FORM NO.

35
[SEE RULE 45] APPEAL TO THE COMMISSIONER OF INCOME-TAX(APPEALS) NOIDA NO. ........... OF ............
Name and address of the appellant Permanent Account Number Assessment year in connection with which the appeal is preferred Assessing Officer/Valuation Officer passing the order appealed against Section and sub-section of the Income-tax Act, 1961 under which the Assessing Officer/Valuation Officer passed the order appealed against and the date of such order. Where the appeal relates to any tax deducted under section 195(1), the date of payment of the tax. Where the appeal relates to any assessment or penalty, the date of service of the relevant notice of demand. In any other case, the date of service of the intimation of the order appealed against. Section and clause of the Income-tax Act, 1961, under which the appeal is preferred. Where a return has been field by the appellant for the assessment year in connection with which the appeal is preferred, whether tax due on the income returned has been paid in full. (If the answer is in the affirmative, give details of date of payment and amount paid.) Where no return has been filed by the appellant for the assessment year in connection with which the appeal is preferred, whether an amount equal to the amount of advance tax payable by him during the financial year immediately preceding such assessment year has been paid. (If the answer is in the affirmative, give details of date of payment and amount paid.) Relief claimed in appeal Where an appeal in relation to any other assessment year is pending in the case of the appellant with any Commissioner (Appeals), give the details as to the --(a) Commissioner (Appeals), with whom the appeal is pending; (b) Assessment year in connection with which the appeal has been preferred; (c) 6[Assessing Officer] passing the order appealed against; (d) Section and sub-section of the Act, under which the Assessing Officer passed the order appealed against and the date of such order] Address to which notices may be sent to the appellant

VIJAYA BANK,N-17 SECTOR - 18, NOIDA (U. P.) AAACV4791J(TAN No MRTV00472D) 2005-06 Additional Commissioner Of Income Tax (TDS) Ghaziabad U/S 201(1)/201(1A) of the Income Tax Act, 1961 order dt. 28.02.2013 N.A. 04/03/2013 N.A. 246 of the Income Tax Act, 1961 All the TDS due was deposited

NA

As per Grounds of Appeal

NA NA NA NA M/s Agarwal Deepak & Associates. Chartered Accountants, S-3 & 4, Shree Krishna Complex, Sharma Market, Sector-5, Noida, 201301, U.P.

Signed (Appellant)

Grounds of Appeal

1.

That the Learned Additional Commissioner of Income Tax has erred in law as well as on facts to treat the appellant bank in default in not deducting TDS on interest on deposits paid to New Okhla Industrial Development Authority (NOIDA), amounting to Rs. 5.07 Crores. That the Learned Additional Commissioner of Income Tax has erred in law as well as on facts to impose tax demand of Rs. 1,37,94,710 on the Appellant Bank, on account of Non Deduction of TDS Rs. 56,88,540 and Interest thereon amounting to Rs.81,06,170 and the same ought to be deleted. That the basis adopted and finding recorded by the Learned Additional Commissioner in the order is wrong and illegal and against the material available on the records. That the Learned Additional Commissioner of Income Tax has erred in proposing the initiation of penalty proceeding against the Appellant Bank u/s 271 C of the Income Tax Act and the same ought to be dropped. That the appellant craves the right to make, amend, add or alter any grounds of Appeal if required.

2.

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5.

STATEMENT OF FACTS
1. During the year under consideration the Appellant, which is a Public Sector Bank, had paid a sum of Rs.5.07 Crores to New Okhla Industrial Development Authority as Interest on Deposits and no TDS was deducted due to representation made by the Authority to the Bank that the said authority is covered by exemption u/s 10(20) being Local Authority (PAN No AAALN0120A). Dispute regarding the status of NOIDA authority was raised by the Income Tax Department during Financial Year 2005-06 and Issued Notice U/S 142(1) Dated 29/08/2005 for the Assessment year 2003-04 & 2004-05 against these notices NOIDA Authority had filed Writ Petition No 1338/2005 with Honble Allahabad High Court and Honble Court Stayed the Proceeding of Income Tax Department vide their order dated 29/09/2005 and stated that we are Prima facie satisfied that NOIDA is covered by Section 10(20) of The Income Tax Act. NOIDA Authority had written a letter dated 05/10/2005 and instructed us not to deduct the tax due to stay of Honble High Court . That the Learned Additional Commissioner himself admitted in his order that The Status of NOIDA as Local Authority has also not been accepted by Honble High Court in Writ Petition Tax No 1338 of 2005 Vide Order Dated 28/02/2011. When the matter is subjudice and It was decided by Honble High Court on 28/02/2011, then how we could deduct the TDS from NOIDA Authority in the Assessment Year 2005-06. Further Noida Authority has filed SLP in the Supreme Court and decision is still pending, In-spite of that the Learned Additional Commissioner has Passed an Order U/S 201(1) /201(1A) of the Income Tax Act and raised a demand of Rs. 1,37,94,710/- on account of Non Deduction of TDS Rs. 56,88,540 and Interest Amounting Rs.81,06,170. 2 . In the circumstances we submit that the claim of the authority is further supported by the fact that the NOIDA is a State Government Authority wholly owned by the State Government and hence no TDS was deductible there from under section 194A as claimed.

3. The Declared object of TDS in general was to collect tax at the time income (like salaries, interest on securities or dividends) are paid, so that the Government could have a regular inflow of cash resources, collect tax in advance, prevent evasion of tax by tracking the Income and also place the responsibility of deducting and depositing tax on the shoulders of persons other than the payees. 4. As per your notice, it is contended that NOIDA is not filling its return of income hence provisions of section 191 shall not be applied. In this regards we submit that the payee in this case is not an ordinary person but is state government statutory authority which has higher accountability in terms of legal compliances including representations made to the deductor banks, since it is also one of the quasi-judicial authorities having certain crown and privileges. NOIDA is a state government authority and if it is not exempt from charge of tax, than the income tax department can always collect the income tax due from the said authority, which is also a cash-rich government body. 5. NOIDA has already encashed its fixed deposits with the Bank much before the issue of the notice and any TDS out of abundant caution made at this stage could be the direct loss of the Bank, since it would not be feasible for it to recover such TDS reimbursement from NOIDA, since the Payee may not accept Form No. 16A part whereof have already become time barred under normal provisions of the Income Tax Act. 6. The Appellant urge that TDS is collection machinery, the facts of this case have become peculiar, the payee is not private party but it is a statutory authority of State Government. Apart from provision of the Income tax act the issue may also be matter of constitutional rights between State authority and Finance Ministry of the Central Government, with which the Bank has no concerns. The tax department has inherent overriding powers to take up assessment proceedings against NOIDA, holding it if necessary, as an assessee in default and can recover the due tax demands from huge assets owned by the said State Government authority. On the other hand belated alleged TDS deduction by the Bank would only be complicating the issue for such highly debatable TDS obligation. 7. On contacting NOIDA on this issue, the Appellant have come to know that Asstt. Commissioner Income Tax NOIDA has already issued Notice to NO1DA to file return. & Department Income Tax for the Financial Year 2004-05 to 2007-08 to the sum of Rs. 1,080 Crore (approx) . The income on which this amount has been assessed include the interest amount paid by Bank to NOIDA on FDR etc, Hence deduction of TDS now on this amount will mean double taxation as his interest income will not be fair even in the eyes of law. NOIDA has deposited a sum of Rs 270.00/- crore against this demand under protest and has filed an appeal to stay the demand before the Asstt. Commissioner Income Tax NOIDA and further before Joint Commissioner of Income Tax Range-I NOIDA. 8. The Bank is not a judicial authority while the Income tax department has vast constitutional and legislative powers of determining total income of NOIDA under section 4 and. 5 of the Income tax act and to collect due tax under Chapter XVII. TDS is not charging provision. TDS deduction is debatable in view of the facts put up by NOIDA and the Payee is identified after such alleged lapse continuing since years, the Payee through its principal officer be asked to undergo the legal compliance of charge of tax, if any or its tax exemption status. 9. In our humble opinion the issue of TDS application the bank acted diligently, in the given circumstances, particularly when the payee is a State Government body and based on its claims made. The legal and beneficial owner of the income in this case is clearly established. Even the legal title and absolute ownership of the fixed deposits are with NOIDA.

10. In the circumstances the Appellant would request and urge you to please consider the aforesaid submissions on law and on facts and drop the proceedings against the Bank in view of our bonafide belief and honest opinion that TDS was not required to be made from the interest payment on fixed deposits by NOIDA as claimed. 11. The Appellate Bank is approaching NOIDA to have legal updates in the matter from the view point of NOIDA and in view of the fact as intimated by NOIDA that a sum of Rs. 270.00/crore has already been paid by NOIDA to the Income Tax Authorities. We request yon to stay future proceedings against the bank till appeals of NOIDA before Commissioner of Income Tax NOIDA and SLP filed in the Apex Court is finally disposed off.

Written argument will be filed at the time of Appeal hearing.

Signed (APPELLANT) Form of verification

I, Ajay Kumar Khosla, AGM , the appellant, do hereby declare that what is stated above is true to the best of my information and belief. Place: NOIDA Date: 06/03/2013

Signature Status of appellant