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TMI Blog2022 (3) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... nature. Placing reliance on certain authorities the Ld. counsel claimed that the payment to the Noida Authority etc. was not covered by the liabilities u/s. 194I and the impugned order was incorrect in law. 5. The Ld. Counsel placed reliance on the order dated 04.12.2006 of Hon'ble Supreme Court in the case of Enterprising Enterprises Vs. DCIT where the Hon'ble Court directed that there was no need to deduct tax on payment of lease rent. With due respect to the said orders of Hon'ble Supreme Court it is to be noted that being an order the same cannot be a precedence. This order accordingly, is of no help to the appellant. 6. The Ld. Counsel of the appellant further placed reliance on the judgment of Hon'ble Allahabad High Court in (2015) 379 ITR 14 (All.) which is on the procedure to be adopted by the assessing officer u/s. 143 and is not concerned with section 194I. This authority also is therefore of no help to the appellant. The Ld. counsel' placed reliance on an order of ITAT, Delhi Benches in the case of ITO Vs. The Indian Newspaper Society, A.Ys. 2007-08 and 2009-10 where the Tribunal made a distinction between the payment of capital account and paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Development Authority for Plot No. GH07A for development and marketing of Group Flats. As per terms of the lease deed, the company partially paid the consideration amount for the acquisition of the plot to Greater Noida at the time of execution of the lease deed and is also paying the balance lease premium annually as per the terms and conditions of the lease deed. Notice under Section 201/201(A) of the Income Tax Act, 1961 was issued by the Income Tax department inquiring regarding non-deduction of tax at source under Section 194I of the Income Tax Act from the annual lease rent paid to Greater Noida. The respondent company replied the notices. The respondents case was that it did not deduct tax at source as it was advised by Greater Noida that it is a Government authority, hence the tax deduction at source provisions are not applicable. The Assessing Officer passed the order dated 31.03.2014 for the Financial Year 2010-2011 and 2011-2012, the respondent was held as "assessee in default" for non-deduction/non-deposit of TDS on account of payment of lease rent and interest made to Greater Noida. Consequent demand was raised against the respondents. Aggrieved by assessment order, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l authorities within the meaning of Section 10(20) as amended w.e.f. 01.04.2003. Delhi High Court further held that interest income of the Noida and Greater Noida is exempted under the notification dated 22.10.1970 issued under Section 194A(3)(iii)(f) of the Income Tax Act. The High Court further held that as far as payment of rent to the Noida and Greater Noida, the respondent company was liable to deduct income tax at source. The High Court recorded its conclusions in Para 20 of the judgment, which is to the following effect: "20. In view of the above analysis, the court hereby concludes as follows: (1) Amounts paid as part of the lease premium in terms of the time schedule(s) to the Lease Deeds executed between the petitioners and GNOIDA, or bi-annual or annual payments for a limited/specific period towards acquisition of lease hold rights are not subject to TDS, being capital payments; (2) Amounts constituting annual lease rent, expressed in terms of percentage (e.g. 1%) of the total premium for the duration of the lease, are rent, and therefore subject to TDS. Since the petitioners could not make the deductions due to the insistence of GNOIDA, a direction is issued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Circular dated 30.01.1995. 8. Learned counsel for the revenue in support of its appeal submits that Noida and Greater Noida are not covered by the definition of local authority as contained under Section 10(20) and their income is not exempted under Section 10(20). Judgment of Allahabad High Court dated 28.02.2011 in Writ Petition Tax No. 1338 of 2005 was also relied by the revenue against which appeal has already been filed by Noida and has been heard. With regard to income tax deduction at source under Section 194A, the revenue has referred to its appeal in Special Leave Petition (C) No. 34530 of 2016 Commissioner of Income Tax TDS Kanpur Vs. Central Bank of India, where the arguments has already been concluded and judgment is reserved. 9. Learned counsel for the revenue submits that Noida/Greater Noida is not entitled for the benefit of Section 194A(3)(iii)(f). 10. We have considered the submissions of the learned counsel for the parties and perused the records. 11. Insofar as the appeals filed by Noida/Greater Noida are concerned, the principal submission raised by the appellant is applicability of Section 10(20) of the Income Tax Act. Learned counsel for the Noida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one hundred eighty thousand rupees] : 6[Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such income by way of rent is credited or paid, shall be liable to deduct income tax under this section.] 1[Provided also that no deduction shall be made under this section where the income by way of rent is credited or paid to a business trust, being a real estate investment trust, in respect of any real estate asset, referred to in clause (23FCA) of section 10, owned directly by such business trust.] Explanation : For the purposes of this section, 2[(i) "rent" means any payment, by whatever name called, under any lease, sublease, tenancy or any other agreement or arrangement for the use of (either separately or together) any, (a) land; or (b) building (including factory building); or (c) land appurtenant to a building (including factory building); or (d) machinery; or (e) plant; or (f) equipment; or (g) furnitur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for paying it is satisfied about their tax-exempt status under clause (20) or (20A) of Section 10 on the basis of a certificate to this effect given by the said authorities." 16. A perusal of the above circular indicate that circular was issued on the strength of Section 10(20A) and Section 10(20) as it existed at the relevant time. Section 10(20) has been amended by Finance Act, 2002 by adding an explanation and further Section 10(20A) has been omitted w.e.f. 01.04.2003. The very basis of the circular has been knocked out by the amendments made by Finance Act, 2002. Thus, the Circular cannot be relied by Noida/Greater Noida to contend that there is no requirement of deduction of tax at source under Section 194-I. Thus, deduction at source is on payment of rent under Section 194-I, which is clearly the statutory liability of the respondent--company. The High Court has adjusted the equities by recording its conclusion in Paragraph 20 and issuing a direction in Paragraph 21. 17. In view of what has been stated above, we do not find any error in the judgment of the High Court dated 16.02.2017. In result, all the appeals are dismissed." .......................... J. ( A.K. SI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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