COMMISSIONER OF INCOME TAX(TDS) KANPUR AND ANR. versus CANARA BANK

Citation: [2018] 7 S.C.R. 866 · Decided: 02-07-2018 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Dismissed

Cited by 2 judgment(s) · cites 5 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
866
SUPREME COURT REPORTS
[2018] 7 S.C.R.
COMMISSIONER OF INCOME TAX(TDS)
 KANPUR AND ANR.
v.
CANARA BANK
(Civil Appeal No. 6020 of 2018)
JULY 02, 2018
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Income Tax Act, 1961 – s.194A(3)(iii)(f) – Notification issued
under – Payment of interest to State Industrial Development
Authority – Exemption from deduction of tax at source – Benefit of,
when available – New Okhla Industrial Development Authority
(NOIDA) constituted under the 1976 Act – Respondent-Bank paid
interest to NOIDA in form of FDs/Deposits, however, did not deduct
tax at source – Assessing Officer holding that the respondent was
assessee in default, issued demand notice – Bank filed appeal before
Commissioner of Income Tax (Appeals) placing reliance upon
notification dtd. 22.10.1970 issued u/s.194A(3)(iii)(f) – Plea of
appellant-Revenue that NOIDA is not entitled for the benefit of
notification dtd. 22.10.1970 as under the said notification only a
Corporation established by Central, State or Provincial Act is entitled
for the benefit, however, NOIDA is not established by the 1976 Act
rather it is established under the 1976 Act – Held: Section
194A(3)(iii) uses both the expressions “by or under” – In Dalco
Engineering case, Supreme Court held that the phrase established
by or under the Act is a standard term used in several enactments to
denote a statutory corporation established or brought into existence
by or under the statute – Ratio laid down in Dalco Engineering case
fully covers the present case – Further, the composition of NOIDA
is statutorily provided by s.3 of 1976 Act itself, hence, it has been
constituted by the Act itself and is covered by notification dtd.
22.10.1970 – High Court did not commit any error in dismissing
the appeal filed by the appellant – Uttar Pradesh Industrial Area
Development Act, 1976– s.3– State Financial Corporation Act,1951
– Interpretation of Statutes.
[2018] 7 S.C.R. 866
866
A
B
C
D
E
F
G
H
867
Words & Phrases – ‘Corporation’, ‘Statutory Corporations’
and ‘Non-Statutory Corporations’ – Meaning of.
Words & Phrases – Expression ‘by or under’ – Meaning of.
Dismissing the appeals, the Court
HELD: 1.1 A Corporation is an artificial being which is a
legal person. It is a body/corporate established by an Act of
Parliament or a Royal Charter. It possesses properties and rights
which are conferred by the Charter constituting it expressly or
incidentally.  Corporations which are instrumentalities of the
Government are subject to the limitation as contained in the
Constitution. Whereas the statutory corporations owe their
existence from “by or under” statute, the non-statutory bodies
and corporations are not created by or under statute rather are
governed by a statute. [Paras 12, 17][875-F-G; 879-H; 880-B]
“ESTABLISHED BY A CENTRAL, STATE OR
PROVINCIAL ACT”
1.2  Section 194A(3)(iii) clauses (b), (c) and (d) of the Income
Tax Act, 1961 refer to expression “established”. In sub-clause
(b) expression used is “established by or under a Central, State
or Provincial Act”, in sub-clause (c) the expression used is
“established under the Life Insurance Corporation Act” and in
sub-clause (d) expression used is “established under the Unit
Trust of India Act”. The Section thus uses both the expressions
“by or under”. [Para 19][879-E-F]
1.3  In Dalco Engineering case Supreme Court held that
the phrase established by or under the Act is a standard term
used in several enactments to denote a statutory corporation
established or brought into existence by or under the statute.
Referring to provisions of The State Financial Corporations Act,
1951 which provides for establishment of various financial
corporations under the Act, it was held that such Financial
Corporations are established by an Act or under an Act. On
comparing the provisions of Section 3 of Uttar Pradesh Industrial
Area Development Act, 1976 with those of The State Financial
Corporations Act, 1951, it is clear that the establishment of
Corporation in both the enactments is by a notification by State
COMMISSIONER OF INCOME TAX(TDS) KANPUR v.
CANARA BANK
A
B
C
D
E
F
G
H
868
SUPREME COURT REPORTS
[2018] 7 S.C.R.
Government. In the present case, notification has been issued in
exercise of power of Section 3 of 1976 Act and the Authority
(NOIDA) has been constituted. The ratio laid down in Dalco
Engineering that establishment of various financial corporations
under State Financial Corporation Act, 1951 is establishment of
a Corporati

Excerpt shown. Read the full judgment & AI analysis in Lexace.