TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Bank not liable to deduct TDS on interest payments to JDA as per Income Tax Act</h1> <h3>Pr. Commissioner of Income Tax Versus M/s The J AND K (J&K) Bank Ltd.</h3> Pr. Commissioner of Income Tax Versus M/s The J AND K (J&K) Bank Ltd. - TMI Issues Involved:1. Whether the ITAT erred in confirming the order of CIT(A) deleting the non-deduction of TDS on interest paid to the Jammu Development Authority (JDA).Summary:Issue 1: Obligation to Deduct TDS on Interest Payments to JDAThe Revenue filed appeals under Section 260A of the Income Tax Act, 1961, challenging the ITAT's order which confirmed the CIT(A)'s decision that the assessee-Bank was not required to deduct TDS on interest payments to JDA for the assessment years 2010-11 and 2011-12. The Assessing Authority had initially held that JDA is a Local Authority not exempt from tax, thus obligating the assessee-Bank to deduct TDS on JDA's deposits. The CIT(A), however, accepted the assessee-Bank's plea, relying on an earlier ITAT judgment, and ruled that no TDS was required.The ITAT upheld the CIT(A)'s decision, referencing its earlier ruling for the assessment years 2007-08 and 2008-09, which stated that JDA, incorporated under the J&K Development Act, 1970, was exempt from TDS under CBDT Notification No. 3489 dated 27.10.1970. This notification exempts corporations incorporated under a State Act from TDS provisions.The High Court, after reviewing Section 194A of the Act and the relevant notification, concluded that JDA, being a corporation established by the State Act, was exempt from TDS on interest payments. The Court referenced the Supreme Court's rulings in Commissioner of Income Tax (TDS), Kanpur vs. Canara Bank and Union Bank of India vs. Additional Commissioner of Income Tax (TDS), which dealt with similar issues concerning statutory authorities like NOIDA and Agra Development Authority.The Court dismissed the Revenue's reliance on the Adityapur Industrial Area Development Authority case, noting that it addressed a different issue regarding income exemption under Article 289(1) of the Constitution, not the applicability of Section 194A.Conclusion:The High Court held that ITAT committed no error in confirming the CIT(A)'s order and ruled that the assessee-Bank was not obligated to deduct TDS on interest payments to JDA, as JDA is a corporation established by the State Act and thus exempt under Section 194A(3)(iii)(f) of the Act. Consequently, both appeals were dismissed.
TaxTMI 
TaxTMI 
