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Income Tax Appellate Tribunal, DELHI BENCH “G” NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI B.R.R. KUMAR
O R D E R PER AMIT SHUKLA, JM:
The aforesaid appeals have been filed by the assessee against separate impugned order of even date 27.04.2017, passed by Ld. CIT(Appeals)-XLI, New Delhi in relation to order passed u/s.201(1)/201(1A) for the Assessment Year 2012-13 and 2013-14. The issues involved in both the appeals are common arising out of identical set of facts, therefore, same were heard together and are being disposed of by way of this consolidated order. Grounds in both the appeals are common, therefore, for the sake of brevity grounds raised by the Revenue in are reproduced herein below.
2 I.T.As. No.4559 & 4560/DEL/2017
“1. Whether on the facts and in the circumstances of the case and in law, the CIT(A) was justified in holding that the NOIDA is covered under the exemption from TDS in view of provisions of section 194A(3)(iii)(f) read with Notification No. 3489 dated 20.10.1970, and ignoring the Hon'ble Allahabad High Court's decision dated 28/02/2011 in Writ Petition No 1338/2005 in the case of NOIDA wherein it has been held that NOIDA is not a local authority within the meaning of section 10(20 of the Income Tax Act, 1961 hence, not eligible for exemption from TDS u/s 194A(3)(iii)(f) of the Income Tax Act, 1961 ? 2. Whether on the facts and in the circumstances of the case and in law, the CIT (A) was justified in placing reliance on the Jurisdictional High Court’s decision dated 16.02.2017 in the case of M/s Rajesh Projects India Pvt. Ltd., which is apparently not only in contradiction of the judgement of the Hon'ble Allahabad High Court in Writ Petition No 1338/2005 dated 28.02.2011 but also the decision of the Hon'ble Supreme Court in Adityapur Area Development Authority vs. UOI & Others 283 ITR 97? 3. Whether on the facts and in the circumstances on the case and in law, the CIT (A) was justified in holding that the assessee was not liable to deduct tax at source on payment on interest to NOIDA ? 4. That the order of the CIT (A) being erroneous in law and on facts in respect of interest to NOIDA needs to be vacated and the order of the ACIT be restored.”
The facts in brief are that assessee is engaged in the real estate business and the company was allotted plots by NOIDA
3 I.T.As. No.4559 & 4560/DEL/2017 for group housing. During the course of survey u/s.133A carried out at the business premise of the assessee, it was found that assessee-company had paid interest of Rs.1,31,83,95,322/- to NOIDA on which it had not deducted tax at source. The Assessing Officer’s case was that the amount of interest paid to NOIDA should have been subjected to TDS u/s.194A and accordingly, he has raised the demand of payment of Rs.9,91,26,920/- in the Assessment Year 2011- 13 and Rs.13,18,39,540/- in the Assessment Year 2012-13.
Ld. CIT (A) following the decision of ITAT Delhi Bench in the case of Additional CIT (TDS) vs. Canara Bank order dated 07.08.2015 and judgment of Hon’ble Delhi High Court in the case of Rajesh Projects (India) Pvt. Ltd. vs. CIT (TDS)_II, (2017) 78 taxmann.com 263 (Delhi) held that assessee is not liable to deduct TDS, because same is covered by the exemption u/s.194A(3)(f).
It has been pointed out by the ld. counsel that now this issue stands covered by the decision of Hon’ble Supreme Court in the case of CIT (TDS) vs. Canara Bank, reported in (2018) 406 ITR 161 (SC) wherein the Hon’ble Supreme Court has held that NOIDA is a Corporation established by a State Act and is therefore entitled to exemption of payment of tax at source u/s. 194A(1).
On the other hand, ld. CIT-DR submitted that Hon’ble Apex Court in the case of NOIDA vs. CCIT reported in (2019) 406 ITR 178 (SC) has held that NOIDA is not a local authority
4 I.T.As. No.4559 & 4560/DEL/2017 within the meaning of Section 10(20), therefore all the provisions of Act shall apply.
After perusing the impugned order, we find that only issue on which demand has been created u/s. 201(1)/201(1A) is that assessee has not deducted TDS on the interest payment to NOIDA u/s. 194A (1). In so far as interest payment to NOIDA, this issue now stands squarely covered by the judgment of Hon’ble Supreme Court in the case of CIT (TDS) vs. Canara Bank (supra) wherein Their Lordships after detailed analysis of section 194A have held that, interest other than ‘interest and securities’ paid to NOIDA established by Uttar Pradesh Industries Development Act, 1976 is covered by notification dated 22.10.1970, and therefore, it is entitled to exemption of tax at source u/s. 194A(1). Similarly, in judgment of Hon’ble Apex Court has been relied upon by the ld. CIT-DR in the case of NOIDA vs. CCIT (supra) has held that NOIDA is entitled for benefit of Section 194A(3)(iii)(f).
In view of the aforesaid law laid down by the Hon’ble Supreme Court, we do not find any substance in the grounds raised by the Revenue and the same are hereby dismissed.
In the result, both the appeals of the Revenue are dismissed. Order pronounced in the open Court on 20th December, 2019.