Supreme Court: The bench of R.K. Agrawal and A.M. Sapre, JJ agreed to examine a plea of the income tax department whether the North Okhla Industrial Development Authority (NOIDA) is a corporation established by the Uttar Pradesh government under the state industrial development law or not. The Court said that it will look into the appeal filed by the IT department against an order of the Allahabad High Court which held that NOIDA is a corporation established under the Act and, therefore, banks are not liable to deduct income tax at source on fixed deposits.
The issue arose in 2013, when the IT department imposed a tax liability on the banks for non- deduction of TDS on the interest income on fixed deposit receipts (FDRs) of NOIDA. The banks, hence, preferred an appeal before the Commissioner of Income Tax (Appeals) (CIT-A), saying the NOIDA is a corporation established by the state law and banks are not under the statutory obligation to deduct and pay the income tax.
The IT department approached the Court against the order of the High Court and sought for determination of the issue as to whether NOIDA is a corporation entitled for exemption from deduction of income tax at source under the provisions of a notification issued in 1970 under the Income Tax Act.
Source: PTI
