TaxTMI 
TaxTMI 
2018 (8) TMI 1374
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...., Adv., Mr. Hemant Jain, Adv., Mr. S.N. Tayag Rajan, Adv., Mr. Mahinder Singh, Adv., Mr. Nitesh Shrivastava, Adv., Mr. R.S. Saluja, Adv., Ms. Rubal Maini, Adv., Mr. Sandeep Chilana, Adv., Mr. Mohd. Raiz, Adv., Mr. Prbhu Dayal Chilana, Adv., Ms. Seema Joshi, Adv., Mr. Sidhartha Handa, Adv., M/s. SARC & Associates. For the Respondent(s) : Mrs. Anil Katiyar, AOR, Mr. Debesh Panda, AOR, Mr. V.D. Verma, Adv., Mr. Neil Chatterjee, Adv., Mr. Ravindra Kumar, AOR, Ms. Arti Singh, AOR, Ms. Pooja Singh, Adv., Ms. Kavita Jha, Adv., Ms. Devika Jain, Adv. JUDGMENT ASHOK BHUSHAN, J. Delay condoned. 2. These appeals have been filed against the common judgment of Delhi High Court dated 16.02.2017 by which the Delhi High Court has allowed the writ petitions filed by the private respondents herein. The appeals have been filed by New Okhla Industrial Development Authority, Greater Noida Industrial Development Authority, Commissioner of Income Tax as well as Income Tax Officer and others. The facts and issues in all the appeals being common, it shall be sufficient to refer the facts and pleadings in Civil Appeal No. 15130 of 2017 - Commissioner of Income Tax (TDS) - II & Ors. Vs. Rajesh ....
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....uestions of law and facts were heard together and were allowed by the Delhi High Court by its judgment dated 16.02.2017. Before the High Court, Greater Noida and the Noida authorities contended that they are local authorities within the meaning of Section 10(20) of the Income Tax Act, 1961, hence their income is exempt from the Income Tax. It was further contended that the interest received by them is exempt under Section 194A(3)(iii)(f) of the Income Tax Act and they are exempted from payment of any tax on the interest. 4. The revenue refuted the contention of Greater Noida and Noida contending that w.e.f. 01.04.2003, the Greater Noida and Noida is not a local authority within the meaning of Section 10(20) and further they are also not entitled for the benefit of notification issued under Section 194A(3)(iii)(f). It was further contended that with regard to payment of rent to the Noida and Greater Noida, the respondent-company was liable to deduct the tax on payment of interest, no income-tax was deducted by the respondent-company while paying rent to Noida and Greater Noida, hence they are "assessee-in-default". The revenue also relied on Division Bench judgment of Allahabad H....
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.... as Revenue has filed these appeals. 6. Learned counsel appearing for the Noida and Greater Noida contended that Noida and Greater Noida have been constituted under Section 3 of the Uttar Pradesh Industrial Area Development Act, 1976 and is a local authority within the meaning of Section 10(20) of the Income Tax Act, 1961. Reliance on notification dated 24.12.2001 issued by the Governor of the State of Uttar Pradesh under the proviso to Article 243Q(1) has also been placed to contend that by virtue of said notification both Greater Noida and Noida are municipalities and are covered by the local authorities as explained under the explanation to Section 10(20) of the Income Tax Act. It is further contended that interest income of the authorities is exempted under the notification issued under Section 194A(3)(iii)(f). Further reliance has been placed on Circular No. 35/2016 dated 13.10.2016 wherein it has been clarified that provision of Section 194-I of the Income Tax Act, 1961 on lumpsum lease premium paid for acquisition of long-term lands is not applicable. 7. It is further submitted that the question as to whether Noida/Greater Noida is local authority is engaging attent....
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.... the said controversy in CIVIL APPEAL NO._________ OF 2018 (arising out of SLP (C) No. 3168 of 2017) Commissioner of Income Tax(TDS) Kanpur and Anr. Vs. Canara Bank. Having held that Noida is covered by the notification dated 22.10.1970, the judgment of the Delhi High Court holding that Noida/Greater Noida is entitled for the benefit of Section 194A(3)(iii)(f) has to be approved. 13. Now coming to the direction of the High Court regarding deduction of tax at source on the payment of lease rent as per Section 194-I of the Income Tax Act, 1961, the authority has relied on Circular dated 30.01.1995. Section 194-I of the Income Tax Act provides as follows: "Section 194-I : Rent 2[Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident] any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of- 4[(a) two per cent. for the use of any machinery or plant or equipment; and (b) ten per cent. for the ....
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....agreement or arrangement for the use of any land. The High Court has read the relevant clauses of the lease deed and has rightly come to the conclusion that payment which is to be made as annual rent is rent within the meaning of Section 194-I, we do not find any infirmity in the aforesaid conclusion of the High Court. The High Court has rightly held that TDS shall be deducted on the payment of the lease rent to the Greater Noida as per Section 194-I. Reliance on circular dated 30.01.1995 has been placed by the Noida/Greater Noida. A perusal of the circular dated 30.01.1995 indicate that the query which has been answered in the above circular is "Whether requirement of deduction of income tax at source under Section 194-I applies in case of payment by way of rent to Government, statutory authorities referred to in Section 10(20A) and local authorities whose income under the head "Income from house property" or "Income from other sources" is exempt from income-tax." 15. In Paragraph 3 of the circular, it was stated that income of an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation o....