Corporation established by statute qualifies for TDS exemption where the enactment is the source of its existence and powers.

NOIDA qualifies as a corporation established by the Uttar Pradesh Industrial Area Development Act, 1976 because the statute itself creates the Authority and governs its composition, objects, powers, funds, accounts, control, and dissolution. The controlling distinction is between a corporation established by an Act and a body merely constituted or incorporated under an Act; here, the Act is the source of the Authority's existence and powers, so the exemption under section 194-A(3)(iii)(f) of the Income-tax Act applies. The result is entitlement to exemption from tax deduction at source.

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Issues: Whether NOIDA is a corporation established by the Uttar Pradesh Industrial Area Development Act, 1976 and consequently entitled to exemption from deduction of tax at source under section 194-A(3)(iii)(f) of the Income-tax Act, 1961.

Analysis: The exemption notification under section 194-A(3)(iii)(f) applies to any corporation established by a Central, State or Provincial Act. The controlling distinction is between a corporation established by an Act and a body merely constituted or incorporated under an Act. The provisions of the Uttar Pradesh Industrial Area Development Act, 1976 show that the Act itself creates the Authority, defines its composition, objects, powers, fund, accounts, control, and dissolution, and NOIDA owes its existence to that statute. The judgment further notes that the fine distinction between "by" and "under" does not defeat the exemption where the statute is the fountainhead of the Authority's existence and powers.

Conclusion: NOIDA is a corporation established by the Uttar Pradesh Industrial Area Development Act, 1976 and is entitled to the exemption from tax deduction at source. The appeal is dismissed.

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