Ashok Bhushan, J. - (1.) 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 Projects (India) Pvt. Ltd. & Anr. for deciding this batch of appeals.
(3.) The respondent Rajesh Projects (India) is a private limited company engaged in the business of real estate activities of constructing, selling residential units etc. On 03.11.2010, the respondentcompany entered into a longterm lease for 90 years with the Greater Noida Industrial Development Authority for Plot No. GH07A for development and marketing of Group Flats. As per terms of the lease deed, the company partially paid the consideration amount for the acquisition of the plot to Greater Noida at the time of execution of the lease deed and is also paying the balance lease premium annually as per the terms and conditions of the lease deed. Notice under Section 201/201(A) of the Income Tax Act, 1961 was issued by the Income Tax department inquiring regarding nondeduction of tax at source under Section 194I of the Income Tax Act from the annual lease rent paid to Greater Noida. The respondentcompany replied the notices. The respondents case was that it did not deduct tax at source as it was advised by Greater Noida that it is a Government authority, hence the tax deduction at source provisions are not applicable. The Assessing Officer passed the order dated 31.03.2014 for the Financial Year 20102011 and 20112012, the respondent was held as "assesseeindefault" for nondeduction/nondeposit of TDS on account of payment of lease rent and interest made to Greater Noida. Consequent demand was raised against the respondents. Aggrieved by assessment order, the respondentcompany filed an appeal before the Commissioner of Income TaxAppeals. Respondents prayed to stay the demand which was refused and recovery proceedings were initiated. Aggrieved by assessment and recovery proceedings emanating therefrom, the respondentcompany filed a Writ Petition No. 8085 of 2014 praying for various reliefs including the relief that respondentcompany be not treated as "assesseeindefault" under the Income Tax Act for nondeduction/depositing the tax at source in respect of payment of rent on lease land and in respect of other charges paid to Greater Noida. Different other entities also filed the writ petitions in the Delhi High Court praying for more or less the same reliefs relating to lease rent payment and for payment of interest to Greater Noida. All the writ petitions involving common questions 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.;