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TMI Blog2015 (9) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... ch, Nelamangala Branch, Trinity Circle Branch and Koramangala Branch). The issues and grounds raised in this appeal are similar and therefore, these appeals being heard together are disposed off by way of this common order. 2. The facts of the case, briefly, are as under :- 2.1 The aforesaid assesses, 4 branches of Canara Bank (supra) received deposits from Karnataka Industrial And Development Board ('KIADB') and paid interest thereon. In the periods under consideration, the assesses paid interest to KIADB without deducting tax at source (TDS) under Section 194A of the Income Tax Act, 1961 (in short 'the Act') in the belief that it was not liable to deduct tax since KIADB was exempt from tax, being registered under Section 12A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranch 2012-13 24,789 4. Nelamangala Branch 2012-13 95,140 5. Trinity Circle Branch 2013-14 58,980 6. Nelamangala Branch 2013-14 22,076 2.2 Aggrieved by the aforesaid orders raising demands by charging interest under Section 201(1A) of the Act for Assessment Year 2012-13 and 2013-14, the assessees preferred appeals before the CIT (Appeals), LTU, Bangalore. The learned CIT (Appeals) vide separate orders in respect of the 6 Branches of Canara Bank listed at Para 2.1 (supra) dismissed the assessees appeals. The learned CIT (Appeals) observed that KIADB has also not paid tax on the interest paid to it on the ground that it should be treated as a charitable organization whose income is exempt in terms of the definition of charitabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a statutory body, constituted under Section 5 of KIAD Act, 1966, the Board is registered under the provisions of Section 12A of the Income Tax Act, 1961 and therefore their income is exempt from income tax and hence they have returned a NIL income. As the Board is a Government entity, the appellant is exempt from the provisons of TDS under Section 196 of the Income Tax Act, 1961. 5. The learned CIT (Appeals) failed to appreciate and ought to have held that before applying Section 201(1A), the applicability of section 201(1) has to be established. On the facts and circumstances of the case, the appellant could not lawfully be asked to pay or make good any tax allegedly not deducted having regard to the principles laid down by the Courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal. It is contended that when the interest income paid by the assessee to KIADB is not liable to tax, there is no obligation on the part of the assessees to make deduction of tax at source. In support of this proposition, the learned Authorised Representative placed reliance on the decision of the Hon'ble High Court of Karnataka in the case of CIT V ITC Hotels Ltd., in ITA No.477 and 478/2009 dt.15.6.2015. In view of the above, the learned Authorised Representative prayed that the assessees appeals ought to be allowed. 3.3 Per contra, the learned Departmental Representative strongly relied on the impugned orders of the learned CIT (Appeals). 3.4.1 We have heard the rival submissions and perused and carefully considered the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, in respect of payments made by the assessee as they did not have a permanent establishing in India as per S.9 r/w its explanation and consequently provisions of Ss.201(1) and 201(1A) of the Act was not attracted ? 2. Whether the Tribunal was correct in not taking into consideration the principles enunciated by the Apex Court in Transmission Corporation of AP Ltd. Vs. CIT - 239 ITR 587, where it clearly laid down that the taxability or not of the income of M/s. Sheraton International, USA, was liable to tax in India or not had to be examined by the Assessing Officer under Section 195 of the Act and not in the hands of the payer / deductor of TDS ? The Hon'ble High Court while considering the above question of law, has ren ..... X X X X Extracts X X X X X X X X Extracts X X X X
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