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TMI Blog2016 (2) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and in law, the learned Addl. CIT(TDS) has grossly erred in holding that the appellant was liable to deduct tax at source under the Income Tax Act, 1961 (Act) from interest payment to New Okhla Industrial Development Authority (Noida Authority), a Corporation Established under a State Act. 3. That, on the facts and circumstances of the case and in law, the learned Addl. CIT(TDS) grossly erred in levying a penalty of Rs. 40,84,387/- under section 271C of the Act for alleged default in deducting tax at source under sect ion 194A of the Act on the payment of interest to Noida Authority, which needs to be deleted. 4. That, on the facts and circumstances of the case and in law, the learned CIT(A), in his order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07 held as followed -: " 8. It is observed that the assessee is a creation of the UP Industrial Area Development Act, 1976, a copy of which has been placed on page 102 of the assessee's paper book. Preamble of this Act reads as : "An Act to provide for the constitution of an Authority for the development of certain areas in the State into industrial and urban township and for matters connected therewith." The term 'Authority' has been defined u/s 2(b) to mean: 'Authority constituted u/s 3 of the Act.' Section 3(i), in turn, provides that: 'The State Government may, by notification, constitute for the purpose of this Act, an Authority to be called (Name of the area), industrial development authority, for any industrial development are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility. The Respondent complained to the Disability Commissioner against such termination. The Disability Commissioner `suggested' the employer to re-employ the Respondent, which suggestion was turned down by the appellant. The Respondent argued that the Commissioner, instead of making a mere suggestion, ought to have issued a direction to the employer. He filed a writ petition on this aspect. The Hon'ble High Court allowed the said writ petition and directed the employer company to reinstate the Respondent. The Hon'ble High Court held that the appellant, though a private limited company, was an 'establishment' under the Act. The appellant took the matter to the Hon'ble Supreme Court urging that it was not covered within the meaning of 'esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act.' The Hon'ble Supreme Court further observed that: `Thus, a State Financial Corporation is established under a central Act. Therefore, when the words "by and under an Act" are preceded by the words "established", it is clear that the reference is to a corporation established, that it is brought into existence, by an Act or under an Act. In short, the term refers to a statutory corporation as contrasted from a non-statutory corporation incorporated or registered under the Companies Act.' From the italicized portion of the above prescription of the judgment, it is manifest that in the context of a statutory corporation, the words `by and under an Act' can be read as `by an Act or under an Act'. The above observations make it explicit t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal in the case of Chief/Senior Manager, Oriental Bank of Commerce vs. ITO. Vide its order dated 15.7.2011 in ITA No.2228/Del/2011, the Tribunal has held that the payment of interest by Oriental Bank of Commerce to Ghaziabad Development Authority is covered within the provisions of section 194A(3)(iii)(f) and, hence, there is no obligation for deduction of tax at source. Consequently, the order passed u/s 201(1) was set aside. Similar view has been taken by the Amritsar Bench of the Tribunal in the case of ITO (TDS) vs. Branch Manager Jammu & Kashmir Bank Ltd. Vide its order dated 24.4.2012 in ITA No.206 to 210/Asr/2011, the Tribunal has held that payment of interest by the bank to Jammu Development Authority (Jammu) is exempt u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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