Dismissing the appeal of the assessee, the Court held that New Okhla Industrial Development Authority (NOIDA) is not covered by the word /expression ‘Municipality’ in clause (e) of Article 243P. It is neither included in sub-clause (ii) of Explanation, nor is it covered by S.10(20) except clause (ii). NOIDA was constituted under S. 3 of the U.P. Industrial Area Development Act, 1976 by notification dt. 17-4-1976. The Act was enacted by State Legislature to provide for the constitution of an Authority for the development of certain areas in the State of UP into an industrial and urban township. Under the 1976 Act, various functions had been entrusted to the Authorities. Thus NOIDA is not a local authority, hence is not exempted from payment of income-tax under S. 10(20) and S.10(20A) of the Act. (CA Nos 792-793 of 2014, dt. 2-7-2018).

New Okhla Industrial Development Authority (NOIDA) v. CCIT (2018) 95 taxmann.com 58(SC)/ www.itatonline.org

23. S.80IC : Special category States – Initial year – The fact that the assessee has earlier availed deduction u/s. 80IA & 80IB is of no concern because deduction u/s. 80IC is available from the “initial year” i.e., the year of completion of substantial expansion. The inclusion of period for the deduction availed u/s. 80-IA & 80-IB, for the purpose of counting ten years, is provided in sub-section (6) of section 80IC and it is limited to those industrial undertakings or enterprises which are set-up in the North-Eastern Region.

    Assessees claim for the AY. 2008-09, 2009-10 u/s. 80IC of the Act was rejected by the AO on the ground that this was 11th and 12th year of deduction and as per S. 80IC(6), deductions under S. 80IC and S. 80IB cannot exceed the total period of ten years. Disallowance was affirmed by High Court. Allowing the appeal of the assessee the Court held that: the fact that the assessee has earlier availed deduction u/s. 80IA & 80IB is of no concern because deduction u/s. 80IC is available from the “initial year” i.e., the year of completion of substantial expansion. The inclusion of period for which deduction was availed u/s. 80IA & 80IB, for the purpose of counting ten years, is provided in sub-section (6) of S. 80IC and it is limited to those industrial undertakings or enterprises which are set-up in the North-Eastern Region. (CA No(s). 4765-4766 of 2018, dt. 18-5-2018) (AYs. 2008-09, 2009-10)

    Mahabir Industries v. PCIT (SC), www.itatonline.org

24. S.194I : Deduction at source – Rent – Annual rent paid under lease deed is rent – Tax to be deducted at source from the payment of lease rent to NOIDA /Greater NOIDA [Ss.10(20), (10(20A)]

    Court held that the definition of ‘rent’ in the explanation to S.194I is very wide explanation states that “Rent” means any payment, by whatever name called under the lease, sub-lease, tenancy or any other agreement for the use of any land. The High Court has read the relevant clause of the lease deed and has rightly come to the conclusion that payment which is to be made as annual rent is rent with in the meaning of S.194I. Accordingly payment of annual lease rent to NOIDA/Greater Noida is liable to deduction of tax at source. Court also observed that Circular No 699 dt. 30th Jan., 1995 (2012) 212 ITR 2 (St) cannot be relied upon by NOIDA/Greater Noida to contend that there is no requirement of tax deduction at source under S.194I. (CA Nos. 9199/12750/15613/15615/2017 dt. 2-7-2018) (AYs. 2010-11, 2011-12)

    New Okhla Industrial Development Authority (NOIDA) v. CCIT (2018) 168 DTR 145 (SC)

25. S.194LA : Deduction at source – Compensation on acquisition of certain immovable property – Where Land Acquisition Collector while disbursing compensation, had deducted tax at source and deposited same with Income Tax Department, better course of action, which was in consonance with provisions of Act, for assessee should have been to approach concerned Assessing Officer and raise issue that no tax was payable on compensation/enhanced compensation received by them as their land was agricultural land – Collector was directed to follow the procedure prescribed by Kerala High Court. [S.197]

    Court held that it is Assessing Officer who has to come to conclusion whether land is agricultural land or not. Accordingly where Land Acquisition Collector while disbursing compensation, had deducted tax at source and deposited same with Income Tax Department, better course of action, which was in consonance with provisions of Act, for assessee should have been to approach concerned Assessing Officer and raise issue that no tax was payable on compensation/enhanced compensation received by them as their land was agricultural land. Court also held that in future, Land Acquisition Collectors shall follow the procedure as stipulated by the High Court of Kerala in Nalini v. Dy. Collector, Land Acquisition [2006 (4) ILR Kerala 229

    UOI v. Hari Singh (2018) 254 Taxman 126 (SC)

26. S.220 : Collection and recovery – Assessee deemed in default – Stay – CBDT’s OMs dated 29-2-2016 & 31-7-2017 by which AO’s have been directed to grant stay of disputed demand on payment of 20%/15% does not fetter the power of the AO & CIT to grant stay on payment of amounts lesser than 15%/20%. The AO/CIT have to deal with the prima facie merits and give reasons for rejection of the stay application

    “Having heard Shri Vikramjit Banerjee, learned ASG appearing on behalf of the appellant, and giving credence to the fact that he has argued before us that the administrative Circular will not operate as a fetter on the Commissioner since it is a quasi judicial authority, we only need to clarify that in all cases like the present, it will be open to the authorities, on the facts of individual cases, to grant deposit orders of a lesser amount than 20%, pending appeal. The appeal is disposed of accordingly.” (CA. No. 6850 of 2018, dt. 20-7-2018) (AY. 2007-08)

    PCIT v. LG Electronics India Pvt. Ltd. (SC),www.itatonline.org

27. S.252 : Appellate Tribunal – ITAT Appointment Rules – Persons selected as Member of the ITAT will continue till the age of 62 years and the person holding the post of President, shall continue till the age of 65 years

    The validity of the ‘Tribunals, Appellate Tribunals and Other Authorities (Qualifications, Experience And Other Conditions of Service of Members) Rules, 2017‘ had been challenged in the Supreme Court in Kudrat Sandhu v. UOI (Writ Petition (Civil) No. 279 of 2017).

    The Supreme Court had earlier directed that pending the outcome of the challenge, the appointment of Members of the ITAT will be for a period of five years or till the maximum age that was fixed under the old Act and Rules.

    The Supreme Court has now clarified the situation as follows:

    “At this juncture, we may note that there is some confusion with regard to the Income Tax Appellate Tribunal (ITAT) as regards the age of superannuation.

    We make it clear that the person selected as Member of the ITAT will continue till the age of 62 years and the person holding the post of President, shall continue till the age of 65 years.”

    See also: Law Ministry Invites Applications for Appointment to Posts of Judicial & Accountant Members In ITAT WP(C) No. 279/2017

    Kudrat Sandhu v. UOI (2018) 95 taxman.com 167 -(SC), www.itatonline.org

28. S.260A : Appeal – High Court – Inter-department litigation –Clearance from the Committee on dispute – Order of High Court directing the CIT to approach the High Powered Committee for clearance from Committee on Dispute for filing appeal before the High Court is set aside and matter remanded to High Court for deciding the appeal on merits

    Allowing the appeal of the Revenue, Order of High Court directing the CIT to approach the High Powered Committee for clearance for filing appeal before the High Court was set aside and the matter remanded to High Court for deciding the appeal on merits. Referred Oil & Natural Gas Commission v. CCE (1994) 116 CTR 643/ 1994 (70) ELT 45 (SC).

    CIT v. Doordarshan Commercial Services (2018) 166 DTR 425 (SC)

29. Interpretation of taxing statutes –Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. The ratio in Sun Export Corporation, Bombay v. Collector of Customs Bombay (1997) 6 SCC 564 is not correct and all the decisions which took similar view as in Sun Export Case stand overruled

The Full Bench of Supreme Court explained the entire law on interpretation of statutes, relating to ‘purposive interpretation’, ‘strict interpretation’, ‘literal interpretation’, etc. Difference in interpretation of statutes v. exemption notifications explained. When there is doubt or ambiguity in interpretation of a statute or notification/the question whether the benefit of doubt should go to the taxpayer or to the revenue explained. Law on Doctrine of Substantial Compliance and “intended use” also explained. Court held as under:

(1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification.

(2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue.

(3) The ratio in Sun Export Corporation, Bombay v. Collector of Customs Bombay (1997) 6 SCC 564 is not correct and all the decisions which took similar 
view as in Sun Export Case stand overruled.

The instant civil appeal was directed to be placed before appropriate Bench for considering the case on merits after obtaining orders from the Hon’ble Chief Justice of India. (CA No. 3327 of 2007, dt. 30-7-2018).

Commissioner of Customs v. Dilip Kumar (FB)(SC), www.itatonline.org

Interpretation of taxing statutes – “Explanation” and “Proviso”

In a taxing Act, one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing to be read in nothing is to be implied. One can only look fairly at the language used. (CA Nos. 792-793 of 2014, dt. 2-7-2018).

New Okhla Industrial Development Authority (NOIDA) v. CCIT (2018) 95 taxmann.com 58(SC)/ www.itatonlin.org

Interpretation of taxing statutes – Rule against double taxation

A taxing statute should not be interpreted in such a manner that its effect would be to cast a burden twice over for the payment of tax on the taxpayer unless the language of the statute is so compelling that the Court has no alternative than to accept it. In case of reasonable doubt, the construction most beneficial to the taxpayer is to be adopted. (Referred, Laxmipat Singhania v. CIT (1969) 72 ITR 291 (SC) Jain Brothers v. UOI (1970) 77 ITR 107 (SC);

Mahaveer Kumar Jain v. CIT (2018) 404 ITR 738/ 165 DTR 113/ 302 CTR 1/ 255 Taxman 161 (SC), www.itatonline.org