TaxTMI 
TaxTMI 
2015 (5) TMI 519
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.... the petitioner, learned Senior Standing Counsel for the Income Tax Department and learned counsel for the respondent nos. 4,5 and 6. The writ application has been filed seeking quashing of the communication dated 11.3.2015 issued by respondent no.1, the Assistant Commissioner of Income Tax (TDS), Circle, Patna in which it has been stated that the Commissioner of Income Tax, TDS Circle, Patna has rejected the proposal for issuance of exemption certificate under Section 197 of the Income Tax Act for the financial year 2014-15 and for consequential reliefs. The short facts of the case are that the petitioner is a statutory authority constituted under the Bihar Industrial Area Development Authority Act, 1974 being an instrumentality of t....
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....e provisions of Article 289 of the Constitution of India. It is the further case of the petitioner that since the financial year 2008-09 onwards the petitioner has been applying for and getting exemption from deductions under the provisions of Section 197 of the Income Tax Act. It is also the stand of the petitioner that in none of the assessments of any assessment year ever the said interest has been treated as the income of the petitioner and no tax has ever been levied upon the said interest. However, for the financial year 2014-15 by the impugned communication dated 11.3.2015 it has been informed by the Assistant Commissioner of Income Tax, TDS Circle, Patna that the Commissioner of Income Tax, TDS Circle, Patna has rejected the prop....
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....ed and the matter is remitted back to the concerned Authority of the Income Tax Department, i.e., Assistant Commissioner of Income Tax, TDS Circle, Patna for passing fresh order in accordance with law and after due application of mind to all relevant facts, some of which have been noticed in this order. The said Authority should pass fresh order in respect of petitioner's application under Section 197 of the Act without any delay and preferably within one month from today. Till then no coercive action shall be taken to realize tax deduction at source in respect of interest income which the petitioner may receive." It is further submitted that pursuant to the same the Assessing authority had rejected the claim of the petitioner under Sect....
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....hat the funds/grants belonged to the Government of Bihar." The assessee has further, relied on the decisions of Hon'ble Delhi High Court and Hon'ble Kernataka High Court reported in 295 ITR page 419 and 284 ITR page 582 (Kernataka). On careful consideration of these two judgments, I Find that the case of the assessee is covered by the judgments of Hon'ble Delhi and Kernataka High Courts." After the aforesaid order dated 20.4.2010, the petitioner has been continuously getting the benefit of exemption under Section 197 of the Income Tax Act so far as the said interest is concerned. It is also submitted by learned counsel for the petitioner that the order dated 11.3.2015 suffers from complete non-application of mind as no reasons have be....
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....changed which does not have any effect so far as the statutory status of the petitioner is concerned. It is also urged by learned counsel for the petitioner that all such issues have no relevance so far as the term "interest as income" is concerned as admittedly the said interest income accrues upon the funds provided by the Central Government or State Government for specific purposes which funds have to be utilized in accordance with the statutory provisions and directions of the Central Government or State Government or even the interest thereon has to be similarly utilized and the same can never be considered as the income of the petitioner. Thus, the status of the petitioner as a charitable institution and/or a local authority has no re....