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2015 (5) TMI 519 - HC - Income TaxExemption certificate for non deduction of TDS under Section 197 rejected - as per assessee interest in question earned on the funds provided by the State Government is not at all the income of the petitioner and not only it has never been taxed but has continuously been given the benefit of exemption certificate under Section 197 - Held that:- This Court finds sufficient force in the submission of learned counsel for the petitioner. The impugned order passed in the present matter does not show any application of mind as no reasons have been assigned for rejecting the proposal for issuance of exemption certificate under Section 197 of the Act whereas on a proper consideration of the direction of this Court in a similar writ application, the CIT, (TDS) had passed earlier the order dated 24.4.2010. The said order was a reasoned order after noting the prima facie satisfaction of this Court under its order dated 20.7.2009 and cannot be said to be unlawful by the Income Tax Authorities and further relying upon the decisions of the Delhi High Court and Karnataka High Court, reported in COMMISSIONER OF INCOME-TAX Versus DELHI STATE INDUSTRIAL DEVELOPMENT [2007 (4) TMI 150 - HIGH COURT, DELHI] and Commissioner of Income-Tax And Another Versus Karnataka Urban Infrastructure Development And Finance Corporation [2006 (2) TMI 114 - KARNATAKA High Court]. Thus, if at all, the respondent-authorities were of the view that they could take a different stand in a fresh assessment order, there being admittedly no question of res judicata in assessment of income for different assessment years, they were still required to do so acting properly in the matter by giving good reasons for disagreeing with the earlier order dated 20.4.2010 which has not been done in the present matter. As a matter of fact, there has been no change in the nature of interest earned on the funds provided by the State Government which have gone in the Bank and it is not open to the Department to come to a different conclusion in view of the overriding effect of the provisions of Article 289 of the Constitution of India. For the aforesaid reasons, the writ application is allowed. The impugned letter communicating the decision of the CIT (TDS) is quashed. The respondents shall issue exemption certificate to the petitioner, accordingly. - Decided in favour of assessee.
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