2008 (7) TMI 398

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....nancial years 2001-02 to 2004-05. In respect of these years the question which arose was whether the assessee was liable to deduct tax at source under section 194A of the Income-tax Act, 1961 (hereinafter referred to as "the said Act"). 2. According to the Revenue, the assessee was liable to deduct the tax at source and, not having done so, became an assessee in default. As recorded in the impugned order, the assessee is a provident fund trust of employees created after seeking exemption under section 16 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 ("EPF Act"). The trust is recognised and exempted both under the Fourth Schedule to the said Act by the Commissioner of Income-tax, Delhi as well as by the Providen....

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.... is not liable to deduct tax at source under section 194A of the said Act in respect of the payments with regard to interest. The Tribunal noted that neither the Assessing Officer nor the Commissioner of Income-tax (Appeals) had determined the status of the assessee-trust before holding the assessee to be in default for non-deduction of tax at source as provided under section 194A of the said Act. The Tribunal also referred to various decisions of the High Courts including: (i) CIT v. SAE Head Office Monthly Paid Employees Welfare Trust [2004] 271 ITR 159 (Delhi); [2004] 141 Taxman 364 (Delhi); (ii) CIT v. Shri Krishna Bandar Trust [1993] 201 ITR 989 (Cal); (iii) CIT v. Deepak Family Trust (No.1) [1995] 211 ITR 575 (Guj); 72 Taxman....

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....mbers to the hind. The relevant objects clause of the respondent-trust reads as follows: "It is hereby agreed and declared that the aggregate of the sums to be contributed and subscribed to the fund by the members as hereinafter defined by the Corporation in accordance with the Food Corporation of India (Contributory Provident Fund) Regulations, 1967 shall be paid and together with the income accruing from the use of or investments thereof held by the trustees and shall in their hands constitute the assets of the fund and the trustees shall hold and apply the assets of the said fund according to the said regulations which shall be binding on the members as hereinafter defined by the Corporation." 7. Under sections 160 and 161 of the A....