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Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI
Before: SHRI SUDHANSHU SRIVASTAVA & SHRI O.P. KANT
This appeal is preferred by the assessee against order dated
Yamuna Expressway Industrial Development Authority vs ACIT 29.2.2016 passed by the Ld. CIT (Appeals) – I, Noida {CIT (A) and pertains to assessment year 2010-11.
2.0 Brief facts of the case are that the Assessing Officer (TDS) {AO} while examining the accounts of the assessee for the year ending on 31.3.2010 noted that the assessee had made payment of Rs. 495,919,544/- to M/s. New Okhla Industrial Development Authority (NOIDA) as interest on loan taken by it from NOIDA. It was further noted by the AO that no tax has been deducted at source on the said payment of interest. The assessee was issued a notice to show cause as to why the assessee should not be treated as ‘assessee in default’. It was the assessee’s contention before the AO that NOIDA authority was a Corporation established by the Uttar Pradesh Industrial Development Act, 1976 and hence it was covered by the CBDT notification No. 3489 dated 22.10.1970 and, therefore, the provisions of section 194 A (3)(iii) (f) of the Income tax Act, 1961 (hereinafter called ‘the Act’) were applicable. However, the AO (TDS) did not accept the contention of the assessee and proceeded to treat the assessee as an ‘assessee in default’ in terms of section 201(1)/201(1A) of the Act for non deduction of tax at source u/s 194A on payment of interest of the NOIDA
Yamuna Expressway Industrial Development Authority vs ACIT authority. A total tax liability, including interest, to the amount of Rs. 82,818,563/- was determined as being payable by the assessee.
2.1 The assessee’s appeal before the Ld. First Appellate Authority was also dismissed. However, the ITAT Delhi bench on second appeal by the assessee held in favour of the assessee vide order dated 19th January, 2017.
2.2 Aggrieved, the Revenue approached the Hon’ble Allahabad High Court and the Hon’ble Allahabad High Court, vide order dated 25.1.2009 in of 2017, remanded the issue to the Tribunal for fresh adjudication.
2.3 Therefore, in pursuance of the directions of the Hon’ble Allahabad High Court, this appeal is now being taken up again for hearing.
3.0 The Ld. Authorised Representative (AR) submitted that the Hon’ble Apex court in the case of CIT (TDS) vs. Canara Bank in appeal No. 6020 of 2018 reported in (2018) 406 ITR 161 (SC) vide its judgment dated 2.7.2018 had held that NOIDA Authority is covered under the notification dated 22.10.1970 and is not liable for TDS u/s 194 A(3)(iii)(f) of the Act on interest payment. It
Yamuna Expressway Industrial Development Authority vs ACIT was further submitted that in this judgment the Hon’ble Apex Court has upheld the judgment of Hon’ble Allahabad High Court dated 4.4.2016 in appeal No. 64 of 2016 wherein the Hon’ble Allahabad High Court had held that NOIDA is a corporation established by the Uttar Pradesh Industrial Development Act, 1976. Our attention was also drawn to the judgment of Hon’ble Apex Court in the case of New Okhla Industrial Development Authority vs. CCIT reported 406 ITR 178 (SC) wherein, vide order dated 2.7.2018, it was held that NOIDA was not a local authority. The Ld. AR submitted that the crux of the judgment was that NOIDA corporation was established under the 1976 Act and was, therefore, eligible for exemption from deduction of tax as per notification dated 22.10.1970 and further that the NOIDA Authority was not a local authority and its income was not exempt u/s 10(20) of the Act. It was also submitted that the ITAT, while deciding the appeal of the assessee on the earlier occasion, had placed reliance of the judgment of the Hon’ble Allahabad High Court in the case of CIT (TDS) vs. Canara Bank in ITAT 64 of 2016 which was upheld by the Hon’ble Apex Court vide order dated 2nd January, 2018 and is reported in (2018) 406 ITR 161. It was prayed that the assesee’s appeal be allowed.
Yamuna Expressway Industrial Development Authority vs ACIT 4.0 In response the Ld. CIT (DR) placed reliance on the order of the lower authorities. She, however, fairly accepted that the issue is covered in favour of the assessee by the judgment of the Hon’ble Apex Court in the bunch of civil appeals bearing appeal Nos. 15613 of 2017, 9365 of 2017, 12750 of 2017, 9199 of 2017, 15615 of 2017, 15614 of 2017, 15130 of 2017, 51 of 2018, 6115 of 2018 and 6113 of 2018 vide common order dated 02/07/2018.
5.0 We have heard the rival submissions and have perused the material on record. We have also carefully perused the order of the Hon’ble Apex Court dated 02.07.2018 in the case of M/s. New Okhla Industrial Development Authority vs. CIT and others in the bunch of civil appeals bearing appeal Nos. 15613 of 2017, 9365 of 2017, 12750 of 2017, 9199 of 2017, 15615 of 2017, 15614 of 2017, 15130 of 2017, 51 of 2018, 6115 of 2018 and 6113 of 2018. We note on that in Para 12 of the said order the Hon’ble Apex Court has held as under:-
“12. Now coming to the appeals filed by the revenue, in so far as the question relating to exemption under section 194A(3) (iii)(f) by virtue of notification dated 24.10.1970, i.e. the exemption of interest income of the Noida, we have 5
Yamuna Expressway Industrial Development Authority vs ACIT already decided the said controversy in CIVIL APPEAL NO. ______________ OF 2018 (arising out of SLP(C) No. 3168 of 2017)- Commissioner of Income Tax (TDS) Kanpur and Anr. Vs. Canara Bank. Having held that Noida is covered by the notification dated 22.10.1970, the judgment of the Delhi High Court holding that Noida / Greater Noida is entitled for the benefit of Section 194A(3)(iii) (f) has to be approved.”
5.1 Therefore, in view of the judgment of the Hon’ble Apex Court, it is now settled that NOIDA Authority is entitled to benefit of section 194A (3)(iii)(f). Thus, it follows that in view of the said benefit being extended to the NOIDA authority, the assessee cannot be held to be an assessee in default for failure to deduct tax at source under the provisions of 194A of the Act. Therefore, we set aside the order of the Ld. CIT (A) and direct the AO (TDS) to delete the demand.
6.0 In the final result appeal of the assessee stands allowed.
Yamuna Expressway Industrial Development Authority vs ACIT