Ita/493/2014 Of Csir - National Aerospace Laboratories v. The Asst. Commissioner Of Income-Tax (Tds)

IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 14 DAY OF JULY 20271 PRESENT| THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’/BLE MR. JUSTICE HEMANT CHANDANGOUDARILT.A. NO.493 OF 2014 BETWEEN: CSIR - NATIONAL AEROSPACELABORATORIESP.B.NO.1779, HAL AIRPORT ROAD|BANGALORE-560017 REPRESENTED BY ITS.SR. CONTROLLER OF ADMINISTRATIONSRI. M.S. VIDYANATHAN AGED ABOUT 58 YEARS.S/O LATE S. SUBBAKRISHNA DIXIT..(BY MR. S. PARTHASARATHI, SR. COUNSEL A/WMS. JINITA CHATARJEE, ADV.,) ... APPELLAN| AND* THE ASST. COMMISSIONER OF.INCOME-TAX (TDS)CIRCLE-18(1), 4TH FLOORNO.59, HMT BHAVAN|BELLARY ROAD, BANGALORE-560032. ~. RESPONDENT (BY MR. K.V. ARAVIND, ADV.) THIS I.T.A. IS FILED UNDER SEC. J6O0-A OF INCOME TAXACT 1961, ARISING OUT OF ORDER DATED 27.08.2014 PASSEDIN ITA NOs.453 TO 456/BANG/2014 FOR THE ASSESSMENT YEAR-2010-11 & 2011-12, PRAYING TO: (1) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW,STATED ABOVE. (ii) ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE,ITAT DATED 27.08.2014 BEARING ITA NO.453 TO 456/BANG/2014.FOR THE ASSESSMENT YEARS 2ZOLO-1L1L AND JZOL1- THIS ILT.A. COMING ON FOR’ HEARING, THIS DAY, |ALOK ARADHE J.,DELIVERED THE FOLLOWING: | JUDGMENT This appeal under Section 260A of the Income TaxAct, 1961 (nereinafter referred to as the Act for short)nas been preferred by the assessee against order dated2/.08.2014passed by the Income Tax Appellate|Tribunal (hereinafter referred to as the tribunal forsnort). Tne subject matter of the appeal pertains to theAssessment years 2010-11 and 2011-12. The appealwas admitted by a bench of this Court on the following|substantial questions of law: (a)|Whether SI.No.1 of Tabple-1 of Rule3 of the IT Rules, 1962 would apply to tne|employees of the Appellant who Is one ofthe constituent units of the Council ofScientific|and|[IndustrialResearchestablished in 1962 by resolution of the| then|Centra]Legislative|Assembly,registeredUndertheRegistrationofSocieties Act of 1860? (D)Whether the appellant which|functions directly under the control of the|Ministry of Science and Technology of theGovernment of India and receiving annualgrants from the Government of India basedon budget proposal from the Ministry ofScience and Technology after approval ofthe Planning Commission anda wnen tneemployeesweregoverned|Dy theGovernment of India Pay and Allowance|Rules, Conduct Rules and other rules as\applicableiontheCentralGovernmentemployees, can valuation of perqguisite tosuch employees could be made witnout|applying S!I.No.1 of Table-1 of Rule 3 of tneIT Rules, 1962 and consequently whetner|the authorities were justified in holding thatthere was short deduction of tax at sourceunder Section 197 of the Act to consider the|Appellant as a defaulter to apply tneprovisions of Section 201(1) and 201(1A) ofthe Act? (Cc)If the answer to Question No.2|aboveISIn|affirmativeStil] Cdl)theappellant-institute be held to be a defaulter|to apply the provisions of Section 201(1) and 201(1A) of the Act of bonafide reasonor belief in interpretation of SI.No.1 ofTable-1 of Rule 3 of the IT Rules, 1962 rws|1/7(2) of the IT Act, 1961? 2.|For the reasons assigned by us in tnejudgment passed today in I.T.A.No.486/2014, the order|of the Income Tax Appellate Tribunal dated27.08.2014insofar as it pertains to initiation of proceedings underSection 201 and 201(1A) IS concerned is herebyquashed. In the result, appeal is disposed of. Sd/-JUDGE. SS| Sd/-—JUDGE.