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2023 (8) TMI 728 - HC - Income TaxDeduction of tax at source u/s 194A - payments made to local authorities, including New Okhla Industrial Development Authority [in short, “NOIDA”] - Order passed u/s 201(1)/201(1A) - HELD THAT:- The legal issue, (which is that the petitioner bank was not required to deduct tax at source on payments towards interest made to NOIDA with regard to fixed deposits created by them), cannot but accept that the issue is covered against the respondent/revenue, in view of the decision of the Supreme Court in Commissioner of Income Tax (TDS) Kanpur and Anr. vs Canara Bank [2018 (7) TMI 664 - SUPREME COURT]. According to us, insofar as the respondent/revenue is concerned, the retention of the amount from the point of view of NOIDA, is contrary to the provisions of Article 265 of the Constitution. If we allow the respondent/revenue to retain the money, it would, in effect, amount to putting the court’s imprimatur, on the respondent/revenue’s act of levying and/or collecting tax, without the authority of law. In our opinion, in this particular case, having regard to the fact that public funds are involved, law and justice should meld. Therefore, we are inclined to quash the order passed u/s 201(1)/201(1A) r.w.s. 194A of the Income Tax Act, 1961. The respondent/revenue will refund the amount deposited by the petitioner bank within three (3) weeks of receipt of a copy of this judgement.
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