The Branch Manager, Noida V. Addl. CIT (TDS), Ghaziabad

ITA 6675/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5841 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: misc
• Appeal Filed On: 16-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: SUNIL KUMAR TYAGI
• Keywords: Question of law
• Section: 142(1); 201(1)

Judgement Text

1 ITA NOS. 6675 & 6676/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI G. D. AGRAWAL, PRESI DENT AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 6675/DEL/201 5 ( A.Y 2013-14) AND ITA NO. 6676/DEL/201 5 ( A.Y 2014-15) THE BRANCH MANAGER AXIS BANK LTD. NO. B2-B3, SECTOR-16 NOIDA AAACU2414K (APPELLANT) VS ADDL. CIT (TDS) GHAZIABAD (RESPONDENT) APPELLANT BY SH. SUNIL KUMAR TYAGI, CA RESPONDENT BY SH. S. R. SENAPATI, SR. DR ORDER PER BENCH THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDER DATED 27/10/2015 PASSED BY CIT(A)-1, NOIDA FOR A.YS. 2013 -14 AND 2014-15. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- THE APPELLANT, BEING AGGRIEVED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 1, NOIDA [HEREINAFTER THE LEAR NED CIT(A)] UPHOLDING ORDER U/S 201(1) AND 201(1 A) FOR SHORT DEDUCTION OF TDS U/S 194A PLUS INTEREST DEMAND OF RS. 1,78,945/- PRESENTS THIS APPEAL ON FO LLOWING AMONGST OTHER GROUNDS WITHOUT PREJUDICE TO ONE ANOTHER: 1.1 IT IS SUBMITTED THAT THE APPELLANT HAS NOT COMMITTE D DEFAULT WITHIN THE MEANING OF SECTION 201(1) AND SECTION 201(1 A) ON F ACTS AND LAW OF THE CASE DATE OF HEARING 05.06.2018 DATE OF PRONOUNCEMENT 07.06.2018 2 ITA NOS. 6675 & 6676/DEL/2015 AND THE ORDER DESERVES TO BE CANCELLED. 1.2 THE ORDER PASSED U/S 201 (1J/201 (1 A) BY ADDITION AL CIT (TDS), GHAZIABAD IS WITHOUT JURISDICTION, AS THE APPELLANT IS CENTRALLY REGISTERED FOR ALL TDS COMPLIANCES AND HOLDS CENTRALISED TANS (FOR ITS CENTRAL OFFICE, REGISTERED OFFICE, ALL INDIA BRANCHES/OFFICES) WITH MUMBAI TDS RANGE. 2.1 IT IS SUBMITTED THAT THE PAYEES ARE STATUTORY BODY CONSTITUTED UNDER UTTAR PRADESH STATE ACT AND ELIGIBLE FOR TDS EXEMPTION U/ S 194A (3) (III(F) UNDER CBDT NOTIFICATION NO. 3489 DATED 22-10-1970. 2.2 THE LEARNED CIT (A) HAS ERRED IN LAW THAT (A) THE CASE OF APPELLANT IS SQUARELY COVERED BY FA VOURABLE ORDER OF HON'BLE DELHI TRIBUNAL IN THE CASE OF CANARA BANK ( ITA NO. 1359/DEL/2014) DATED 7 TH AUGUST 2015. THE SAID ORDER HAS DULY CONSIDERED THE ALLAHABAD HIGH COURT RULING DATED 28 THFEBRUARY 2011 IN WRIT PETITION FILED BY NOIDA, HOLDING THAT NOIDA IS NOT A 'LOCAL AUTHORITY'. THE TRIBUNAL HELD THAT THERE WAS NO OBLIGATION FOR THE BANK TO DEDUCT TAX ON INTEREST PAID ON FIXED DEPOSITS TO NOIDA SINCE N OIDA WAS NOTIFIED U/S. 194A(3) (III) (F) VIDE CBDT NOTIFICATION NO. 3489 D ATED 22 ND OCTOBER 1970. THIS WAS A GROUND INDEPENDENT OF THE DEFENCE OF THE RE BEING NO TDS OBLIGATION SINCE NOIDA IS A LOCAL AUTHORITY WHOSE INCOME IS FULLY EXEMPT. WHILE THE DEFENCE OF NOIDA BEING AN EXEMPT LOCAL A UTHORITY' IS NOT AVAILABLE IN VIEW OF UNFAVOURABLE ALLAHABAD HIGH CO URT RULING AGAINST NOIDA, THE FACT REMAINS THAT NOIDA IS EXEMPTED FROM TDS U/S. 194A IN TERMS OF ABOVE REFERRED NOTIFICATION WHICH CONTINUE S TO BE IN FORCE. (B) IT WAS INCORRECT OF CIT(A) TO MAKE UNSUBSTANTIA TED ALLEGATIONS AGAINST BANK BEING A PARTY TO PROCEEDINGS BEFORE ALLAHABAD HIGH COURT AND/OR PLAYING A FRAUD UPON THE HON'BLE DELHI TRIBUNAL BY MISREPRESENTING FACTS. WE STRONGLY DENY ANY SUCH ALLEGATIONS SINCE BARE PE RUSAL OF PROCEEDINGS BEFORE ALLAHABAD HIGH COURT AND/OR DELHI TRIBUNAL O RDERS MAKE IT CLEAR THAT AXIS BANK WAS NOT A PARTY TO ANY OF THESE PROC EEDINGS. AS IT APPEARS, REJECTION OF CURRENT YEAR'S APPEAL BY CIT(A) BY DEV IATING FROM EARLIER YEAR'S APPELLATE ORDER IN OUR OWN CASE APPEARS TO BE INFLU ENCED BY THESE 3 ITA NOS. 6675 & 6676/DEL/2015 INCORRECT AND ERRONEOUS ASSUMPTIONS AND INFERENCES BY CIT(A). (C) THE CIT(A) HAS PASSED FAVOURABLE ORDERS AGAINST THE BANK FOR EARLIER PERIODS ON IDENTICAL ISSUE AGAINST WHICH NO FURTHER APPEAL HAS BEEN FILED BY THE TAX DEPARTMENT BEFORE HON'BLE ITAT AS PER OU R RECORDS. (D) SINCE DEPARTMENT HAS ACCEPTED THE ORDER OF CIT( A) IN EARLIER YEAR, IT CANNOT DEVIATE FROM ITS POSITION IN SUBSEQUENT YEAR AND CLAIM TO THE CONTRARY. THE PROPOSITION IS WELL SETTLED BY HON'BL E SUPREME COURT (SC) RULING IN THE CASE OF KAUMUDINI NARAYAN DALAI [2000 (12) TMI 101 (SC)] WHEREIN THE COURT HELD THAT REVENUE HAVING ACCEPTED THE DECISION OF HIGH COURT IN ONE CASE, IT IS NOT OPEN TO REVENUE TO CHA LLENGE THE IDENTICAL MATTER IN DIFFERENT TAXPAYER'S CASE. THE REVENUE MU ST BE CONSISTENT AND IT CANNOT DIFFERENTIATE BETWEEN TAXPAYERS. RECENTLY BO MBAY HIGH COURT IN THE CASE OF CIT V VIJAY G PATIL [2015 (11) TMI 868 (BOM)] APPLIED THE SC RATIO TO A FACT PATTERN WHERE TAX DEPARTMENT HAD AC CEPTED THE DECISION OF THE TRIBUNAL IN ONE CASE WHEREAS IN IDENTICAL MATTE R OF ANOTHER ASSESSEE, TAX DEPARTMENT APPEALED AGAINST ORDER OF TRIBUNAL. BOMBAY HC HELD THAT RATIO OF SC WHICH WAS RENDERED IN THE CONTEXT OF HI GH COURT DECISION WILL APPLY IN THE CONTEXT OF JURISDICTIONAL ITAT ORDER. IN FACT, RATIO OF THESE RULING SHOULD APPLY WITH MORE FORCE IN OUR CASE, AS ORDER OF CIT(A) IN OUR OWN CASE HAS BEEN ACCEPTED BY THE TAX DEPARTMENT . 2 .3. IT IS SUBMITTED THAT (A) (A) TDS PROVISION IS TAX COLLECTION MACHINERY, IS N OT CHARGING SECTION, IS SUBORDINATE TO CHARGE OF TAX U/S 4 R .W.S. 5. THE DEPARTMENT IS NOT JUSTIFIED, IN THE PECULIAR CIRCUMSTANCES, EFFECTIVE LY SHIFTING CHARGE OF TAX ON THE PAYER BANK, WHEN THE PAYEE AUTHORITIES ARE S TATE GOVERNMENT STATUTORY BODIES AND HOLDING PAN. THE PAYEES IN THI S CASE ARE IN EXISTENCE AND IN THE KNOWLEDGE AND RADAR OF THE DEP ARTMENT SINCE MORE THAN 10 YEARS, ARE PRIMARILY RESPONSIBLE TO PA Y CORRECT TAX DUE, IF ANY. (B) THE WRIT PETITION JURISDICTION CHALLENGED BY THE P AYEE AUTHORITY BEFORE HON. ALLAHABAD HC (ORDER DATED 28-2-2011) WAS CONCE RNED PRIMARILY WITH THE ISSUE WHETHER NOIDA IS A LOCAL AUTHORITY W ITHIN THE MEANING OF 4 ITA NOS. 6675 & 6676/DEL/2015 SECTION 10(20) R.W. NOTICE U/S 142(1) REQUIRING IT TO FILE ITS RETURN OF INCOME (ROI). IT IS, THEREFORE, SUBMITTED THAT ORDER PASSED U/S 2 01 (1) AND SECTION 201 (1 A) BE CANCELLED. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER AND/OR TO AMEND ALL OR ANY OF THE GROUNDS OF APPEAL. 3. THE FACTS FOR BOTH THE APPEALS ARE IDENTICAL THE REFORE, WE ARE TAKING UP THE FACTS OF A.Y. 2013-14. DURING THE COURSE OF VER IFICATION, IT WAS NOTICED BY THE ASSESSING OFFICER THE ASSESSEE MADE PAYMENT OF INTEREST ON FDRS TO GR. NOIDA A UTHORITY DURING F.Y 2012-13, RELEVANT TO A.Y 2013-1 4, BUT TDS WAS NOT DEDUCTED ON THE INTEREST PAID TO GR. NOIDA AUTHORIT Y/ NOIDA AUTHORITY ON THE FDRS, AS WAS OBLIGATORY ON THE PART OF THE BANK UND ER THE PROVISIONS OF SECTION 194A OF THE INCOME TAX ACT, 1961. NOTICE DATED 07.1 0.2014 ISSUED TO THE ASSESSEE TO FURNISH DETAILS OF PAYMENT OF INTEREST PAID ON FDRS TO NOIDA AUTHORITY/GR. NOIDA AUTHORITY. THE ASSESSEE BANK FU RNISHED THE DETAILS OF INTEREST PAID, WHICH ARE AS UNDER: SL NO. NAME OF AUTHORITY NAME OF BRANCH F.Y AMT. OF INTEREST PAID/PAYABLE. AMT. OF TAX DEDUCTED AT SOURCE SHORT DEDUCTION/NON DEDUCTION 1. GR. NOIDA AUTHORITY AXIS BANK, B- 2 & B-3, SECTOR- 16, NOIDA A.Y 2012- 13 & 2013- 14 13,76,509/- NIL 1,37,650/- A SHOW CAUSE NOTICE DATED 7/10/2014 WAS ISSUED TO THE ASSESSEE BANK. THE ASSESSEE BANK DURING THE COURSE OF PROCEEDINGS STAT ED THAT GR. NOIDA AUTHORITY HAD GIVEN A DECLARATION TO BANKS THAT IT IS EXEMPTE D FROM TAXATION SINCE IT IS A LOCAL AUTHORITY. HENCE THE ASSESSEE BANK HAS NOT DE DUCTED ANY TAX. THE A.O OBSERVED THAT THE DECLARATION ISSUED BY GR. NOIDA A UTHORITY HAD NO LEGAL SANCTITY AND BANKS WERE NOT REQUIRED TO TAKE COGNIZ ANCE OF SUCH AN ACT. IF THE INCOME OF GR. NOIDA AUTHORITY WAS NOT TAXABLE, THEY SHOULD HAVE APPLIED TO THE 5 ITA NOS. 6675 & 6676/DEL/2015 A.O. FOR A CERTIFICATE UNDER SECTION 197 FOR LOWER DEDUCTION OF TAX AND PROVIDED IT TO THE BANKS. THE ASSESSEE HAS NOT PRODUCED ANY CERTIFICATE UNDER SECTION 197 TO SUPPORT NIL DEDUCTION OF TDS ON INTEREST. TH E ASSESSING OFFICER FURTHER OBSERVED THAT NOIDA AUTHORITY/GREATER NOIDA AUTHORI TY ARE NOT COVERED UNDER THE EXEMPTION U/S 194A(3)(III)(F) OF THE INCO ME TAX ACT, 1961. THUS, THE ASSESSING OFFICER HELD THAT THE EXEMPTION IS AL LOWABLE TO ONLY SUCH CORPORATION ESTABLISHED BY A STATE, CENTRAL OR PROV INCIAL ACT AND NOT UNDER SUCH ACTS. HENCE, CBDT NOTIFICATION NO. S.O. 3489 D ATED 22.10,1970 IS NOT APPLICABLE IN THE PRESENT CASE. THE ASSESSING OFFIC ER FURTHER HELD THAT THE ASSESSEE ITSELF ADMITTED THAT NOIDA AUTHORITY/GREAT ER NOIDA AUTHORITY ARE FORMED UNDER U.P. INDUSTRIAL AREA DEVELOPMENT ACT, 1976 PASSED BY THE STATE GOVT. THUS THE ASSESSING OFFICER HELD THAT N OIDA AUTHORITY DOES NOT FALL UNDER ANY EXEMPTION CLAUSE NOR NOIDA AUTHORITY IS A LOCAL AUTHORITY AS HAS BEEN HELD BY THE ALLAHABAD HIGH COURT DATED 28. 02.2011. HENCE, TDS PROVISIONS ARE APPLICABLE IN THE CASE OF NOIDA AUTH ORITY. UNLESS A CERTIFICATE U/S 197 FROM THE DEPARTMENT IS PRODUCED BY THE AUTH ORITY, BANKS ARE LIABLE TO DEDUCT TAX AT SOURCE ON PAYMENT OF INTEREST TO T HE AUTHORITY. AS PER SECTION 194 A OF THE I.T. ACT, 1961 AND BOARD NOTIF ICATION BANK WAS LIABLE TO DEDUCT THE TAX AT SOURCE ON INTEREST PAYMENT CREDIT ED TO GREATER NOIDA AUTHORITY. HOWEVER, BANK HAS FAILED TO DEDUCT THE S AME AND PAY TO THE CENTRAL GOVT. WITHOUT VERIFYING THE APPLICABILITY O F ABOVE REFERRED NOTIFICATION FROM THE INCOME TAX DEPARTMENT. THE STATUS OF GREAT ER NOIDA AUTHORITY AS LOCAL AUTHORITY HAS ALSO NOT BEEN ACCEPTED BY HONB LE HIGH COURT ALLAHABAD IN WRIT PETITION TAX NO. 1338 OF 2005 VIDE ORDER DA TED 28.02.2011. THEREFORE THE ASSESSEE BANK HAS TO DEDUCT TDS ON PAYMENT OF I NTEREST ON FDRS TO GR. NOIDA AUTHORITY AND PAY TO THE CENTRAL GOVT. ACCOUN T. HOWEVER, THE ASSESSEE HAS NOT FOLLOWED THE PROVISIONS OF INCOME TAX ACT, 1961. THE ASSESSEE DID NOT DEDUCT TDS ON PAYMENT OF INTEREST ON FDRS ON THE BASIS OF THE LETTER PROVIDED BY THE GR. NOIDA AUTHORITY, WHI LE TDS SHOULD BE DEDUCTED ON THIS PAYMENT AND DEPOSITED IN THE GOVER NMENT ACCOUNT WITHOUT ANY DELAY AS PER TIRE PROVISIONS OF INCOME TAX ACT, 1961. THUS THE ASSESSING 6 ITA NOS. 6675 & 6676/DEL/2015 OFFICER HELD THAT TAX IS DEDUCTIBLE @ 10% UNDER SEC TION 194A OF THE INCOME TAX ACT, 1961 WHICH ASSESSEE FAILED TO DO SO AND TH E ASSESSEE IS IN DEFAULT. TOTAL SHORT CHARGE U/S 201(1) IS COMPUTED AT RS.1, 37,650/- NOIDA AUTHORITY AND INTEREST THEREON U/S 201(1A) IS RS. 41,295/-. THUS THE TOTAL DEMAND ON ACCOUNT OF SHORT CHARGE AND INTEREST WORKED OUT AT RS.1,78,945/- BY THE ASSESSING OFFICER. 4. BEING AGGRIEVED BY THE ORDER U/S 201(1)/201(A) T HE ASSESSEE FILED APPEAL BEFORE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THE ASSESSEE IS A PUBL IC SECTOR BANK. THE CIT(A) GROSSLY IGNORED ALL BINDING PRECEDENTS SPECI FICALLY RAISED BEFORE HIM AND HELD THAT THE ASSESSEE WAS ALLEGEDLY LIABLE TO DEDU CT TAX AT SOURCE (TDS) U/S 194A FROM THE INTEREST PAYMENTS PAID/CREDITED TO NO IDA AUTHORITY AND GREATER NOIDA AUTHORITY AND THEREBY CIT(A) TREATED THE ASSESSEE BANK AS ASSESSEE IN DEFAULT BY CONFIRMING ORDER PASSED BY T HE ADDL. CIT(TDS) UNDER SECTION 201(1)/201(1A), RAISING A DEMAND OF RS. 235 ,63,873/- FOR AY 2014-15 AND RS. 1,78,945/- FOR AY 2013-14. THE LD. AR FURTH ER SUBMITTED THAT THE ASSESSEE WAS NOT REQUIRED TO DEDUCT ANY TDS U/S 19 4A BECAUSE THE NOIDA AUTHORITY AND GREATER NOIDA AUTHORITY FALL IN EXEMP TED CATEGORY PROVIDED IN SECTION 194A(3)(III)(F) OF THE ACT COVERED VIDE NOT IFICATION NO. CBDT SO NO. 3489 DATED 22/10/1970; AS BOTH THE ABOVE AUTHORITIES ARE CORPORATION ESTABLISHED BY STATE ACT NAMELY U.P. INDUSTRIAL AREA DEVELOPMEN T ACT, 1976. THE LD. AR SUBMITTED THAT THE SAID MATTER IS ALREADY EXAMINED IN MUCH DETAILS BY THE TRIBUNAL, DELHI IN NUMEROUS APPEALS AS CITED HEREUN DER, WHEREIN IT IS CATEGORICALLY HELD THAT ABOVE AUTHORITIES FALL IN E XEMPTED CATEGORY PROVIDED IN SECTION 194A(3)(III)(F), COVERED VIDE NOTIFICATION NO. CBDT SO NO. 3489 DATED 22/10/1970:- S. NO. ITA NO. ORDER DATED APPELLANT/RESPONDENT 1 1359/DEL/2014 07/08/2015 ADD. CIT(TDS) VS. CANARA BANK 2 1360 & 1362/DEL/2014 07/08/2015 ADD. CIT(TDS) VS. 7 ITA NOS. 6675 & 6676/DEL/2015 CANARA BANK 3 1361/DEL/2014 07/08/2015 ADD. CIT(TDS) VS. CANARA BANK 4 1351 TO 1353/DEL/2014 07/08/2015 ADD. CIT(TDS) VS. UCO BANK 5 1354/DEL/2014 07/08/2015 ADD. CIT(TDS) VS. PUNJAB & SINDH BANK 6 1355/DEL/2014 07/08/2015 ADD. CIT(TDS) VS. STATE BANK OF PATIALA 7 1357 & 1358/DEL/2014 07/08/2015 ADD. CIT(TDS) VS. THE CORPORATION BANK 8 1363 & 1374/DEL/2014 07/08/2015 ADD. CIT(TDS) VS. VIJAYA BANK THE FACTS OF THIS CASE ARE EXACTLY THE SAME AS WERE IN ABOVE CITED APPEALS AND THEREFORE THIS CASE IS FULLY COVERED IN FAVOUR OF T HE ASSESSEE BANK BY THE AFORESAID JUDGMENTS OF THIS TRIBUNAL WHICH ARE FULL Y RELIED UPON BY THE ASSESSEE BANK. THE LD AR SUBMITTED THAT T HE CIT-A BRUSHED-ASIDE THE BINDING PRECEDENT OF JURISDICTIONAL TRIBUNAL CONFIR MED THE ORDER OF THE ADDL. CIT (TDS). THE ANSWER TO THE OBSERVATION OF THE C IT-A HAS ALREADY BEEN ADDRESSED BY THE TRIBUNAL IN ITA 5968 TO 5974/DEL/2 015 IN CASE OF CENTRAL BANK OF INDIA VS ADDL. CIT(TDS). THE LD. AR POINTED OUT THAT THE ORDER OF THE TRIBUNAL IN ITA NO. 1359/DEL/2014 DATED 07-08-2015 IN ADDL. CIT (TDS) VS. CANARA BANK, STOOD CONFIRMED, APPROVED AND UPHELD BY THE HONBLE ALLAHABAD HIGH COURT. IN THE CASE OF COMMISSIONER OF INCOME TAX (TDS) AND ANOTHER VS CANARA BANK [2016] 386 ITR 504 (ALL) AND THEREFORE ALL THE PREMISE, OBSERVATIONS AND COMMENTS OF THE ID. CIT-A IN HIS IMPUGNED ORDER, UNDER APPEAL, STOOD QUASHED BY THE HONBLE ALLAHABA D HIGH COURT, WHICH IS A JURISDICTIONAL HIGH COURT IN RELATION TO THE PRESEN T APPEALS AND THUS HAVING BINDING PRECEDENT. IN VIEW OF ALL THE ABOVE FACTS, CIRCUMSTANCES AND THE SETTLED LEGAL POSITION, IT BECOMES APTLY AND ABUNDA NTLY CLEAR THAT THE ASSESSEE BANK WAS NOT OBLIGED TO DEDUCT ANY TDS FROM THE INT EREST PAID/CREDITED TO NOIDA AUTHORITY/GREATER NOIDA AUTHORITY BY VIRTUE O F THE SPECIFIC PROVISIONS OF 8 ITA NOS. 6675 & 6676/DEL/2015 SECTION 194A(3)(III)(F) AS HELD IN ALL ABOVE CASES AND UPHELD BY THE JURISDICTIONAL HIGH COURT AS CITED ABOVE AND THEREFORE THE APPELLANT BANK CANNOT BE TREATED AS ASSESSEE IN DEFAULT U/S 201(1) /201(1 A) AND THEREFORE THE ORDER PASSED BY THE. CIT-A IS LIABLE TO BE QUASHED AND THE ASSESSEE DESERVES TO SUCCEED IN APPEALS. THE LD. AR FURTHER SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE JURISDICTIO NAL HIGH COURT I.E. ALLAHABAD HIGH COURT IN CASE OF CANARA BANK. THERE FORE, THE APPEAL OF THE ASSESSEE BE ALLOWED. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THIS ISSUE IS SQUARELY COVERED BY THE DECIS ION OF THE HONBLE ALLAHABAD HIGH COURT IN CASE OF CIT VS. CANARA BANK 2016 386 ITR 504 (ALL) WHEREIN THE HONBLE HIGH COURT IS HELD AS UNDER:- 41. WE HAVE, THEREFORE, NO MANNER OF DOUBT FROM A READING OF THE PROVISIONS OF THE INDUSTRIAL AREA DEVELOPMENT ACT T HAT THE NOIDA HAS BEEN CONSTITUTED BY THE STATE ACT AND, THEREFORE, ENTITL ED TO EXEMPTION OF PAYMENT OF TAX AT SOURCE UNDER SECTION 194A(1) OF THE ACT. 42. THE DECISION OF THE DIVISION BENCH OF THIS COU RT IN NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY (SUPRA), ON WHICH RELIANCE HAS BEEN PLACED BY LEARNED COUNSEL FOR THE APPELLANTS, WOULD, THERE FORE, 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 ESTABLISHE D BY A STATE ACT. 43. WE, THEREFORE, ANSWER THE QUESTION OF LAW FRAM ED BY US IN NEGATIVE AND HOLD THAT NOIDA IS A CORPORATION ESTABLISHED BY THE UTTAR PRADESH INDUSTRIAL AREA DEVELOPMENT ACT, 1976. 44. THE APPEAL IS ACCORDINGLY, DISMISSED. THE HONBLE HIGH COURT HELD THAT NOIDA HAS BEEN CON STITUTED BY THE STATE ACT AND, THEREFORE, ENTITLED TO EXEMPTION OF PAYMENT OF TAX AT SOURCE UNDER SECTION 9 ITA NOS. 6675 & 6676/DEL/2015 194A(1) OF THE ACT. FROM THE PERUSAL OF THE ORDER U /S 201(1)/201(1A), IT CAN BE SEEN THAT THE ASSESSING OFFICER HAS OVER LOOKED THE VERY FACT THAT THE GREATER NOIDA AUTHORITY, THE PAYEE, IS A STATUTORY AUTHORITY CONSTITUTED U/S 3 OF THE UTTAR PRADESH (UP) INDUSTRIAL AREA DEVELOP MENT ACT, 1976 AND 100% OWNED BY UP STATE GOVERNMENT. THE CBDT NOTIFIC ATION NO. 3489 (ENTRY NO. 39) DATED 22/10/1970 ISSUED IN PURSUANCE TO SEC TION 194A (3) (III) (F) DIRECTS THAT NO TAX IS REQUIRED TO BE DEDUCTED FROM INTEREST PAYMENT TO ANY CORPORATION ESTABLISHED BY A CENTRAL STATE OR PROVI NCIAL ACT. THUS, IT IS NOT COMING UNDER THE PURVIEW OF TDS PROVISION. THIS AS PECT WAS TOTALLY OVER LOOKED BY THE ASSESSING OFFICER AS WELL AS THE CIT( A). THE ORDER OF THE CIT(A) IS SET ASIDE. FOR ASSESSMENT YEAR 2014-15, THE ISSU ES ARE IDENTICAL. THEREFORE, BOTH THE APPEALS OF THE ASSESSEE ARE ALL OWED. 7. IN RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH JUNE, 2018 . SD/- SD/- (G. D. AGRAWAL) (SUCHITRA KAMBLE) PRESIDENT JUDICIAL MEMBER DATED: 07/06/2018 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 10 ITA NOS. 6675 & 6676/DEL/2015 DATE 1. DRAFT DICTATED ON 05/06/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 05/06/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 07.06.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 07.06.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.