDUCTION AT SOURCE UNDER SECTION 194H OF THE INCOME TAX ACT PAGE 5 OF 19 11. IN ALL THESE CASES THE ASSESSING OFFICER HAS RAISED DEMAND UNDER SECTIO N 201 (1) AND SECTION 201(1A) OF THE INCOME TAX ACT. ON APPEAL BEFORE THE LD. CIT APPEAL THE DEMANDS WERE CANCELLED AND THEREFORE REVENUE IS IN APPEAL BEFORE US. 12. LD. CIT DR HAS ANNUAL LEASE RENT PAID BY THE ASSESSEE AT THE RATE OF 2.5% OF LEASE PREMIUM IS RENT UNDER SECTION 190 4I OF THE INCOME TAX ACT AND THEREFORE THE LD. CIT AS ORDER IS NOT SUSTAINABLE. HE REFERRED TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THIS MATTER WHICH COVERS THE ISSUE THAT TAX IS REQUIRED TO BE DEDUCTED UNDER SECTION 19 4I OF THE INCOME TAX ACT ON ANNUAL LEASE RENT. HE FURTHER SUBMITTED THAT THAT THE FINDING OF THE LD. CIT (A) HOLDING THAT IT IS THE RESPONSIBILITY OF THE ASSESSING OFFICER TO ASCERTAIN WHETHER THE PAYEE HAS PAID THE TAX ON THE PAYMENTS MADE BY THE ASSESSEE IS NOT IN ACCORDANCE WITH THE LAW. HE FURTHER REFERRED TO THE PROVISO TO SECTION 201(1) OF THE INCOME TAX ACT WHICH ENABLES THE DEDUCTOR TO FURNISH A CERTIFICATE THAT THE DEDUCT THE HAS FILED RETURN AND PAID TAX THEREON. HE FURTHER SUBMITTED THAT THE INTE REST LIABILITY UNDER SECTION 201 (1A) TILL THAT TIME, REST ON THE TAX DEDUCTOR. 13. WITH RESPECT TO THE DEDUCTION OF TAX ON THE INTEREST HE RELIED ON THE ORDERS OF THE LD. AO. HE FURTHER LIST RELIANCE ON THE DECISION OF HONBLE MADRAS HIGH COURT 239 ITR 136 HOLDING THAT INTEREST PAYMENT BEYOND THE PERIOD OF CREDIT FOR SUPPLY OF GOODS ON CREDIT IS COVERED UNDER SECTION 2 (28A) OF THE ACT. HE FURTHER RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN CASE OF VIJAY SHIP BREAKING CORPORATION 261 ITR 113. 14. WITH RESPECT TO THE TAX DEDUCTION AT SOURCE ON THE BANK GUARANTEE HE RELIED U PON THE ORDER OF THE LD. ASSESSING OFFICER. 15. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT ON THE GROUND NO. 1. THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF THE HONBLE DELHI HIGH COURT AND ON GROUND NO. 2 THE ISSUE IS SQUARELY C OVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE ALLOWABLE HIGH COURT. ON THE ISSUE OF THE BANK GUARANTEE COMMISSION, HE SUBMITTED THAT IT IS A PRINCIPLE - TO - PRINCIPLE TRANSACTION TO PROVISIONS OF SECTION 194H OF THE ACT DOES NOT APPLY. 16. WE HA VE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. 17. ON THE ISSUE OF DEDUCTION OF TAX AT SOURCE ON ANNUAL MAINTENANCE CHARGES PAID BY THE ASSESSEE TO YAMUNA DEVELOPMENT EXPRESS AUTHORITY LIMITED UNDER SECTION 194I O F THE INCOME TAX ACT IS NOW SQUARELY COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF HONBLE DELHI HIGH COURT [2017] 78 TAXMANN.COM 263 (DELHI) RAJESH PAGE 6 OF 19 PROJECTS (INDIA) (P.) LTD. V. COMMISSIONER OF INCOME - TAX (TDS) - II * WHERE IN IT HAS BEEN HELD THAT A MOUNTS CONSTITUTING ANNUAL LEASE RENT, EXPRESSED IN TERMS OF PERCENTAGE (E.G. 1%) OF THE TOTAL PREMIUM FOR THE DURATION OF THE LEASE, ARE RENT, AND THEREFORE SUBJECT TO TDS. SINCE THE PETITIONERS COULD NOT MAKE THE DEDUCTIONS DUE TO THE INSISTENCE OF GNOIDA, A DIRECTION IS ISSUED TO THE SAID AUTHORITY (GNOIDA) TO COMPLY WITH THE PROVISIONS OF LAW AND MAKE ALL PAYMENTS, WHICH WOULD HAVE BEEN OTHERWISE PART OF THE DEDUCTIONS, FOR THE PERIODS, IN QUESTION, TILL END OF THE DATE OF THIS JUDGMENT. IN VIEW OF THIS GROUND NO. 1 OF THE APPEAL OF THE REVENUE IS ALLOWED. NOW IF THE ASSESSEE WISHES TO TAKE BENEFIT OF THE PROVISO TO SECTION 201 OF THE INCOME TAX ACT, THEN IT IS FOR THE ASSESSEE TO FURNISH NECESSARY DETAIL, SO THAT ASSESSEE CANN OT BE TREATED AS ASSESSEE IN DEFAULT WITH RESPECT TO THE AMOUNT OF TAX DEDUCTIBLE. AS THE PROVISO ADDED TO SECTION 201 IS FOR MITIGATING ANY HARDSHIP THEREFORE WE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO THE ASSESSEE TO FURNISH NECESSARY DETAIL IS PROVIDED THEREIN AND TO DEPOSIT NECESSARY INTEREST UNDER SECTION 201(1A) OF THE ACT IN ACCORDANCE WITH THE LAW. 18. WITH RESPECT TO THE INTEREST THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HE SUBM ITTED THAT FROM INTEREST COMPONENT OF THE INSTALLMENT OF LEASE PREMIUM AND EXTERNAL DEVELOPMENT CHARGES PAID TO YAMUNA DEVELOPMENT AUTHORITY. BOTH THE PARTIES CONFIRMED BEFORE US THAT ABOVE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF HON'BLE ALLAHABAD HIGH COURT IN 386 ITR 504 IN CIT (TDS) VS. CANARA BANK AS UNDER: - 5. THE ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL IS AS TO WHETHER NOIDA IS A CORPORATION ENTITLED FOR EXEMPTION FROM DEDUCTION OF TAX AT SOURCE UNDER THE PROVISIONS OF THE NOTIFICATION DATED OCTOBER 22, 1970, ISSUED UNDER SECTION 194A(3)(III)(F) OF THE ACT. THIS NOTIFICATION PROVIDES THAT THE PROVISIONS OF SUB - SECTION (1) OF SECTION 194A OF THE ACT SHALL NOT APPLY TO ANY CORPORATION ESTABLISHED BY A CENTRAL, STATE OR PROVINCIAL ACT. ACCORDING TO THE APPELLANTS, THE NOIDA IS NOT A CORPORATION THAT HAS BEEN ESTABLISHED BY THE INDUSTRIAL ACT AND, THEREFORE, WOULD NOT BE ENTITLED FOR EXEMPTION WHILE ACCORDING TO THE BANK, IT IS A CORPORATION ESTABLISHED BY THE INDUSTRIAL ACT AND, THEREFORE, ENTITLED FOR EXEMPTION. 6. IN ORDER TO APPRECIATE THE RIVAL CO NTENTIONS, IT WILL BE APPROPRIATE TO REFER TO THE PROVISIONS OF THE ACTS INVOLVED AND THE NOTIFICATION. 7. SECTION 194A(1) OF THE ACT PROVIDES THAT ANY PERSON, NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING TO A RESIDENT ANY INCOME BY WAY OF INTEREST OTHER THAN INCOME BY WAY OF INTEREST ON SECURITIES, SHALL, AT THE TIME OF CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHIC HEVER IS EARLIER, DEDUCT INCOME - TAX THEREON AT PAGE 7 OF 19 THE RATES IN FORCE. HOWEVER, SUB - SECTION (3) OF SECTION 194A PROVIDES THAT THE PROVISIONS OF SUB - SECTION (1) SHALL NOT APPLY IN CERTAIN CASES. IN THE PRESENT CASE, WE ARE CONCERNED WITH SUB - CLAUSE (III)(F) OF SECTION 194A(3) WHICH EXEMPTS INCOME CREDITED OR PAID TO SUCH OTHER INSTITUTION, ASSOCIATION OR BODY OR CLASSES OR CLASS OF INSTITUTIONS, ASSOCIATION OR BODIES WHICH THE CENTRAL GOVERNMENT MAY, FOR REASONS TO BE RECORDED IN WRITING, NOTIFY IN THIS BEHALF I N THE OFFICIAL GAZETTE. IT IS UNDER THIS PROVISION THAT THE NOTIFICATION DATED OCTOBER 22, 1970, WAS ISSUED BY THE CENTRAL GOVERNMENT WHICH READS AS FOLLOWS : 'IN PURSUANCE OF SUB - CLAUSE (F) OF CLAUSE (III) OF SUB - SECTION (3) OF SECTION 194A OF THE INCOME - TAX ACT, 1961 (43 OF 1961), THE CENTRAL GOVERNMENT HEREBY NOTIFY THE FOLLOWING FOR THE PURPOSES OF THE SAID SUB - CLAUSE : (I) ANY CORPORATION ESTABLISHED BY A CENTRAL, STATE OR PROVINCIAL ACT ; (II) ANY COMPANY IN WHICH ALL THE SHARES ARE HELD (WHETHER SI NGLY OR TAKEN TOGETHER) BY THE GOVERNMENT OR THE RESERVE BANK OF INDIA OR A CORPORATION OWNED BY THAT BANK ; AND (III) ANY UNDERTAKING OR BODY, INCLUDING A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 (21 OF 1860), FINANCED WHOLLY BY THE GOVERNMENT.' 8. SRI ASHOK KUMAR AND SRI PRAVEEN KUMAR, LEARNED COUNSEL APPEARING FOR THE APPELLANTS SUBMIT THAT NOIDA IS NOT A 'LOCAL AUTHORITY' WITHIN THE MEANING OF SECTION 10(20) OF THE ACT AFTER APRIL 1, 2003, IN VIEW OF A DIVISION BENCH JUDGMENT OF TH IS COURT IN WRIT TAX NO. 1338 OF 2005 (NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY V. CHIEF CIT DECIDED ON FEBRUARY 28, 2011 AND, THEREFORE, IT WAS REQUIRED TO FILE RETURN OF INCOME. IT IS ALSO THEIR SUBMISSION THAT NOIDA IS NOT A 'CORPORATION' ESTABLISHED BY A STATE ACT AND, THEREFORE, IS ALSO NOT ENTITLED FOR EXEMPTION UNDER SECTION 194A OF THE ACT FROM DEDUCTING TAX AT SOURCE. IN THIS CONNECTION LEARNED COUNSEL HAVE DRAWN A DISTINCTION BETWEEN A CORPORATION THAT IS ESTABLISHED BY A CENTRAL, STATE OR PROVI NCIAL ACT AND A CORPORATION THAT IS ESTABLISHED UNDER A CENTRAL, STATE OR PROVINCIAL ACT. IN SUPPORT OF THIS CONTENTION, LEARNED COUNSEL HAVE PLACED RELIANCE UPON THE DECISION OF THE SUPREME COURT IN DALCO ENGINEERING P. LTD. V. SATISH PRABHAKAR PADHYE [20 10] 164 COMP CAS 275 (SC) ; [2010] 4 SCC 378. 9. SRI BALBIR SINGH, LEARNED SENIOR COUNSEL APPEARING FOR THE BANK ASSISTED BY SRI ABHINAV MEHROTRA AND SRI ANKIT VIJAYWARGIYA HAS, WHILE RELYING UPON THE SAME DECISION OF THE SUPREME COURT IN DALCO ENGINEERING PVT. LTD. (SUPRA) SUBMITTED THAT NOIDA IS A CORPORATION ESTABLISHED BY THE INDUSTRIAL ACT AND, THEREFORE, ENTITLED FOR EXEMPTION FROM DEDUCTION OF INCOME - TAX AT SOURCE. 10. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS ADVANCED BY LEARNED COUNS EL FOR THE PARTIES. 11. IN ORDER TO APPRECIATE THE CONTENTIONS ADVANCED BY LEARNED COUNSEL FOR THE PARTIES, IT WILL BE APPROPRIATE AT THIS STAGE TO REFER TO THE PROVISIONS OF THE INDUSTRIAL ACT SO AS TO DETERMINE WHETHER NOIDA IS A CORPORATION THAT HAS BEE N ESTABLISHED BY A STATE ACT OR IT HAS BEEN ESTABLISHED UNDER A STATE ACT. PAGE 8 OF 19 12. THE STATE ACT IN ISSUE IS THE INDUSTRIAL ACT. THE PREAMBLE TO THE SAID ACT STATES THAT IT IS AN ACT TO PROVIDE FOR THE CONSTITUTION OF AN AUTHORITY FOR THE DEVELOPMENT OF CERTAI N AREAS IN THE STATE INTO INDUSTRIAL AND URBAN TOWNSHIP AND FOR MATTERS CONNECTED THEREWITH. SECTION 3 PROVIDES THAT THE STATE GOVERNMENT MAY, BY NOTIFICATION, CONSTITUTE FOR THE PURPOSES OF THE ACT, AN AUTHORITY TO BE CALLED (NAME OF THE AREA) INDUSTRIAL DEVELOPMENT AUTHORITY, FOR ANY INDUSTRIAL DEVELOPMENT AREA. SUB - SECTION (2) OF SECTION 3 ALSO PROVIDES THAT THE AUTHORITY SHALL BE A BODY CORPORATE, WHILE SUB - SECTION (3) PROVIDES FOR THE CONSTITUTION OF THE AUTHORITY. 'AUTHORITY' HAS BEEN DEFINED UNDER SE CTION 2(B) TO MEAN AUTHORITY CONSTITUTED UNDER SECTION 3 OF THE ACT. THE STATE GOVERNMENT BY NOTIFICATION DATED APRIL 17, 1976, DECLARED THAT THE AREA COMPRISING THE VILLAGES MENTIONED IN THE SCHEDULE ANNEXED WITH THE NOTIFICATION SHALL BE AN 'INDUSTRIAL D EVELOPMENT AREA' CALLED 'NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY'. THE CONSTITUTION OF THE AUTHORITY HAS ALSO BEEN PROVIDED AS ALSO THE LIST OF 37 VILLAGES OF TEHSIL SIKANDARABAD OF DISTRICT BULANDSHAHR. THE CONSTITUTION OF THE AUTHORITY IS AS FOLLOWS : (I) SECRETARY TO THE GOVERNMENT, UTTAR PRADESH, INDUSTRIES DEPARTMENT, EX - OFFICIO MEMBER CHAIRMAN. [UNDER CLAUSE (A)] (II) SECRETARY TO THE GOVERNMENT, UTTAR PRADESH, PUBLIC WORKS DEPARTMENT, EX - OFFICIO MEMBER [UNDER CLAUSE (B)] (III) SECRETARY TO THE GOVERNMENT, UTTAR PRADESH, LOCAL SELF - GOVERNMENT DEPARTMENT, EX - OFFICIO MEMBER [UNDER CLAUSE (C)] (IV) SECRETARY TO THE GOVERNMENT, UTTAR PRADESH, FINANCE DEPARTMENT, EX - OFFICIO MEMBER [UNDER CLAUSE (D)] (V) MANAGING DIRECTOR, U.P. STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD., EX - OFFICIO MEMBER [UNDER CLAUSE (E)] (VI) CHAIRMAN, U.P. STATE ELECTRICITY BOARD, EX - OFFICIO MEMBER [NOMINATED UNDER CLAUSE (F)] (VII) MANAGING DIRECTOR, U.P. JAL NIGAM, EX - OFFICIO MEMBER [NOMINATED UNDER CLAUSE (F)] (VIII) CHIEF ENGINEER, IRRIGATION DEPARTMENT, U.P. EX - OFFICIO MEMBER [NOMINATED UNDER CLAUSE (F)] PAGE 9 OF 19 (IX) CHIEF TOWN AND COUNTRY PLANNER, U.P., EX - OFFICIO MEMBER [NOMINATED UNDER CLAUSE (F)] (X) (DISTRICT MAGISTRATE), SECY. PLANNING, BULANDSHAHR, EX - OFFICIO MEMBER [NOMINATED UNDER CLAUSE (F)] (XI) CHIEF EXECUTIVE OFFICER MEMBER - SECRETARY [UNDER CLAUSE (G)] 13. SECTION 6 DEALS WITH THE OBJECT AND THE FUNCTIONS OF THE AUTHORITY. THE OBJECT IS TO SECURE THE PLANNED DEVELOPMENT OF THE INDUSTRIAL DEVELOPMENT AREAS. THE FUNCTIONS AMONGST OTHERS ARE : (I) TO ACQUIRE LAND IN THE INDUSTRIAL DEVELOPMENT AREA BY AGREEMENT OR THROUG H PROCEEDINGS UNDER THE LAND ACQUISITION ACT FOR THE PURPOSE OF THE ACT ; (II) TO PREPARE A PLAN FOR THE DEVELOPMENT OF THE INDUSTRIAL AREA ; AND (III) TO PROVIDE AMENITIES. 14. SECTION 11 DEALS WITH LEVY OF TAX. IT PROVIDES THAT FOR THE PURPOSES OF PROVID ING, MAINTAINING OR CONTINUING ANY AMENITIES IN THE INDUSTRIAL DEVELOPMENT AREA, THE AUTHORITY MAY WITH THE PREVIOUS APPROVAL OF THE STATE GOVERNMENT, LEVY SUCH TAXES AS IT MAY CONSIDER NECESSARY IN RESPECT OF ANY SITE OR BUILDING ON THE TRANSFEREE OR OCCU PIER THEREOF, PROVIDED THAT THE TOTAL INCIDENCE OF SUCH TAX SHALL NOT EXCEED TWENTY FIVE PER CENT. OF THE ANNUAL VALUE OF SUCH SITE OR BUILDING. 15. SECTION 20 DEALS WITH THE FUNDS OF THE AUTHORITY AND SUB - SECTION (1) OF SECTION 20 IS AS FOLLOWS : '20. FUN D OF THE AUTHORITY. (1) THE AUTHORITY SHALL HAVE AND MAINTAIN ITS OWN FUND TO WHICH SHALL BE CREDITED (A) ALL MONEYS RECEIVED BY THE AUTHORITY FROM THE STATE GOVERN MENT BY WAY OF GRANTS, LOANS, ADVANCES OR OTHERWISE ; (B) ALL MONEYS BORROWED BY THE AUT HORITY FROM SOURCE OTHER THAN THE STATE GOVERNMENT BY WAY OF LOANS OR DEBENTURES ; (C) ALL FEES, TOLLS AND CHARGES RECEIVED BY THE AUTHORITY UNDER THE ACT, (D) ALL MONEYS RECEIVED BY THE AUTHORITY FROM THE DISPOSAL OF LANDS, BUILDINGS AND OTHER PROPERTIES MOVABLE AND IMMOVABLE ; AND (E) ALL MONEYS RECEIVED BY THE AUTHORITY BY WAY OF RENTS AND PRO FITS OR IN ANY OTHER MANNER OR FROM ANY OTHER SOURCE.' 16. SECTION 21 DEALS WITH THE BUDGET OF THE AUTHORITY WHILE SECTION 22 DEALS WITH THE ACCOUNTS AND AUDIT. THESE SECTIONS ARE REPRODUCED BELOW : PAGE 10 OF 19 '21. BUDGET OF THE AUTHORITY. THE AUTHORITY SHALL PREPARE IN SUCH FORM AND AT SUCH TIME EVERY YEAR AS THE STATE GOVERNMENT MAY SPE CIFY, A BUDGET IN RESPECT OF THE FINANCIAL YEAR NEXT ENSUING SHOWING THE ESTIMATED RECEIPTS AND EXPENDITURE OF THE AUTHORITY. 22. ACCOUNTS AND AUDIT. (1) THE AUTHORITY SHALL MAINTAIN PROPER ACCOUNTS AND OTHER RELEVANT RECORDS AND PREPARE ANNUAL STATEM ENT OF ACCOUNTS INCLUDING THE BALANCE - SHEET IN SUCH FORM AS THE STATE GOVERNMENT MAY SPECIFY. (2) THE ACCOUNTS OF THE AUTHORITY SHALL BE SUBJECT TO AUDIT ANNUALLY BY THE EXAMINER LOCAL FUND ACCOUNTS.' 17. SECTION 23 PROVIDES THAT THE AUTHORITY SHALL PREPAR E FOR EVERY YEAR A REPORT OF ITS ACTIVITIES DURING THAT YEAR AND SUBMIT THE REPORT TO THE STATE GOVERNMENT IN SUCH FORM AND ON OR BEFORE SUCH DATE AS THE STATE GOVERNMENT MAY SPECIFY AND SUCH REPORT SHALL BE LAID BEFORE BOTH THE HOUSES OF THE LEGISLATURE. 18. SECTION 41 DEALS WITH THE CONTROL BY THE STATE GOVERNMENT WHILE SECTION 58 DEALS WITH THE DISSOLUTION OF THE AUTHORITY. SECTION 58(1) PROVIDES THAT WHERE THE STATE GOVERNMENT IS SATISFIED THAT THE PURPOSES FOR WHICH THE AUTHORITY WAS ESTABLISHED UNDER THIS ACT HAVE BEEN SUBSTANTIALLY ACHIEVED SO AS TO RENDER THE CONTINUED EXISTENCE OF THE AUTHORITY IN THE OPINION OF THE STATE GOVERNMENT UNNECESSARY, THE GOVERNMENT MAY BY NOTIFICATION IN THE GAZETTE DECLARE THAT THE AUTHORITY SHALL BE DISSOLVED WITH EFFE CT FROM SUCH DATE AS MAY BE SPECIFIED IN THE NOTIFICATION AND THE AUTHORITY SHALL BE DEEMED TO BE DISSOLVED ACCORDINGLY. 19. THE AFORESAID PROVISIONS OF THE INDUSTRIAL ACT HAVE TO BE KEPT IN MIND WHILE EXAMINING THE PROVISIONS OF SECTION 194A OF THE ACT IN ORDER TO DETERMINE WHETHER THE BANK IS EXEMPTED FROM DEDUCTION OF TAX AT SOURCE. THE RELEVANT PROVISIONS OF SECTION 194A OF THE ACT FOR THE PURPOSE OF DECIDING THE CONTROVERSY INVOLVED IN THIS APPEAL, ARE REPRODUCED BELOW : '194A. (1) ANY PERSON, NOT BEIN G AN INDIVIDUAL OR A HINDU UNDI VIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING TO A RESIDENT ANY INCOME BY WAY OF INTEREST OTHER THAN INCOME BY WAY OF INTEREST ON SECURITIES, SHALL, AT THE TIME OF CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE TI ME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT INCOME - TAX THEREON AT THE RATES IN FORCE : . . . (3) THE PROVISIONS OF SUB - SECTION (1) SHALL NOT APPLY . . . (III) TO SUCH INCOME CREDITED OR PAID TO (A) ANY BANKING COMPANY TO WHICH THE BANKING REGULATION ACT, 1949 (10 OF 1949), APPLIES, OR ANY CO - OPERATIVE SOCIETY ENGAGED IN CAR RYING ON THE BUSINESS OF BANKING (INCLUDING A CO - OPERATIVE LAND MORT GAGE BANK), OR (B) ANY FINANCIAL CORPORATION ESTABLISHED BY OR UNDER A CENTRAL, STATE OR PROVINCIAL ACT, OR PAGE 11 OF 19 (C) THE LIFE INSURANCE CORPORATION OF INDIA ESTABLISHED UNDER THE LIFE INSURANCE CORPORATION ACT, 1956 (31 OF 1956), OR (D) THE UNIT TRUST OF INDIA ESTABLISHED UNDER THE UNIT TRUST OF INDIA ACT, 1963 (52 OF 1963), OR (E) ANY COMPANY OR CO - OPERATIVE SOCIETY CARRYING ON THE BUSI NESS OF INSURANCE, OR (F) SUCH OTHER INSTITUTION, ASSOCIATION OR BODY OR CLASS OF INSTI TUTIONS, ASSOCIATIONS OR BODIES WHICH THE CENTRAL GOVERNMENT MAY, FOR REASONS TO BE RECORDED IN WRITING, NOTIFY IN THIS BEHALF IN THE OFFI CIAL GAZETTE ;' 20. A PERUSAL OF SECTION 194A(1), (3)(III) CLEARLY INDICATES THAT THE PROVISIONS OF SUB - SECTION (1) OF SECTION 194A OF THE ACT SHALL NOT APPLY TO SUCH INCOME CREDITED OR PAID TO B ANKING COMPANY TO WHICH THE BANKING REGULATION ACT, 1949 APPLIES, OR ANY CO - OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING, FINANCIAL CORPORATION ESTABLISHED BY OR UNDER A CENTRAL OR STATE ACT, LIFE INSURANCE CORPORATION OF INDIA, UNIT TRUST OF INDIA OR THOSE NOTIFIED UNDER SECTION 194A(1), (3)(III)(F) OF THE ACT. THE NOTIFICATION DATED OCTOBER 22, 1970, EXEMPTS ANY CORPORATION ESTABLISHED BY A CENTRAL, STATE OR PROVINCIAL ACT. 21. THE BANK ASSERTS THAT NOIDA IS A CORPORATION ESTABLISHED BY A STATE AC T AND IS, THEREFORE, EXEMPTED FROM DEDUCTION OF INCOME - TAX ON THE BASIS OF THE NOTIFICATION DATED OCTOBER 22, 1970, ISSUED UNDER SECTION 194A(3)(III)(F) OF THE ACT. 22. LEARNED COUNSEL FOR THE PARTIES HAVE RELIED UPON THE DECISION OF THE SUPREME COURT IN DALCO ENGINEERING PVT. LTD. (SUPRA). TWO CIVIL APPEALS WERE DECIDED. THE FIRST CIVIL APPEAL WAS FILED BY DALCO ENGINEERING PVT. LTD., A PRIVATE LIMITED COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956. THE RESPONDENT SATISH PRABHAKAR PA DHYE CLAIMED THE BENEFIT OF SECTION 47 OF THE PERSONS WITH DISABILITIES (EQUAL OPPORTUNITIES, PROTECTION OF RIGHTS AND FULL PARTICIPATION) ACT, 1995 (DISABILITIES ACT) AND FILED THE WRIT PETITION IN THE BOMBAY HIGH COURT FOR NOT ONLY QUASHING THE ORDER DAT ED OCTOBER 12, 2001, ISSUED BY THE DISABILITY COMMISSIONER SUGGESTING TO THE EMPLOYER TO UNDERTAKE THE ESSENTIAL RESPONSIBILITY OF RE - EMPLOYING THE SAID RESPONDENT TO DISCHARGE ANY OTHER WORK AS HE HAD ACQUIRED HEARING IMPAIRMENT DURING SERVICE BUT ALSO FO R A DIRECTION UPON THE EMPLOYER TO IMPLEMENT THE PROVISIONS OF THE DISABILITIES ACT BY DIRECTING THE EMPLOYER TO REINSTATE THE EMPLOYEE IN SERVICE ON A SUITABLE POST. THE BOMBAY HIGH COURT ALLOWED THE WRIT PETITION BY JUDGMENT DATED DECEMBER 23, 2005, AND DIRECTED THE EMPLOYER TO REINSTATE THE SAID RESPONDENT AND SHIFT HIM TO A SUITABLE POST AFTER HOLDING THAT THOUGH DALCO ENGINEERING WAS A PRIVATE LIMITED COMPANY BUT IT WAS AN 'ESTABLISHMENT' WITHIN THE MEANING OF SECTION 2(K) OF THE DISABILITIES ACT AND C ONSEQUENTLY SECTION 47 ENJOINED IT NOT TO DISPENSE WITH THE SERVICES OF ITS EMPLOYEE WHO HAD ACQUIRED A DISABILITY. 23. SECTION 47 OF THE DISABILITIES ACT WHICH DEALS WITH NON - DISCRIMINATION IN GOVERNMENT EMPLOYMENT IS REPRODUCED BELOW : PAGE 12 OF 19 '(1) NO ESTABLISHM ENT SHALL DISPENSE WITH, OR REDUCE IN RANK, AN EMPLOYEE WHO ACQUIRES A DISABILITY DURING HIS SERVICE : PROVIDED THAT, IF AN EMPLOYEE, AFTER ACQUIRING DISABILITY IS NOT SUIT ABLE FOR THE POST HE WAS HOLDING, COULD BE SHIFTED TO SOME OTHER POST WITH THE SAME PAY SCALE AND SERVICE BENEFITS : PROVIDED FURTHER THAT IF IT IS NOT POSSIBLE TO ADJUST THE EMPLOYEE AGAINST ANY POST, HE MAY BE KEPT ON A SUPERNUMERARY POST UNTIL A SUITABLE POST IS AVAILABLE OR HE ATTAINS THE AGE OF SUPERANNUATION, WHICHEVER IS EARLIER. (2) NO PROMOTION SHALL BE DENIED TO A PERSON MERELY ON THE GROUND OF HIS DISABILITY : PROVIDED THAT THE APPROPRIATE GOVERNMENT MAY, HAVING REGARD TO THE TYPE OF WORK CARRIED ON IN ANY ESTABLISHMENT, BY NOTIFICATION AND SUBJECT TO SUCH CONDITIONS, IF ANY, A S MAY BE SPECIFIED IN SUCH NOTI FICATION, EXEMPT ANY ESTABLISHMENT FROM THE PROVISIONS OF THIS SEC TION.' 24. THE TERM 'ESTABLISHMENT' IS DEFINED IN SECTION 2(K) OF THE DISABILITIES ACT AND IS AS FOLLOWS : '2. DEFINITIONS. IN THIS ACT, UNLESS THE CONTEXT O THERWISE REQUIRES, . . . (K) 'ESTABLISHMENT' MEANS A CORPORATION ESTABLISHED BY OR UNDER A CENTRAL, PROVINCIAL OR STATE ACT, OR AN AUTHORITY OR A BODY OWNED OR CONTROLLED OR AIDED BY THE GOVERNMENT OR A LOCAL AUTHORITY OR A GOVERNMENT COMPANY AS DEFINED I N SECTION 617 OF THE COMPANIES ACT 1956 (1 OF 1956), AND INCLUDES DEPARTMENTS OF A GOVERNMENT ;' 25. THE ISSUE THAT AROSE BEFORE THE SUPREME COURT WAS WHETHER A COMPANY INCORPORATED UNDER THE COMPANIES ACT OTHER THAN A GOVERNMENT COMPANY, AS DEFINED IN SEC TION 617 OF THE COMPANIES ACT, WAS AN 'ESTABLISHMENT' AS DEFINED IN SECTION 2(K) OF THE DISABILITIES ACT AND AS TO WHETHER THE RESPONDENT WAS ENTITLED TO CLAIM ANY RELIEF WITH REFERENCE TO SECTION 47 OF THE DISABILITIES ACT. IT IS IN THIS CONTEXT THAT THE SUPREME COURT OBSERVED THAT THE WORDS 'A CORPORATION ESTABLISHED BY OR UNDER A CENTRAL, PROVINCIAL OR STATE ACT' IS A STANDARD TERM USED IN SEVERAL ENACTMENTS TO DENOTE A STATUTORY CORPORATION ESTABLISHED OR BROUGHT INTO EXISTENCE BY OR UNDER A STATUTE. TH E SUPREME COURT REFERRED TO THE DEFINITION OF 'PUBLIC PROPERTY' CONTAINED IN THE PREVENTION OF DAMAGE TO PUBLIC PROPERTY ACT, 1984 TO MEAN ANY PROPERTY OWNED BY, OR IN THE POSSESSION OF, OR UNDER THE CONTROL OF (I) THE CENTRAL GOVERNMENT ; OR (II) ANY STAT E GOVERNMENT ; OR (III) ANY LOCAL AUTHORITY ; OR (IV) ANY CORPORATION ESTABLISHED BY, OR UNDER, A CENTRAL, PROVINCIAL OR STATE ACT ; OR (V) ANY COMPANY AS DEFINED IN SECTION 617 OF THE COMPANIES ACT, 1956 ; OR (VI) ANY INSTITUTION, CONCERN OR UNDERTAKING W HICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, SPECIFY IN THAT BEHALF PROVIDED THAT THE CENTRAL GOVERNMENT SHALL NOT SPECIFY ANY INSTITUTION, CONCERN OR UNDERTAKING UNDER THAT SUB - CLAUSE UNLESS SUCH INSTITUTION, CONCERN OR UNDERT AKING IS FINANCED WHOLLY OR SUBSTANTIALLY BY FUNDS PROVIDED DIRECTLY OR INDIRECTLY BY THE CENTRAL GOVERNMENT OR BY ONE OR MORE STATE GOVERNMENTS, OR PARTLY BY THE CENTRAL GOVERNMENT AND PARTLY BY ONE OR MORE STATE GOVERNMENTS. THE SUPREME COURT OBSERVED TH AT THE TERM IS ALWAYS USED TO DENOTE CERTAIN CATEGORIES OF AUTHORITIES WHICH ARE 'STATE' AS CONTRASTED FROM NON - STATUTORY COMPANIES WHICH DO NOT FALL UNDER THE AMBIT OF 'STATE'. PAGE 13 OF 19 26. AFTER CONSIDERING THE EARLIER JUDGMENTS RENDERED IN S. S. DHANOA V. MUNICI PAL CORPORATION, AIR 1981 SC 1395 AND EXECUTIVE COMMITTEE OF VAISH DEGREE COLLEGE V. LAKSHMI NARAIN [1976] 2 SCC 58, THE SUPREME COURT FURTHER OBSERVED THAT A 'COMPANY' IS NOT 'ESTABLISHED' UNDER THE COMPANIES ACT AS AN INCORPORATED COMPANY FORMED BY THE A CT OF ANY SEVEN OR MORE PERSONS (OR TWO OR MORE PERSONS FOR A PRIVATE COMPANY) ASSOCIATED FOR ANY LAWFUL PURPOSE SUBSCRIBING THEIR NAMES TO A MEMORANDUM OF ASSOCIATION AND BY COMPLYING WITH THE REQUIREMENTS OF THE COMPANIES ACT IN RESPECT OF REGISTRATION. THEREFORE, A 'COMPANY' IS INCORPORATED AND REGISTERED UNDER THE COMPANIES ACT AND NOT ESTABLISHED UNDER THE COMPANIES ACT. ON THE CONTRARY, THE COMPANIES ACT ITSELF ESTABLISHES THE NATIONAL COMPANY LAW TRIBUNAL AND THE NATIONAL COMPANY LAW APPELLATE TRIBUN AL AND THOSE TWO STATUTORY AUTHORITIES OWE THEIR EXISTENCE TO THE COMPANIES ACT. 27. IN THIS CONTEXT, IT WILL BE USEFUL TO REPRODUCE PARAGRAPHS 21, 22 AND 23 OF THE JUDGMENT WHICH ARE AS FOLLOWS : '21. WHERE THE DEFINITION OF 'ESTABLISHMENT' USES THE TERM 'A COR PORATION ESTABLISHED BY OR UNDER AN ACT', THE EMPHASIS SHOULD BE ON THE WORD 'ESTABLISHED' IN ADDITION TO THE WORDS 'BY OR UNDER'. THE WORD 'ESTABLISHED' REFERS TO COMING INTO EXISTENCE BY VIRTUE OF AN ENACTMENT. IT DOES NOT REFER TO A COMPANY, WHIC H, WHEN IT COMES INTO EXISTENCE, IS GOVERNED IN ACCORDANCE WITH THE PROVISIONS OF THE COMPANIES ACT. BUT THEN, WHAT IS THE DIFFERENCE BETWEEN 'ESTABLISHED BY A CENTRAL ACT' AND 'ESTABLISHED UNDER A CENTRAL ACT' ? 22. THE DIFFERENCE IS BEST EXPLAINED BY SOM E ILLUSTRATIONS. A COR PORATION IS ESTABLISHED BY AN ACT, WHERE THE ACT ITSELF ESTABLISHES THE CORPORATION. FOR EXAMPLE, SECTION 3 OF THE STATE BANK OF INDIA ACT, 1955 PROVIDES THAT A BANK TO BE CALLED STATE BANK OF INDIA SHALL BE CONSTITUTED TO CARRY ON T HE BUSINESS OF BANKING. SECTION 3 OF THE LIFE INSURANCE CORPORATION ACT, 1956 PROVIDES THAT : '3. ESTABLISHMENT AND INCORPORATION OF LIFE INSURANCE CORPORATION OF INDIA. (1) WITH EFFECT FROM SUCH DATE AS THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, APPOINT, THERE SHALL BE ESTABLISHED A CORPORATION CALLED THE LIFE INSURANCE CORPORATION OF INDIA.' STATE BANK OF INDIA AND LIFE INSURANCE CORPORATION OF INDIA ARE TWO EXAMPLES OF CORPORATIONS ESTABLISHED BY 'A CENTRAL ACT'. 23. WE MAY NEX T REFER TO THE STATE FINANCIAL CORPORATION ACT, 1951 WHICH PROVIDES FOR ESTABLISHMENT OF VARIOUS FINANCIAL CORPORATIONS UNDER THAT ACT. SECTION 3 OF THAT ACT RELATES TO ESTABLISHMENT OF STATE FINANCIAL CORPORATIONS AND PROVIDES THAT 'THE STATE GOVERNMENT M AY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, ESTABLISH A FINANCIAL CORPORATION FOR THE STATE UNDER SUCH NAME AS MAY BE SPECIFIED IN THE NOTIFICATION' AND SUCH FINANCIAL CORPORATION SHALL BE A BODY CORPORATE BY THE NAME NOTIFIED. THUS, A STATE FINANCIAL COR PORATION IS ESTABLISHED UNDER A CENTRAL ACT. THEREFORE, WHEN THE WORDS 'BY AND UNDER AN ACT' ARE PRE CEDED BY THE WORDS 'ESTABLISHED', IT IS CLEAR THAT THE REFERENCE IS TO A CORPORATION ESTABLISHED, THAT IT IS BROUGHT INTO EXISTENCE, BY AN ACT OR UNDER AN ACT. IN SHORT, THE TERM REFERS TO A STATUTORY CORPORATION AS CONTRASTED FROM A NON - STATUTORY CORPORATION INCORPORATED OR REGISTERED UNDER THE COMPANIES ACT.' (EMPHASIS SUPPLIED) PAGE 14 OF 19 28. IN S. S. DHANOA (SUPRA), ON WHICH RELIANCE WAS PLACED IN THE AFORESAID JUD GMENT, THE SUPREME COURT HAD OBSERVED : '9. CORPORATION, IN ITS WIDEST SENSE, MAY MEAN ANY ASSOCIATION OF INDIVIDUALS ENTITLED TO ACT AS AN INDIVIDUAL. BUT THAT CERTAINLY IS NOT THE SENSE IN WHICH IT IS USED HERE. CORPORATION ESTABLISHED BY OR UNDER AN ACT OF LEGISLATURE CAN ONLY MEAN A BODY CORPORATE WHICH OWES ITS MEXISTENCE, AND NOT MERELY ITS CORPORATE STATUS, TO THE ACT. FOR EXAMPLE, A MUNICIPALITY, A ZILLA PARISHAD OR A GRAM PANCHAYAT OWES ITS EXIST ENCE AND STATUS TO AN ACT OF LEGISLATURE. ON THE OTH ER HAND, AN ASSO CIATION OF PERSONS CONSTITUTING THEMSELVES INTO A COMPANY UNDER THE COMPANIES ACT OR A SOCIETY UNDER THE SOCIETIES REGISTRATION ACT OWES ITS EXISTENCE NOT TO THE ACT OF LEGISLATURE BUT TO ACTS OF PARTIES THOUGH, IT MAY OWE ITS STATUS AS A BODY CORPORATE TO AN ACT OF LEGISLATURE. 10. THERE IS A DISTINCTION BETWEEN A CORPORATION ESTABLISHED BY OR UNDER AN ACT AND A BODY INCORPORATED UNDER AN ACT. THE DISTINCTION WAS BROUGHT OUT BY THIS COURT IN SUKHDEV SINGH V. BHAGATRAM SARDAR SINGH RAGHUVAN SHI [1975] 45 COMP CAS 285 (SC) ; [1975] 1 SCC 421. IT WAS OBSERVED : '25. A COMPANY INCORPORATED UNDER THE COMPANIES ACT IS NOT CRE ATED BY THE COMPANIES ACT BUT COMES INTO EXISTENCE IN ACCORDANCE WITH THE PROVISIONS OF THE ACT.' THERE IS THUS A WELL - MARKED DISTINCTION BETWEEN A BODY CREATED BY A STATUTE AND A BODY WHICH, AFTER COMING INTO EXISTENCE, IS GOVERNED IN ACCORDANCE WITH THE PROV ISIONS OF A STATUTE.' (EMPHASIS SUPPLIED) 29. IN VAISH DEGREE COLLEGE (SUPRA), THE SUPREME COURT HAD ALSO OBSERVED AS FOLLOWS : '10 . . IN OTHER WORDS THE POSITION SEEMS TO BE THAT THE INSTITUTION CONCERNED MUST OWE ITS VERY EXISTENCE TO A STATUTE WHICH WO ULD BE THE FOUNTAINHEAD OF ITS POWERS. THE QUESTION IN SUCH CASE TO BE ASKED IS, IF THERE IS NO STATUTE, WOULD THE INSTITUTION HAVE ANY LEGAL EXISTENCE. IF THE ANSWER IS IN THE NEGATIVE, THEN UNDOUBTEDLY IT IS A STATUTORY BODY, BUT IF THE INSTITUTION HAS A SEPARATE EXISTENCE OF ITS OWN WITHOUT ANY REFERENCE TO THE STATUTE CONCERNED BUT IS MERELY GOVERNED BY THE STATUTORY PROVISIONS IT CANNOT BE SAID TO BE A STATUTORY BODY.' (EMPHASIS1 SUPPLIED) 30. THE CONTENTION OF SRI ASHOK KUMAR AND SRI PRAVEEN KUMAR, LE ARNED COUNSEL FOR THE APPELLANTS IS THAT NOIDA HAS BEEN CREATED UNDER THE PROVISIONS OF THE INDUSTRIAL ACT AND, THEREFORE, WOULD NOT BE EXEMPTED UNDER SECTION 194A OF THE ACT. THE SUBMISSION OF LEARNED COUNSEL IS THAT IT IS ONLY WHEN THE CORPORATION IS EST ABLISHED BY AN ACT, AS IS CONTEMPLATED UNDER THE NOTIFICATION DATED OCTOBER 22, 1970, THAT IT WOULD BE EXEMPTED FROM DEDUCTION OF TAX AT SOURCE UNDER SECTION 194A(1) OF THE ACT. IN THIS CONNECTION, LEARNED COUNSEL POINTED OUT THAT NOIDA HAS BEEN CONSTITUTE D BY THE STATE GOVERNMENT BY A NOTIFICATION AFTER IDENTIFYING THE AREAS. ACCORDING TO THEM, THIS IS AN EXAMPLE OF A CORPORATION HAVING BEEN CONSTITUTED UNDER THE STATE ACT. IN ORDER TO DRAW A DISTINCTION FROM A CORPORATION HAVING BEEN ESTABLISHED BY A STAT E ACT, LEARNED COUNSEL REFERRED TO THE ESTABLISHMENT OF THE STATE BANK OF INDIA UNDER THE PROVISIONS OF THE STATE BANK OF INDIA ACT, 1955 AS ALSO THE CONSTITUTION OF THE LIFE INSURANCE CORPORATION OF INDIA UNDER THE PROVISIONS OF PAGE 15 OF 19 THE LIFE INSURANCE CORPORA TION ACT, 1956. LEARNED COUNSEL POINTED OUT THAT THESE TWO CORPORATIONS HAVE BEEN ESTABLISHED BY A CENTRAL ACT. THE DISTINCTION THAT IS SOUGHT TO BE MADE BY LEARNED COUNSEL FOR THE APPELLANTS IS THAT WHEREAS THE STATE BANK OF INDIA AND LIFE INSURANCE CORPO RATION OF INDIA HAVE BEEN ESTABLISHED BY AN ACT FOR THE REASON THAT THEY HAVE BEEN NAMED IN THE ACT BUT NOIDA HAS NEITHER BEEN NAMED NOR ITS AREA HAS BEEN DETERMINED. LEARNED COUNSEL FOR THE APPELLANTS IN FACT HAVE SUBMITTED THAT LIKE NOIDA, THE STATE FINA NCIAL CORPORATION HAS ALSO BEEN ESTABLISHED UNDER THE STATE FINANCIAL CORPORATION ACT, 1951. THEIR CONTENTION IS THAT SECTION 3 OF THE STATE FINANCIAL CORPORATION ACT RELATES TO ESTABLISHMENT OF STATE FINANCIAL CORPORATIONS AND PROVIDES THAT THE STATE GOVE RNMENT MAY, LIKE IN THE CASE OF AN AUTHORITY UNDER THE PROVISIONS OF THE INDUSTRIAL ACT, BY A NOTIFICATION IN THE OFFICIAL GAZETTE, ESTABLISH A FINANCIAL CORPORATION FOR THE STATE UNDER SUCH NAME AS MAY BE SPECIFIED IN THE NOTIFICATION. ACCORDING TO HIM, T HERE IS NO DISTINCTION BETWEEN THE STATE GOVERNMENT ESTABLISHING A FINANCIAL CORPORATION UNDER SUCH NAME AS MAY BE SPECIFIED IN THE NOTIFICATION AND THE STATE GOVERNMENT CONSTITUTING AN INDUSTRIAL DEVELOPMENT AUTHORITY UNDER SECTION 3(1) OF THE INDUSTRIAL ACT. LEARNED COUNSEL, THEREFORE, SUBMITTED THAT THE COMMISSIONER OF INCOME - TAX (APPEALS) AS ALSO THE INCOME - TAX APPELLATE TRIBUNAL COMMITTED GROSS ILLEGALITY IN HOLDING THAT THE NOIDA HAS BEEN ESTABLISHED BY THE STATE ACT AND, ACCORDINGLY, GRANTING EXEMPT ION FROM DEDUCTION OF TAX UNDER SECTION 194A(1) OF THE ACT. 31. SRI BALBIR SINGH, LEARNED SENIOR COUNSEL APPEARING FOR THE BANK, HOWEVER, SUBMITTED THAT THERE CAN BE NO DOUBT THAT THE NOIDA HAS BEEN CONSTITUTED BY THE INDUSTRIAL ACT. HIS CONTENTION IS THAT EXCEPT FOR NAMING NOIDA OR ANY OTHER INDUSTRIAL DEVELOPMENT AUTHORITY ALL MATTERS HAVE BEEN SPECIFIED IN SECTION 3(1) AND THE OTHER PROVISIONS OF THE INDUSTRIAL ACT AND, THEREFORE, IT IS NOT A CASE WHERE NOIDA HAS BEEN CONSTITUTED UNDER THE PROVISIONS OF THE INDUSTRIAL ACT. HIS SUBMISSION IS THAT EVEN OTHERWISE IT WOULD NOT BE APPROPRIATE TO EXAMINE AS TO WHETHER NOIDA HAS BEEN CONSTITUTED BY THE STATE ACT OR UNDER THE STATE ACT HAVING REGARD TO THE PROVISIONS OF SECTION 194A(3)(III)(C) OF THE ACT FOR THE REASON THAT EVEN LIFE INSURANCE CORPORATION OF INDIA IS REFERRED TO IN THAT SECTION. ACCORDING TO HIM, THERE IS NO NEED TO METICULOUSLY EXAMINE THE DIFFERENCE IN USING 'BY' OR 'UNDER' WHEN THE LEGISLATURE ITSELF HAS NOT CONSIDERED IT NECESSARY TO PLACE SUC H A FINE DISTINCTION AS IS SOUGHT TO BE RAISED BY LEARNED COUNSEL FOR THE APPELLANTS. HIS CONTENTION IS THAT IN VIEW OF THE EXEMPTIONS GRANTED UNDER SECTION 194A(3)(III)(F) OF THE ACT AS ALSO THE NOTIFICATION DATED OCTOBER 22, 1970, NOIDA IS EXEMPTED FROM DEDUCTION OF TAX AT SOURCE UNDER SECTION 194A(1) OF THE ACT. 32. WITH REGARD TO THE DECISION OF THE SUPREME COURT IN DALCO ENGINEERING PVT. LTD. (SUPRA), WHICH DEALS WITH THE STATE FINANCIAL CORPORATION ACT, 1951, LEARNED SENIOR COUNSEL SUBMITTED THAT THE CENTRAL ACT IN SECTION 3 PROVIDES THAT THE STATE GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, ESTABLISH A FINANCIAL CORPORATION FOR THE STATE UNDER SUCH NAME AS MAY BE SPECIFIED IN THE NOTIFICATION, WHILE IN THE CASE OF NOIDA, THE STATE ACT ITS ELF PROVIDES FOR CONSTITUTION OF AN AUTHORITY BY ISSUANCE OF A NOTIFICATION. HIS SUBMISSION IS THAT IT IS FOR THIS REASON THAT THE SUPREME COURT IN PARAGRAPH 23 OF THE JUDGMENT RENDERED IN DALCO ENGINEERING PVT. LTD. (SUPRA) OBSERVED THAT THE STATE FINANCI AL CORPORATION HAD BEEN ESTABLISHED UNDER A STATE ACT. 33. WHAT IS IMPORTANT TO NOTICE IS THAT IN DALCO ENGINEERING PVT. LTD. (SUPRA), THE SUPREME COURT WHILE DEALING WITH THE STATE FINANCIAL CORPORATION, PAGE 16 OF 19 SPECIFICALLY OBSERVED THAT WHEN THE WORDS 'BY OR UN DER AN ACT' ARE PRECEDED BY THE WORDS 'ESTABLISHED', IT IS CLEAR THAT THE REFERENCE IS TO A CORPORATION THAT IT IS BROUGHT INTO EXISTENCE BY AN ACT OR UNDER AN ACT. 34. IT ALSO NEEDS TO BE NOTED, AS IS ALSO CLEAR FROM THE PREAMBLE TO THE INDUSTRIAL ACT, THAT THE ACT PROVIDES FOR THE CONSTITUTION OF AN AUTHORITY FOR THE DEVELOPMENT OF CERTAIN AREAS IN THE STATE. THUS, THE ACT ITSELF CONSTITUTES THE AUTHORITY. SECTION 3(1) OF THE ACT PROVIDES THAT THE NAME OF THE AREA SHALL BE ADDED BEFORE THE INDUSTRIAL DE VELOPMENT AUTHORITY. IN OTHER WORDS, WHETHER IT BE NOIDA OR ANY OTHER AUTHORITY THAT IS TO BE CONSTITUTED UNDER SECTION 3(1) OF THE ACT, THE NAME OF THE AUTHORITY HAS BEEN INDICATED. SO FAR AS THE NOIDA IS CONCERNED, THE NAME OF THE AUTHORITY IS THE NEW OK HLA INDUSTRIAL DEVELOPMENT AUTHORITY. THUS, EXCEPT FOR NAMING A PARTICULAR INDUSTRIAL AREA DEVELOPMENT AUTHORITY, SINCE MORE THAN ONE AUTHORITY COULD BE CONSTITUTED, THE AUTHORITY HAS BEEN CONSTITUTED BY THE ACT AND MERELY BECAUSE THE AREA OF THE AUTHORITY HAS NOT BEEN DEFINED UNDER THE ACT AND HAS BEEN LEFT TO THE DISCRETION OF THE STATE GOVERNMENT, CANNOT, IN OUR OPINION, MAKE ANY DIFFERENCE FOR THE PURPOSES OF DETERMINING WHETHER IT HAS BEEN ESTABLISHED BY AN ACT. 35. THE AUTHORITY IS A BODY CORPORATE AN D CONSISTS OF OFFICERS OF THE STATE GOVERNMENT. THE OBJECTS AND FUNCTIONS OF THE AUTHORITY HAVE BEEN CLEARLY DEFINED UNDER SECTION 6 OF THE INDUSTRIAL ACT. THE MAIN FUNCTIONS ARE TO ACQUIRE LAND IN THE INDUSTRIAL DEVELOPMENT AREA BY AGREEMENT OR BY ACQUISI TION UNDER THE LAND ACQUISITION ACT ; TO PREPARE A PLAN FOR THE DEVELOPMENT OF THE INDUSTRIAL AREA AND TO PROVIDE AMENITIES. THE AUTHORITY HAS ALSO BEEN EMPOWERED TO LEVY TAX AS IS CLEAR FROM THE PROVISIONS OF SECTION 11. IT EMPOWERS THE AUTHORITY WITH THE PREVIOUS APPROVAL OF THE STATE GOVERNMENT TO LEVY SUCH TAXES, AS IT MAY CONSIDER NECESSARY, FOR MAINTAINING OR CONTINUING ANY AMENITIES IN THE INDUSTRIAL DEVELOPMENT AREA. THE AUTHORITY HAS TO MAINTAIN ITS OWN FUND. THE OBJECT OF THE AUTHORITY IS TO PREPA RE IN SUCH FORM AND AT SUCH TIME EVERY YEAR AS THE STATE GOVERNMENT MAY SPECIFY, A BUDGET. SECTION 41 DEALS WITH THE CONTROL OF THE STATE GOVERNMENT OVER THE AUTHORITY. THE DISSOLUTION OF THE AUTHORITY IS ALSO PROVIDED FOR IN SECTION 58. IT CAN APPROPRIATE LY BE GATHERED FROM THE AFORESAID PROVISIONS THAT NOIDA HAS BEEN ESTABLISHED BY THE INDUSTRIAL ACT AND OTHERWISE ALSO EVEN BY NECESSARY IMPLICATIONS IT IS MORE THAN APPARENT THAT NOIDA HAS BEEN ESTABLISHED BY THE STATE INDUSTRIAL ACT. THERE IS, THEREFORE, NO DOUBT THAT NOIDA OWES ITS EXISTENCE TO A STATUTE WHICH IS THE FOUNTAINHEAD OF ITS POWERS. 36. EVEN OTHERWISE, THE FINE DISTINCTION SOUGHT TO BE MADE BY LEARNED COUNSEL FOR THE APPELLANTS LOSES SIGNIFICANCE WHEN THE PROVISIONS OF SECTION 194A(3)(III)(C) AND (D) ARE EXAMINED. THEY PROVIDE THAT THE INCOME CREDITED OR PAID TO THE LIFE INSURANCE CORPORATION OF INDIA ESTABLISHED UNDER THE LIFE INSURANCE CORPORATION ACT, 1952 OR THE UNIT TRUST OF INDIA ESTABLISHED UNDER THE UNIT TRUST OF INDIA ACT, 1963 ARE EXE MPTED FROM PAYMENT OF TAX AT SOURCE. THERE IS NO DOUBT THAT THE LIFE INSURANCE CORPORATION OF INDIA AND THE UNIT TRUST OF INDIA ARE ESTABLISHED BY THE ACTS. THE ACT, THEREFORE, DOES NOT PLACE ANY EMPHASIS ON 'BY' OR 'UNDER' THE ACT. 37. IN THIS VIEW OF THE MATTER, REFERENCE TO THE FINANCIAL CORPORATION ACT BY LEARNED COUNSEL FOR THE APPELLANTS TO SUBSTANTIATE THAT NOIDA HAS BEEN ESTABLISHED UNDER A STATE ACT IS NOT OF SIGNIFICANCE. THIS APART, AS HAS BEEN POINTED OUT BY LEARNED SENIOR COUNSEL FOR THE RESPON DENT - BANK, THE SAID PAGE 17 OF 19 CENTRAL ACT AUTHORISED THE STATE GOVERNMENT TO ISSUE THE NOTIFICATION WHEREAS THE INDUSTRIAL ACT AUTHORISES THE STATE GOVERNMENT TO ISSUE THE NOTIFICATION. 38. IN THIS CONNECTION, WE NEED TO REMIND OURSELVES BY OBSERVATIONS MADE IN PARA GRAPH 9 IN THE JUDGMENT OF S. S. DHANOA (SUPRA). THE SUPREME COURT POINTED OUT THAT A CORPORATION ESTABLISHED 'BY' OR 'UNDER' AN ACT OF LEGISLATURE CAN ONLY MEAN A BODY CORPORATE WHICH OWES ITS EXISTENCE AND NOT MERELY ITS CORPORATE STATUS TO THE ACT AND I N THIS CONNECTION THE SUPREME COURT REFERRED TO : A MUNICIPALITY ; A ZILA PARISHAD ; OR A GRAM PANCHAYAT WHICH OWE THEIR EXISTENCE AND STATUS TO AN ACT OF LEGISLATURE. 39. NOIDA HAS BEEN GRANTED A STATUS OF A MUNICIPALITY UNDER ARTICLE 243Q OF THE CONSTITU TION OF INDIA WHICH DEALS WITH THE CONSTITUTION OF A MUNICIPALITY. THE SAID ARTICLE PROVIDES THAT THERE SHALL BE CONSTITUTED IN EVERY STATE, (A) A NAGAR PANCHAYAT FOR A TRANSITIONAL AREA, THAT IS TO SAY, AN AREA IN TRANSITION FROM A RURAL AREA TO AN URBAN AREA ; (B) A MUNICIPAL COUNCIL FOR A SMALLER URBAN AREA ; AND (C) A MUNICIPAL CORPORATION FOR A LARGER URBAN AREA. THE PROVISO TO ARTICLE 243Q, HOWEVER, STIPULATES THAT A MUNICIPALITY UNDER THIS CLAUSE MAY NOT BE CONSTITUTED IN SUCH URBAN AREA OR PART THER EOF AS THE GOVERNOR MAY, HAVING REGARD TO THE SIZE OF THE AREA AND THE MUNICIPAL SERVICES BEING PROVIDED OR PROPOSED TO BE PROVIDED BY AN INDUSTRIAL ESTABLISHMENT IN THAT AREA AND SUCH OTHER FACTORS AS HE MAY DEEM FIT, SPECIFY TO BE AN INDUSTRIAL TOWNSHIP. 40. THE STATE GOVERNMENT HAS ISSUED A NOTIFICATION DATED DECEMBER 24, 2001, IN EXERCISE OF THE POWERS CONFERRED UNDER THE PROVISO TO CLAUSE (1) OF ARTICLE 243Q OF THE CONSTITUTION. THE SAID NOTIFICATION PROVIDES THAT HAVING REGARD TO THE SIZE OF NOIDA WHI CH HAS BEEN DECLARED TO BE AN INDUSTRIAL DEVELOPMENT AREA BY A NOTIFICATION DATED APRIL 17, 1976, AND THE MUNICIPAL SERVICES BEING PROVIDED BY NOIDA, THE GOVERNOR IS PLEASED TO SPECIFY THAT NOIDA WOULD BE AN 'INDUSTRIAL TOWNSHIP' WITH EFFECT FROM THE DATE OF PUBLICATION OF THE NOTIFICATION. THIS CLEARLY MEANS THAT INSTEAD OF MUNICIPAL CORPORATION PROVIDING SERVICES, NOIDA WOULD PROVIDE THE SAID SERVICES AND IF THAT BE SO, THEN AS OBSERVED BY THE SUPREME COURT IN S. S. DHANOA (SUPRA), NOIDA WILL OWE ITS EXIS TENCE TO AN ACT OF THE STATE. 41. WE HAVE, THEREFORE, NO MANNER OF DOUBT FROM A READING OF THE PROVISIONS OF THE INDUSTRIAL AREA DEVELOPMENT ACT THAT THE NOIDA HAS BEEN CONSTITUTED BY THE STATE ACT AND, THEREFORE, ENTITLED TO EXEMPTION OF PAYMENT OF TAX AT SOURCE UNDER SECTION 194A(1) OF THE ACT. 42. THE DECISION OF THE DIVISION BENCH OF THIS COURT IN NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY (SUPRA), ON WHICH RELIANCE HAS BEEN PLACED BY LEARNED COUNSEL FOR THE APPELLANTS, WOULD, THEREFORE, NOT COME TO THE AID OF THE APPELLANTS AS IT WAS RESTRICTED TO THE ISSUE AS TO WHETHER NOIDA WOULD BE A LOCAL AUTHORITY OR NOT AND DID NOT DEAL WITH THE ISSUE INVOLVED IN THIS APPEAL AS TO WHETHER THE NOIDA IS A CORPORATION ESTABLISHED BY A STATE ACT. 43. WE, THEREFORE, A NSWER THE QUESTION OF LAW FRAMED BY US IN NEGATIVE AND HOLD THAT NOIDA IS A CORPORATION ESTABLISHED BY THE UTTAR PRADESH INDUSTRIAL AREA DEVELOPMENT ACT, 1976. 19. THE LD DR COULD NOT SHOW US ANY OTHER CONTRARY DECISION. IN THE ABOVE DECISION THE HON'BLE ALLAHABAD HIGH COURT WHILE DECIDING THE ISSUE ON PAYMENT OF INTEREST TO PAGE 18 OF 19 NOIDA HAS HELD THAT AUTHORITIES CONSTITUTED BY THE STATE ACT ARE ENTITLED TO EXEMPTION OF PAYMENT O F TAX AT SOURCE U/S 194A OF THE ACT. SIMILARLY, IN THE CASE OF THE ASSESSEE A STATE ACT ALSO CONSTITUTED THE RECIPIENT . IN THE RESULT GROUND NO. 2 OF THE APPEAL OF THE REVENUE IS DISMISSED. 20. GROUND NO. 3 OF THE APPEAL OF THE ASSESSEE IS WITH RESPECT TO DEDU CTION OF TAX AT SOURCE ON BANK GUARANTEE COMMISSION U/S 194H OF THE ACT. IN THE CASE BEFORE US THE LD CIT(A) HAS HELD THAT ON BANK GUARANTEE COMMISSION NO TAX IS REQUIRED TO BE DEDUCTED FOLLOWING THE DECISION OF HON'BLE DELHI HIGH COURT IN CASE OF CIT VS. LIVING MEDIA INDIA LTD DATED 06.05.2008. FURTHERMORE, THE ASSESSEE IS ACTING NOT AS AN AGENT BUT ON PRINCIPLE - TO - PRINCIPLE BASIS. 21. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND WE ARE OF THE OPINION THAT THE BANK GUARANTEE COMMISSION IS NOT SUBJECT TO WITHHOLDING TAX U/S 194H OF THE ACT AS IT DOES NOT FALL INTO CLAUSE (I) OF THE EXPLANATION OF SECTION 194H. IN VIEW OF THIS GR OUND NO. 3 OF THE APPEAL OF THE REVENUE IS DISMISSED. 22. IN THE RESULT ALL THE THREE APPEALS OF THE REVENUE ARE PARTLY ALLOWED. 23. NOW COMING TO THE APPEAL OF JA YPEE INFRATECH LTD FOR ASSESSMENT YEAR 2011 - 12 TO 2013 - 14 . 24. THE FACTS OF THE CASE IS THAT ASSESSE E HAS PAID THE RENT WHERE TAX IS REQUIRED TO BE DEDUCTED U/S 194I AND ALSO INTEREST THEIR TAX WAS REQUIRED TO BE DEDUCTED U/S 194A OF THE ACT AND PAYMENT OF INTEREST FOR NON CONVERTIBLE DEBENTURES WHICH ARE SUBJECT TO TDS U/S 194A OF THE ACT. FOR ASSESSMEN T YEAR 2011 - 12 TO 2012 - 13 THE REVENUE IS IN APPEAL ON ALL THESE THREE ISSUES. 25. GROUND NO. 1 OF THE APPEAL OF THE REVENUE IS COVERED BY GROUND NO. 1 OF THE APPEAL OF THE REVENUE IN CASE OF JAYPEE SPORTS INTERNATIONAL LTD WHEREIN RELYING UPON THE DECISION OF THE HON'BLE DELHI HIGH COURT WE HAVE HELD THAT TDS U/S 194I IS REQUIRED TO BE DEDUCTED ON RENT PAYMENT, O N LEASE TO YAMUNA DEVELOPMENT AUTHORITY. THEREFORE, GROUND NO. 1 OF THE APPEAL OF REVENUE IS ALLOWED. 26. GROUND NO. 2 OF THE APPEAL OF THE REVENUE IS AGAINST TDS ON INTEREST PAID. WHILE GROUND NO. 2 OF THE APPEAL OF THE REVENUE IS COVERED BY GROUND NO. 2 OF THE APPEAL OF THE REVENUE IN CASE OF JAYPEE SPORTS INTERNATIONAL LTD WHEREIN RELYING UPON THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT WE HAVE HELD THAT TDS U/S 194A IS NOT REQUIRED TO BE DEDUCTED ON INTEREST PAYMENT TO YAMUNA DEVELOPMENT AUTHORITY. TH EREFORE, GROUND NO. 2 OF THE APPEAL OF REVENUE IS DISMISSED. 27. GROUND NO. 3 OF THE APPEAL OF THE REVENUE IS AGAINST TDS ON BANK GUARANTEE CHARGED. WHILE GROUND NO. 3 OF THE APPEAL OF THE REVENUE IS COVERED BY GROUND NO. 3 OF THE APPEAL OF THE REVENUE IN CASE OF JAYPEE SPORTS INTERNATIONAL LTD WHEREIN WE PAGE 19 OF 19 HAVE HELD THAT BANK GUARANTEE CHARGES ARE NOT SUBJECT TO TDS U/S 194H OF THE ACT. IN VIEW OF THIS GROUND, NO. 3 OF THE APPEAL OF THE REVENUE IS DISMISSED. 28. NOW WE COME TO THE APPEAL OF THE ASSESSEE FOR ASSESSM ENT YEAR 2012 - 13 AND 2013 - 14. IN BOTH THESE APPEALS THE ASSESSEE HAS CHALLENGED SHORT DEDUCTION OF TAX ON RENT PAYMENT OF RS. 44067/ - AND RS. 43948/ - RESPECTIVELY U/S 194I OF THE ACT. THESE PAYMENTS ARE PERTAINING TO LEASE RENT PAID TO YAMUNA DEVELOPMENT A UTHORITY. THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF HON'BLE DELHI HIGH COURT AS DISCUSSED IN GROUND NO. 1 OF THE APPEAL OF THE REVENUE IN APPEALS OF THE JAPEE SPORTS INTERNATIONAL LTD. THEREFORE, AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE WE DISMISSED BOTH THESE APPEALS OF THE ASSESSEE. 29. HOWEVER, IT IS MADE AMPLY CLEAR THAT PROVISO TO SECTION 201 OF THE ACT IS BENEFICIAL AND APPLIES RETROSPECTIVELY AS HELD BY THE HON' BLE DELHI HIGH COURT WE DIRECT THE ASSESSING OFFICER TO GRANT THE BENEFIT OF THE SAME IF ASSESSEE PROVIDES REQUISITE DETAILS. 30. IN THE RESULT APPEAL OF THE REVENUE IN CASE OF JAPEE INFRTECH PVT. LTD ARE PARTLY ALLOWED AND APPEAL OF THE ASSESSEE ARE DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 3 1 / 08 / 2017 . - SD / - - S D / - ( H.S.SIDHU ) ( PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 1 / 08 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI