- (1.) This appeal, which has been filed under section 260 -A of the Income Tax Act, 1961 The Act at the instance of the Department, was admitted on the following question of law : "(A) Whether the ITAT as well as the Commissioner of Income Tax (A) have erroneously interpreted that NOIDA (New Okhla Industrial Development Authority) is a corporation established by U.P. Industrial Area Development Act, 1976 and not a body established under the aforesaid Act."
(2.) It transpires from the records of the appeal that the Assessing Officer noticed that for the Assessment Years 2006 -07 and 2007 -08, M/s. Canara Bank The Bank failed to deduct tax at source under section 194 -A(1) of the Act on the interest credited/paid on the fixed deposit receipts purchased by the New Okhla Industrial Development Authority NOIDA. In the present Appeal, we are concerned with the Assessment Year 2006 -07. Accordingly, a notice was issued to the Bank. The contention of the Bank that NOIDA is a Corporation established by a State Act and, therefore, exempted from deduction of income tax at source in view of the notification dated 22 October 1970 issued under section 194 -A(3)(iii)(f) of the Act was not accepted. The Assessing Officer also did not accept that NOIDA was a local authority even after 1 April 2003 within the meaning of section 10(20) of the Act and, therefore, entitled to exemption from payment of income -tax. The Bank was held to be an assessee in default and an order under section 201(1)/201(1 -A) of the Act was passed on 28 February 2013 . A demand notice under section 156 was issued and penalty proceedings under section 271 -C of the Act were directed to be initiated separately.
(3.) Feeling aggrieved, the Bank filed an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals), however, after examination of the provisions of Uttar Pradesh Industrial Area Development Act, 1976 Industrial Act held that the NOIDA was a corporation established by the said Act and, therefore, entitled to the benefit of the notification dated 22 October 1970. The appeal was, accordingly, allowed. The department filed an appeal before the Income Tax Appellate Tribunal which by order dated 7 August 2015 dismissed the appeal filed by the department.;