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HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE

Commissioner of Income Tax (TDS), Kanpur and Anr. v. Canara Bank

Civil Appeal No. 6020 of 2018 / Civil Appeal No. 6064 of 2018 / Civil Appeal No. 6056 of 2018 / Civil Appeal No. 6058 of 2018 / Civil Appeal No. 6055 of 2018 / Civil Appeal No. 6060 of 2018 / Civil Appeal No. 6057 of 2018 / Civil Appeal No. 6054 of 2018 / Civil Appeal No. 6066 of 2018 / Civil Appeal No. 6065 of 2018 / Civil Appeal No. 6059 of 2018 / Civil Appeal No. 6053 of 2018 / Civil Appeal No. 6052 of 2018 / Civil Appeal No. 6051 of 2018 / Civil Appeal No. 6063 of 2018 / Civil Appeal No. 6062 of 2018 / Civil Appeal No. 6061 of 2018 / Civil Appeal No. 6023 of 2018 / Civil Appeal No. 6021 of 2018 / Civil Appeal No. 6031 of 2018 / Civil Appeal No. 6025 of 2018 / Civil Appeal No. 6022 of 2018 / Civil Appeal No. 6034 of 2018 / Civil Appeal No. 6027 of 2018 / Civil Appeal No. 6048 of 2018 / Civil Appeal No. 6026 of 2018 / Civil Appeal No. 6028 of 2018 / Civil Appeal No. 6032 of 2018 / Civil Appeal No. 6029 of 2018 / Civil Appeal No. 6036 of 2018 / Civil Appeal No. 6024 of 2018 / Civil Appeal No. 6033 of 2018 / Civil Appeal No. 6039 of 2018 / Civil Appeal No. 6038 of 2018 / Civil Appeal No. 6037 of 2018 / Civil Appeal No. 6046 of 2018 / Civil Appeal No. 6043 of 2018 / Civil Appeal No. 6040 of 2018 / Civil Appeal No. 6030 of 2018 / Civil Appeal No. 6045 of 2018 / Civil Appeal No. 6042 of 2018 / Civil Appeal No. 6041 of 2018 / Civil Appeal No. 6047 of 2018 / Civil Appeal No. 6049 of 2018 / Civil Appeal No. 6044 of 2018 / Civil Appeal No. 6035 of 2018 / Civil Appeal No. 6050 of 2018 / Civil Appeal No. 6069 of 2018 / Civil Appeal No. 6068 of 2018 / Civil Appeal No. 6067 of 2018 / Civil Appeal No. 6070 of 2018 / Civil Appeal No. 5378 of 2017 / Civil Appeal No. 5374 of 2017
[2018] 7 SCR 866 ·
194A(3)(iii)(f)

Reasoned final decisionRespondent banks / payers on section 194A withholding
Download AKHB noteFive-part research note
Sources & disclosures includedDownload original judgment / order

Two-judge bench · A. K. Sikri, J. · Ashok Bhushan, J.

01 · Facts of the case

Canara Bank paid NOIDA interest of Rs. 20.10 crore on fixed deposits/deposits for financial year 2005-06 without deducting tax under section 194A. After NOIDA's separate local-authority writ petition failed, the Assessing Officer passed an order under sections 201(1) and 201(1A) read with section 194A on 28 February 2013, treated the bank as in default and raised a demand; penalty proceedings were separately initiated. The Commissioner (Appeals) set aside the order on 2 December 2013 on the strength of the 1970 notification. The Tribunal and Allahabad High Court upheld that result, and Revenue appealed (paragraphs 2-6).

Source: reported judgment / paragraphs 2-6 / PDF pages 4, 5, 6 / judicial text

02 · Discussion by the Hon’ble Court

Revenue's objection was that the notification used established by a Central, State or Provincial Act, while NOIDA was constituted by a notification under the 1976 Act. It was not disputed that NOIDA was a statutory corporation. The Court examined the particular statutory and notification language rather than whether NOIDA was a local authority under section 10(20) (paragraphs 6-11 and 15).

The Court distinguished a corporation owing its existence to legislation from a company, society or other body formed by private acts and merely incorporated or governed under general legislation. It read the words in context, including the varied use of by or under in neighbouring section 194A clauses. The cited cases, especially Dalco Engineering, explained that a statute may itself establish a corporation or provide the mechanism for its establishment by notification; the inquiry includes whether the entity owes its existence to that enactment (paragraphs 12-27).

The 1976 Act itself provided for creation of the authority, declared it a body corporate and prescribed its composition. The Court compared section 3 with the State Financial Corporations Act mechanism and held that NOIDA was established by the 1976 Act and covered by the 1970 notification. It did not announce that all companies registered under legislation qualify, or that by and under are interchangeable in every legal context (paragraphs 28-31).

Source: reported judgment / paragraphs 7-31 / PDF pages 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 / judicial text

03 · Judicial decision

NOIDA fell within the corporation category in the notification of 22 October 1970, so the interest payments considered were outside section 194A(1) withholding. The High Court had committed no error in dismissing Revenue's appeal. All appeals in the batch were dismissed (paragraphs 31-32).

Source: reported judgment / paragraphs 31-32 / PDF pages 22 / judicial text

04 · Outcome / in whose favour

In whose favour: Respondent banks / payers on section 194A withholding

All 53 numbered appeals in the reported jurisdiction list dismissed

Final affirmation of the historical notification-based exemption from deduction of tax at source

This is relief from withholding, not a holding that NOIDA's interest income is exempt from income tax. The report mentions separately initiated penalty proceedings but supplies no separate penalty adjudication. It does not list individualized companion-appeal periods or decide qualification of every statutory or incorporated body.

Source: reported judgment / paragraphs 4-6, 31-32 / PDF pages 5, 6, 22 / judicial text

05 · AKHB REVIEW POINT

Distinguish the recipient's substantive income-tax exemption from the payer's duty to withhold. A failed section 10(20) claim does not defeat an independently available section 194A notification exception. Conversely, this TDS result does not make the recipient's income exempt.

For another authority, inspect its constituting statute, notification, legal origin and composition, and the precise exception applicable to the payment date. Merely being incorporated under a general Act is not the rule adopted. The same-day NOIDA lease decision expressly applies Canara Bank to the interest component, while retaining TDS on annual lease rent under section 194-I.

Source: reported judgment / paragraphs 6, 11, 19-27, 31-32 / PDF pages 6, 9, 14, 15, 16, 17, 18, 22 / judicial text; reported judgment / paragraphs 12-16 / PDF pages 7, 8, 9 / judicial text

Detailed disposition and connected groups

issue results
  • issue
    NOIDA as a corporation established by a State Act
    result
    Covered by clause (i) of the 22 October 1970 notification under section 194A(3)(iii)(f)
    in whose favour
    Respondent banks / payers
    pinpoints
    • source url
      Open cited source
      pdf pages
      18; 19; 20; 21; 22
      paragraphs
      27-32
      source role
      judicial text
  • issue
    Revenue's by-versus-under distinction
    result
    Rejected for NOIDA under the 1976 Act and this notification; statutory constitution through notification sufficed
    in whose favour
    Respondent banks / payers
    pinpoints
    • source url
      Open cited source
      pdf pages
      14; 16; 17; 18; 20; 22
      paragraphs
      18-19, 23-31
      source role
      judicial text
  • issue
    Local-authority income exemption
    result
    Separate issue; the earlier local-authority decision did not decide corporation status for this withholding exception
    in whose favour
    Not decided here
    pinpoints
  • issue
    Separate penalty proceedings
    result
    Mentioned as initiated; no separate merits or operative penalty order stated
    in whose favour
    Not separately adjudicated
    pinpoints

Additional statutory context, not separate holdings

194A(1); 194A(3)(iii)(b); 194A(3)(iii)(c); 194A(3)(iii)(d); 201(1); 201(1A); 156; 260A; 10(20)

Other provisions considered

Uttar Pradesh Industrial Area Development Act, 1976, sections 2(b), 3; State Financial Corporations Act, 1951, sections 2(b), 3 (comparison); Constitution of India, Article 12 (discussion of cited cases)

Financial years identified

2005-06

Judicial authorship and separate opinions

Ashok Bhushan, J.

Act identified in the reviewed source

Income-tax Act, 1961

Verified relationships between specified judgments

  • source case id
    sc-2018-07-02-noida-cit-appeals-lease-tds
    target case id
    sc-2018-07-02-canara-bank-noida-interest-tds
    relationship
    Expressly applies Canara Bank for section 194A notification exception
    evidence
    scope limit
    Interest withholding exception; not substantive income exemption or section 194-I rent exemption.
  • source case id
    sc-2018-07-02-noida-ccit-local-authority
    target case id
    sc-2018-07-02-canara-bank-noida-interest-tds
    relationship
    Expressly leaves banker/TDS questions to separate same-day Canara Bank decision
    evidence
    scope limit
    Different provisions and appeals maintained as distinct judgments; neither overrules the other.

Source & verification

Download original judgment / order · Open cited source rendition

Identified source rendition: 22 PDF pages; SHA-256 24645a2e52540d171a678938d6eb5f1b6969c0a36deb801c9fd341f530c30e48. Original bytes preserved. Judgment paragraphs 1-32 on physical PDF pages 4-22; preceding text is reported title, editorial headnote, case references or appearances. No adjacent judgment is included.

  • Paragraph 3 identifies financial year 2005-06 for the Canara Bank facts. It does not separately label an assessment year or give the periods for every companion appeal; no assessment year is inferred.
  • The report supplies Civil Appeal No. 6020 of 2018 and the full companion list on physical page 4. Paragraph 2 retains a blank appeal number for lead SLP (C) No. 3168 of 2017. There are 53 numbered appeals in the report's jurisdiction list.
  • The Court reproduced the section 194A scheme and 22 October 1970 notification, whose clause (i) covers a corporation established by a Central, State or Provincial Act. It applied those instruments to the historical payments before it. No independent current notification-validity or amendment audit is represented.
  • The operative exception to withholding is section 194A(3)(iii)(f) read with notification S.O. 3489, No. 170 (F.No.12/164/68-ITCC/ITJ), dated 22 October 1970, clause (i). Section 10(20) local-authority status is distinct procedural background, not the basis of this TDS result.
  • The source is the unchanged eSCR reported rendition supplied through the indexed public mirror, not a separately retrieved signed original; no signed-original hash is claimed.; Editorial headnotes and case-reference tables are not treated as the Court's reasons. Physical PDF pages and numbered judicial paragraphs are separately identified.; The public URLs identify the exact cached, hash-verified PDFs. A fresh web-tool open failed during this review; current network availability is not certified.; The three same-date judgments have different dockets, texts and dispositions. They are linked only where actual judicial passages support the relationship.; The State notification date is internally inconsistent: paragraphs 3 and 8 say 17 April 1976, whereas paragraph 30 says 12 April 1976. This note relies on statutory constitution and does not silently adjudicate the date.; Paragraph 18 once prints 2 October 1970; the full notification in paragraph 11 and decisive paragraph 31 identify 22 October 1970. The date is taken from the full reproduction, not the isolated slip.; The statutory and quoted precedent text is historical. The original Gazette instrument and current amendments were not independently retrieved.; The report's full companion docket list controls the disposition group; the blank lead number retained in paragraph 2 is not converted into a different proceeding.

Statutory scope

Historical 1961 Act provisions and instruments only. Verify the applicable year, later amendments and notifications independently. No automatic mapping or precedent carryover to the Income-tax Act, 2025.

Later treatment

Source checked 2026-10-04. Expressly identified relationships among three separate decisions of 2 July 2018 are checked against their complete bounded judicial texts. No subsequent-treatment or comprehensive current-law audit has been performed.

Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.

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