COMMISSIONER OF INCOME TAX TDS vs. M/S KRISHNA CONTINENTAL LTD.

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ITA - 442 / 2006HC Delhi27 March 20061 pages
For Petitioner: P.L.BANSAL,VISHNU SHARMA
AI SummaryPartly Allowed

What did the High Court hold?

The High Court admitted the appeal filed by the Commissioner of Income Tax (TDS) and formulated a substantial question of law. The court did not provide a decision on the merits of the case in this order. The question to be determined is whether the ITAT was legally correct in its finding that the Tourism Finance Corporation of India is exempt from TDS provisions under Section 194A(3)(iii)(b) of the Income Tax Act, 1961, and therefore, the assessee was not obligated to deduct tax at source. The appeal was admitted for further hearing, and the appellant was directed to file paper books. No finding was reached on the substantial question of law in this order.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax (TDS) against an order of the Income Tax Appellate Tribunal (ITAT). The respondent is M/s Krishna Continental Ltd. The assessment year(s) are not explicitly stated. The ITAT had held that the Tourism Finance Corporation of India is covered by Section 194A(3)(iii)(b) of the Income Tax Act, 1961, and consequently, the assessee was not liable to deduct tax at source under Section 194A. The Commissioner of Income Tax (TDS) is challenging this ITAT ruling. The High Court admitted the appeal and formulated a substantial question of law.

What were the issues?

1. Whether the ITAT was correct in law in holding that the Tourism Finance Corporation of India is covered by the provisions of Section 194A(3)(iii)(b) of the Income Tax Act, 1961, and that the assessee was not for that reason liable to deduct tax at source under Section 194A of the Act? Assessee's contention: The assessee argued that the Tourism Finance Corporation of India falls under the exemption provided by Section 194A(3)(iii)(b), thus absolving them of the responsibility to deduct tax at source. Revenue's contention: The revenue (Commissioner of Income Tax TDS) contended that the ITAT's decision was incorrect and that the assessee was indeed liable to deduct tax at source under Section 194A.

Which sections of the Income-tax Act were involved?

Section 194A,Section 194A(3)(iii)(b)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 442/2006 . . COMMISSIONER OF INCOME TAX TDS ..... Appellant Through Ms. P.L. Bansal and Mr. Vishnu Sharma, Advs. . versus . . M/S KRISHNA CONTINENTAL LTD. ..... Respondent Through None. . CORAM: HON'BLE MR. JUSTICE T.S.THAKUR HON'BLE MR. JUSTICE J.M. MALIK . . O R D E R 27.03.2006 . CA No.4001/2006 Heard. Allowed subject to just exceptions. ITA No. 442/2006 Admit. The following substantial question of law is formulated for determination : ?Whether ITAT was correct in law in holding that the Tourism Finance Corp. of India is covered by the provisions of Section 194A(3)(iii)(b) of the Income Tax Act, 1961 and that the assessee was not for that reason liable to deduct tax at source under Section 194A of the Act?? -2- . The appellant shall file the requisite number of paper books in accordance with the High Court Rules. Post for hearing at its turn with ITA No.68/2006. . . T.S.THAKUR, J . . . . J.M. MALIK, J MARCH 27, 2006 sv . .

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