Income Tax Act, 1961 – s.10(20) – Applicability of – Local authority – Noida – Held: Noida is not a local authority within the meaning of s.10(20) as amended by Finance Act, 2002 w.e.f 01.04.2003 by virtue of decision in Civil Appeal No. 792-793 of 2014 – Uttar Pradesh Industrial Area Development Act, 1976. Income Tax Act, 1961 – s.194A(3)(iii)(f) – Exemption of interest income by virtue of Notification dated 24.10.1970 – Held, it was decided in Commissioner of Income Tax v. Canara Bank that Noida is covered by the said notification and Noida/Greater Noida is entitled to the benefit of s.194A(3)(iii)(f) – The said view is approved.
Income Tax Act, 1961 – s.194-I – Deduction of tax at source on payment of lease rent – Held: Tax is deductible at source on payment of lease rent to the Greater Noida as per s.194-I of the Act. Dismissing the appeals, the Court
HELD: 1. The definition of rent as contained in the explanation to Section 194-I is a very wide definition. Explanation states that “rent” means any payment, by whatever name called, under any lease, sublease, tenancy or any other 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. The High Court rightly held that TDS shall be deducted on the payment of the lease rent to the Greater Noida as per Section 194-I. A perusal of circular dated 30.01.1995 indicate that the query which has been answered in the circular is “Whether requirement of deduction of income888 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.” A perusal of the circular indicate that circular was issued on the strength of Section 10(20A) and Section 10(20) as it existed at the relevant time. Section 10(20) has been amended by Finance Act, 2002 by adding an explanation and further Section 10(20A) has been omitted w.e.f. 01.04.2003. The very basis of the circular has been knocked out by the amendments made by Finance Act, 2002. Thus, the Circular cannot be relied by Noida/Greater Noida to contend that there is no requirement of deduction of tax at source under Section 194I. Thus, deduction at source is on payment of rent under Section 194-I, which is clearly the statutory liability of the respondentcompany. [Paras 14, 16][895-G-H; 896-A-B, F-H]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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