1 REPORTABLE IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.6020 OF 2018 (ARISING OUT OF SLP (C) NO. 3168 OF 2017) COMMISSIONER OF INCOME TAX(TDS) APPELLANTS KANPUR AND ANR. VERSUS CANARA BANK ... RESPONDENT WITH C.A.NO.6064 of 2018 @ SLP(C)No.9295/2017, C.A.NO.6056 of 2018 2018 @ SLP (C)No.3162/2017, C.A.NO.6058 of 2018 @ SLP(C)No.9292/2017, C.A.NO.6055 of 2018 @ SLP(C)No.3163/2017, C.A.NO.6060 of 2018 @ SLP(C)No.9294/2017, C.A.NO.6057of 2018 @ SLP(C) No. 9288/2017, C.A.NO.6054 2018 @ SLP(C) No. 3169/2017, C.A.NO.6066 of 2018 @ SLP(C)No.9290/2017, C.A.NO.6065 2018 @ SLP(C) No.9296/2017, C.A.NO.6059 2018 @ SLP(C) No. 9293/2017, C.A.NO.6053 of 2018 @ SLP(C) No. 3165/2017, C.A.NO.6052 of Signature Not Verified Digitally signed by ASHWANI KUMAR Date: 2018.07.07 2018@SLP(C)No.9289/2017,C.A.NO.6051of 2018 @ SLP(C) No. 11:52:30 IST Reason: 3167/2017, C.A.NO. 6063 of 2018 @ SLP(C) No. 9291/2017, 2 C.A.NO.6062 of 2018 @ SLP(C) No. 9297/2017, C.A.NO.6061 of 2018 @ SLP(C)No.6728/2017, C.A.NO.6023 of 2018 @ SLP (C) No. 33260/2016, C.A. No. 5378/2017, C.A. No. 5374/2017, C.A.NO. 6021 of 2018 @ SLP(C) No. 33262/2016, C.A.NO.6031 of 2018 @ SLP(C)No.34529/2016, C.A.NO.6025of 2018 @ SLP(C) No. 34520/2016, C.A.NO.6022 of 2018 @ SLP(C) No. 33261/2016, C.A.NO.6034 of 2018 @ SLP(C) No. 34532/2016, C.A.NO.6027 of 2018 @ SLP(C) No. 34526/2016, C.A.NO.6048 of 2018 @ SLP(C)No.36199/2016,C.A.NO.6026 of 2018 @ SLP(C) No. 34522/2016, C.A.NO.6028 of 2018 @ SLP(C) No. 34525/2016, C.A.NO.6032 of 2018 @ SLP(C) No. 34530/2016, C.A.NO.6029 of 2018 @ SLP(C) No. 34528/2016, C.A.NO.6036 of 2018 @ SLP(C) No. 35082/2016, C.A.NO.6024 of 2018 @ SLP(C) No. 34521/2016, C.A.NO.6033 of 2018 @ SLP(C) No. 34531/2016, C.A.NO.6039 of 2018 @ SLP(C) No. 35083/2016, C.A.NO.6038 of 2018 @ SLP(C) No. 35435/2016, C.A.NO.6037 of 2018 @ SLP(C) No. 35084/2016, C.A.NO.6046 of 2018 @ SLP(C) No. 36198/2016, C.A.NO.6043 of 2018 @ SLP(C) No. 35439/2016, C.A.NO.6040 of 2018 @ SLP(C) No. 35437/2016, C.A.NO.6030 of 2018 @ SLP(C) No. 34527/2016, C.A.NO.6045 of 2018 @ SLP(C) No. 36158/2016, C.A.NO.6042 of 2018 @ SLP(C) No. 35438/2016, C.A.NO.6041 if 2018 @ SLP(C) No. 35436/2016, C.A.NO..6047 of 2018 @ SLP(C) No. 36200/2016, C.A.NO.6049 of 2018 @ SLP(C) No. 37683/2016, C.A.NO.6044 of 3 2018 @ SLP(C) No. 35440/2016, C.A.NO. 6035 of 2018 @ SLP(C) No. 34533/2016, C.A.NO.6050 of 2018 @ SLP(C) No. 37681/2016, C.A.NO.6069 of 2018 @ SLP NO.16438 of 2018 @ Diary No(s). 9866/2017, C.A.NO.6068 of 2018 @ SLP(C) No. 8116/2018, C.A.NO.6067 of 2018 @ SLP(C) No. 26496/2017, C.A.NO.6070 of 2018 @ SLP NO.16439 of 2018 @ Diary No(s). 14969/2017. J U D G M E N T ASHOK BHUSHAN, J. Leave granted. 2. These appeals question Division Bench judgment dated 04.04.2016 of Allahabad High Court, by which judgment Income Tax Appeals filed by Revenue has been dismissed affirming order of Income Tax Appellate Tribunal. common questions of facts and law are involved in these appeals and it is sufficient to refer facts and pleadings in Civil Appeal No.... 2018 arising out of SLP(C) 3168 of 2017, Commissioner of Income Tax(TDS), Kanpur and Anr. vs. Canara Bank wherein judgment of High Court dated 04.04.2016 in ITA No. 64 of 2016 has been questioned. 4 3. New Okhla Industrial Development Authority (NOIDA), hereinafter referred to as Authority has been constituted by Notification dated 17.04.1976 issued under Section 3 of Uttar Pradesh Industrial Area Development Act, 1976 hereinafter referred to as 1976 Act . Canara Bank, respondent No. 3 is banker of Authority. respondent Bank made payment of Rupees Twenty Crores Ten Lakhs as interest to Authority in form of FDs/Deposits for financial year 2005 06. Canara Bank, however, did not deduct tax at source under Section 194A of Income Tax Act, 1961 hereinafter referred to as IT Act, 1961 . 4. Notices were issued by appellant to Canara Bank asking for information pertaining to interest paid to Authority on its deposits. Notices were also issued by appellant to Bank for showing cause for not deducting tax at source. writ petition had been filed by NOIDA being Writ Petition No.1338/2005 challenging notices issued to Authority as well as its bankers. Assessment proceeding could not proceed due to certain interim directions passed by High Court in above writ petition. writ petition was ultimately dismissed by High Court on 28.02.2011 holding that Authority is not local authority within meaning 5 of Section 10(20) of IT Act, 1961 and its income is not exempt from tax. Assessing Officer thereafter proceeded to pass order under Section 201(1)/201(1A) read with Section 194A of IT Act, 1961 dated 28.02.2013. 5. Income Tax Authority held that respondent Bank is assessee in default. default was computed and demand notice as per Section 156 of IT Act, 1961 was issued. Penalty proceeding was also separately initiated. Canara Bank aggrieved by order of Assessing Officer dated 28.02.2013 filed appeal before Commissioner of Income Tax (Appeals). Before Commissioner, bank relied on Notification dated 22.10.1970 issued under Section 194A(3) (iii)(f) of IT Act, 1961. Appellate Authority vide its judgment dated 02.12.2013 allowed appeal setting aside order of Assessing Officer. Revenue aggrieved by judgment of Appellate Authority filed appeal before Income Tax Appellate Tribunal. Tribunal also held that payment of interests by banks to State Industrial Development Authority does not require any deduction at source in terms of Section 194A(3)(iii)(f). 6. Revenue aggrieved by order of Tribunal filed appeal under Section 260A of Act before High Court. 6 Division Bench of High Court vide its judgment dated 04.04.2016 has dismissed appeal. Division Bench came to following conclusions while dismissing appeal: "We have, therefore, no manner of doubt from reading of provisions of Industrial Area Development Act that NOIDA has been constituted by State Act and, therefore, entitled to exemption of payment of tax at source under section 194 A(1) of Act. decision of Division Bench of this Court in New Okhla Industrial Development Authority (supra), on which reliance has been placed by learned counsel for appellants, would, therefore, not come to aid of appellants as it was restricted to issue as to whether NOIDA would be local authority or not and did not deal with issue involved in this appeal as to whether NOIDA is Corporation established by State Act. We therefore, answer question of law framed by us in negative and hold that NOIDA is Corporation established by Uttar Pradesh Industrial Area Development Act, 1976. 7. Shri K. Radhakrishnan, learned senior advocate appearing for appellants challenging Division Bench judgment of High Court contends that Authority is not entitled for benefit of Notification dated 22.10.1970 issued under Section 194A (3)(iii)(f). It is submitted that under above notification only Corporation established by Central, State or Provincial Act is entitled for benefit. Authority is not Corporation established by State Act rather 7 Authority is Corporation which is established under 1976 Act. He submitted that there is vast difference between body established by Act and body established under Act. provisions of Section 194A have to be strictly construed and benefit can be extended only when body falls expressly within benefit of exemption. In exceptions carved out under Section 194A(3) there is homogeneity in group. legislature when used word with limitation same has to be read in entire phrase and only such corporations are entitled for exemption which are established by Central, State or Provincial Act. It is submitted that words have to be construed, in accordance with intention and use of word as per Notification dated 22.10.1970, normally indicate that for purposes of claiming exemption corporation has to be established by Central, State or Provincial Act. corporations established under Act fall in different category and are not entitled for exemption. He has submitted that CIT Appeals, Income Tax Tribunal as well as High Court erred in not correctly construing Notification dated 22.10.1970 and had wrongly extended benefit under Section 194(3)(iii)(f). 8. Learned senior counsel appearing for different banks have refuted above submissions of learned senior counsel 8 for appellants. It is submitted that Section 3 of 1976 Act provides that State Government may by notification, constitute for purpose of this Act, authority to be called (Name of area) Industrial Development Authority, for any Industrial Development Area . It is submitted that Authority is established under 1976 Act. Referring to provisions of State Bank of India Act, 1955, Life Insurance Corporation of India Act, 1956, it is submitted that statute provides for establishing of corporation by virtue of notification by Central Government. It is submitted that in similar manners Authority has been established by issuing notification, hence, Authority has to be treated as established by 1976 Act. Alternatively, it is submitted that legislature has used words by and under interchangeably which is clear from provisions of Section 194A(3)(iii)(c) and Section 194A((3)(iii)(d). In Section 194A(3)(iii), itself differentiation in by and under has been done away, with that Authority established by 1976 Act is clearly covered by Notification dated 22.10.1970. Notification dated 17.04.1976 establishing Authority fulfills mandate of by hence it is clearly entitled for benefit of Section 194A(3)(iii). 9 9. Learned counsel for parties have placed reliance on various judgments of this Court, which shall be referred to while considering submissions in detail. 10. We have considered submissions of learned counsel for parties and perused record. Present set of appeals relates to Section 194A of IT Act, 1961. It is useful to extract provisions of 194A which is to following effect: "194A. Interest other than Interest on securities . (1) Any person, not being individual or Hindu undivided family, who is responsible for paying to resident any income by way of interest other than income [by way of interest on securities], shall at time of credit of such income to account of payee or at time of payment thereof in cash or by issue of cheque or draft or by any other mode, whichever is earlier, deduct income tax thereon at rates in force: [Provided that individual or Hindu undivided family, whose total sales, gross receipts or turnover from business or profession carried on by him exceed monetary limits specified under clause (a) or clause (b) of section 44AB during financial year immediately preceding financial year in which such interest is credited or paid, shall be liable to deduct income tax under this section.] [Explanation. For purposes of this section, where any income by way of interest as aforesaid is credited to any account, 10 whether called Interest payable account or Suspense account or by any other name, in books of account of person liable to pay such income, such crediting shall be deemed to be credit of such income to account of payee and provisions of this section shall apply accordingly.] (2)[***] (3) provisions of sub section (1) shall not apply (i).... 5[***] (iii) to such income credited or paid to (a) any banking company to which Banking Regulation Act, 1949 (10 of 1949), applies, or any co operative society engaged in carrying on business of banking (including co operative land mortgage bank), or (b) any financial corporation established by or under Central, State or Provincial Act, or (c) Life Insurance Corporation of India established under Life Insurance Corporation Act, 1956 (31 of 1956), or (d) Unit Trust of India established under Unit Trust of India Act, 1963 (52 of 1963), or (e) any company or co operative society carrying on business of insurance, or (f) such other institution, association or body [or class of institutions, 11 associations or bodies] which Central Government may, for reasons to be recorded in writing, notify in this behalf in Official Gazette; 11. In present case notification on which reliance has been placed by respondent is Notification dated 22.10.1970 issued under Section 194A(3)(iii)(f), hence, it is necessary to refer to entire Notification dated 22.10.1970 which is to following effect: "Notification No. S.O. 3489 [No. 170 (F.No.12/164/68 ITCC/ITJ).], Dated 22.10.1970 In pursuance of sub clause(f) of clause (iii) of sub section (3) of section 194A of Income Tax Act, 1961 (43 of 1961), Central Government hereby notify following for purposes of said sub clause: (i)any corporation established by Central, State or Provincial Act; (ii) any company in which all shares are held (whether singly or taken together) by Government or Reserve Bank of India or Corporation owned by that Bank; and (iii) any undertaking or body, including society registered under Societies Registration Act, 1860 (21 of 1860), financed wholly by Government. 12. Before we proceed to examine rival contentions of parties, it is necessary to ascertain concept of Corporation. Corporation is artificial being which is 12 legal person. It is body/corporate established by Act of Parliament or Royal Charter. It possesses properties and rights which are conferred by Charter constituting it expressly or incidentally. Halsbury's Laws of England Fifth Edition, Vol. 24 defines Corporation as follows: 301. Corporations and unincorporated associations. corporation may be defined as body of persons (in case of corporation aggregate) or office (in case of corporation sole) which is recognised by law as having personality which is distinct from separate personalities of members of body or personality of individual holder for time being of office in question. There are many associations and bodies of persons which are not corporations. Unincorporated associations do not have legal personality, may not sue or be sued in their own name nor (unless their purposes are charitable) may property be held for their purposes otherwise than by virtue of contract between members for time being. 13. Corporation aggregate , has further been defined by Halsbury's Laws of England, Fifth Edition, Vol. 24 to following effect: "312. Meaning of 'Corporation aggregate'. corporation aggregate has been defined as collection of individuals united into one body under special denomination, having perpetual succession under artificial form, and vested by policy of law with capacity of acting in several respects as individual, particularly of taking and granting property, of contracting obligations and of 13 suing and being sued, of enjoying privileges and immunities in common and of exercising variety of political rights, more or less extensive, according to design of its institution, or powers conferred on it, either at time of its creation or at any subsequent period of its existence. 14. This Court in S.S. Dhanoa vs. Municipal Corporation, Delhi and Others (1981) 3 SCC 431 had elaborately considered concept of Corporation. This Court referred and relied definition of Corporation as given by Chief Justice Marshall in celebrated case of Dartmouth College v. Woodward, NH 4 Wheat 518, 636:4 L Ed 629. It is useful to extract paragraph Nos. 8 and 9 of judgment which are as follows: 8. corporation is artificial being created by law having legal entity entirely separate and distinct from individuals who compose it with capacity of continuous existence and succession, notwithstanding changes in its membership. In addition, it possesses capacity as such legal entity of taking, holding and conveying property, entering into contracts, suing and being sued, and exercising such other powers and privileges as may be conferred on it by law of its creation just as natural person may. following definition of corporation was given by Chief Justice Marshall in celebrated Dartmouth College case: corporation is artificial being, invisible, intangible, and existing only in contemplation of law. Being mere creature of law, it possesses only those properties which charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed best 14 calculated to effect object for which it was created. Among most important are immortality, and, if expression may be allowed, individuality; properties, by which perpetual succession of many persons are considered as same, and may act as single individual. They enable corporation to manage its own affairs, and to hold property, without perplexing intricacies, hazardous and endless necessity, of perpetual conveyances for purpose of transmitting it from hand to hand. It is chiefly for purpose of clothing bodies of men, in succession, with these qualities and capacities, that corporations were invented, and are in use. By these means, perpetual succession of individuals are capable of acting for promotion of particular object, like one immortal being. term corporation is, therefore, wide enough to include private corporations. But, in context of clause Twelfth of Section 21 of Indian Penal Code, expression corporation must be given narrow legal connotation. 9. Corporation, in its widest sense, may mean any association of individuals entitled to act as individual. But that certainly is not sense in which it is used here. Corporation established by or under Act of Legislature can only mean body corporate which owes its existence, and not merely its corporate status, to Act. For example, Municipality, Zilla Parishad or Gram Panchayat owes its existence and status to Act of Legislature. On other hand, association of persons constituting themselves into company under Companies Act or society under Societies Registration Act owes its existence not to Act of Legislature but to acts of parties though, it may owe its status as body corporate to Act of Legislature. 15. Before us, there is no issue that Authority is not 15 Corporation. It is also not contended before us that Authority is not statutory corporation. What is contended before us is that Authority having not been established by Central, State or Provincial Act is not covered by Notification dated 22.10.1970 hence, not eligible for benefit. provision of Section 194A and notification issued by Central Government under 194A(3)(iii)(f) falls for consideration. We may beneficially notice principle of statutory interpretation which needs to be applied while interpreting above provisions of IT Act, 1961. This Court in RBI vs Peerless General Finance & Investment Co. Ltd., (1987) 1 SCC 424, laid down following in paragraph No. 33: 33. Interpretation must depend on text and context. They are bases of interpretation. One may well say if text is texture, context is what gives colour. Neither can be ignored. Both are important. That interpretation is best which makes textual interpretation match contextual. statute is best interpreted when we know why it was enacted. With this knowledge, statute must be read, first as whole and then section by section, clause by clause, phrase by phrase and word by word. If statute is looked at, in context of its enactment, with glasses of statute maker, provided by such context, its scheme, sections, clauses, phrases and words may take colour and appear different than when statute is looked at without glasses provided by context. With these glasses we must look at Act as whole and 16 discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into scheme of entire Act. No part of statute and no word of statute can be construed in isolation. Statutes have to be construed so that every word has place and everything is in its place. It is by looking at definition as whole in setting of entire Act and by reference to what preceded enactment and reasons for it that Court construed expression Prize Chit in Srinivasa and we find no reason to depart from Court s construction. 16. Constitution Bench of this Court in Sukhdev Singh and Others vs. Bhagatram Sardar Singh Raghuvanshi and Another, (1975) 1 SCC 421 had occasion to consider nature and character of Corporation including its early history. Justice Mathew, delivering his concurrent opinion noted that Corporations in 17th, 18th and 19th Centuries were far more like bodies corporate we call public authorities today. In paragraph Nos. 83, 86 and 87 following has been laid down: 83. chartered corporations of 17th, 18th and 19th centuries were expected, perhaps required, to perform stated duties to community like running ferry, founding colony or establishing East Indian trade. Performance of these functions and securing whatever revenue enterprise made to Crown were primary reasons why charter was granted. Corporations in early English law were in fact, and in legal cognizance, device by which political State got something done. They were far more like bodies corporate we call public authorities today. Few in 17th or 18th century would 17 have disputed that such corporation was agency of State. 86. public corporation, therefore, became third arm of Government. In Great Britain, conduct of basic industries through giant corporations is now permanent feature of public life. 87. public corporation is legal entity established normally by Parliament and always under legal authority, usually in form of special statute, charged with duty of carrying out specified governmental functions in national interest, those functions being confined to comparatively restricted field, and subjected to control by Executive, while corporation remains juristically independent entity not directly responsible to Parliament. public corporation is not generally multipurpose authority but functional organisation created for specific purpose. It has generally no shares or shareholders. Its responsibility generally is to Government. Its administration is in hands of Board appointed by competent Minister. employees of public corporation are not civil servants. It is, in fact, likely that in due course special type of training for specialized form of public service will be developed and status of personnel of public corporation may more and more closely approximate to that of civil service without forming part of it. Insofar as public corporations fulfil public tasks on behalf of Government, they are public authorities and as such subject to control by Government. 17. One more principle which was reiterated by this Court in above Constitution Bench judgment is that Corporations which 18 are instrumentalities of Government are subject to limitation as contained in Constitution. Corporations which were under consideration in above case, namely, Life Insurance Corporation of India, Oil and Natural Gas Commission, Industrial Finance Corporation were held to be constituted within meaning of Article 12 of Constitution. Two categories of Corporations have been noticed i.e. statutory corporations and non statutory corporations. Whereas, statutory corporations owe their existence from by or under statute, non statutory bodies and corporations are not created by or under statute rather are governed by statute. ESTABLISHED BY CENTRAL, STATE OR PROVINCIAL ACT 18. appellant on one hand submits that Authority has not been established by 1976 Act rather it has been established under 1976 Act, hence it is not covered by Notification dated 22.10.1970 whereas respondent submits that Authority has been established by 1976 Act hence, it fulfills condition as enumerated under Notification dated 2.10.1970. Alternatively, it is submitted that words by and under have been interchangeably used in IT Act, 1961 and there is no difference, even if, Authority is established 19 under 1976 Act. 19. Section 194A(3)(iii) clauses (b), (c) and (d) refer to expression established . In sub clause (b) expression used is established by or under Central, State or Provincial Act , in sub clause (c) expression used is established under Life Insurance Corporation Act and in sub clause (d) expression used is established under Unit Trust of India Act . Section thus uses both expressions by or under . expression established by or under Act have come for consideration before this Court on several occasions. In this context, it shall be useful to refer to few judgments of this Court. In Sukhdev Singh (supra), Court had occasion to consider status of company incorporated under Companies Act. Court held that Company incorporated is not Company created by Companies Act. In paragraph No. 25 following was held: 25 company incorporated under Companies Act is not created by Companies Act but comes into existence in accordance with provisions of Act. It is not statutory body because it is not created by statute. It is body created in accordance with provisions of statute. 20. Mathew J., writing concurrent opinion while discussing 20 public corporation held that such corporations are created by State. In Executive Committee of Vaish Degree College, Shamli and Others vs. Lakshmi Narain and Others, (1976) 2 SCC 58, question for consideration fell as to whether Executive Committee of degree college is statutory body. Contention before Court was that Executive Committee was statutory body since it was affiliated to Agra University which was established by statute. Executive Committee was further covered by statute framed by Agra University. In above context, this Court held that there is clear distinction between body which is created by Statute and body which having been come into existence is governed in accordance with provisions of statute. In paragraph No. 10 following was held: 10..........It is, therefore, clear that there is well marked distinction between body which is created by statute and body which after having come into existence is governed in accordance with provisions of statute. In other words position seems to be that institution concerned must owe its very existence to statute which would be fountainhead of its powers. question in such cases to be asked is, if there is no statute would institution have any legal existence. If answer is in negative, then undoubtedly it is statutory body, but if institution has separate existence of its own without any reference to statute concerned but is merely governed by statutory provisions it cannot be said to be 21 statutory body.......... 21. Again in S.S.Dhanoa (supra), this Court had occasion to consider Registered Society which was body/corporate. question was as to whether State Body /corporate is Corporation within meaning of Clause Twelfth of Section 21 of IPC (Indian Penal Code). This Court again held that expression Corporation means Corporation created by legislature. In paragraph No. 7 following was held: 7 In our opinion, expression corporation must, in context, mean corporation created by legislature and not body or society brought into existence by act of group of individuals. cooperative society is, therefore, not corporation established by or under Act of Central or State Legislature. 22. Further noticing distinction between Corporation established by or under Act or body created by or under Act, following was held in paragraph No. 10: 10. There is distinction between corporation established by or under Act and body incorporated under Act. distinction was brought out by this Court in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi. It was observed: [SCC p. 435: SCC (L&S) p. 115, para 25] company incorporated under Companies Act is not created by Companies Act but comes into existence in accordance with provisions of 22 Act. There is thus well marked distinction between body created by statute and body which, after coming into existence, is governed in accordance with provisions of statute.......... 23. Another judgment which had occasion to consider expression established by or under Act is judgment of this Court in Dalco Engineering Private Limited vs. Satish Prabhakar Padhye and Others (2010) 4 SCC 378. Court had occasion to examine provision of Section 2k, of Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995, specifically expression establishment means Corporation established by or under Central, Provincial or State Act. This Court held that phrase established by or under Act is standard term used in several enactments to denote statutory corporation established or brought into existence by or under statute. On Company it was held that company is not established under Companies Act and incorporated company does not owe its existence to Companies Act. In paragraph No. 20 following has been laid down: 20. company is not established under Companies Act. incorporated company does not owe its existence to Companies Act. incorporated company is formed by 23 act of any seven or more persons (or two or more persons for private company) associated for any lawful purpose subscribing their names to memorandum of association and by complying with requirements of Companies Act in respect of registration. Therefore, company is incorporated and registered under Companies Act and not established under Companies Act. Per contra, Companies Act itself establishes National Company Law Tribunal and National Company Law Appellate Tribunal, and these two statutory authorities owe their existence to Companies Act. 24. This Court further elaborating expression held that when expression used is established by or under Act , emphasize should be on word established in addition to words by or under . It is useful to refer to what has been said in paragraph Nos. 21 and 22 of judgment which is to following effect: 21. Where definition of establishment uses term corporation established by or under Act , emphasis should be on word established in addition to words by or under . word established refers to coming into existence by virtue of enactment. It does not refer to company, which, when it comes into existence, is governed in accordance with provisions of Companies Act. But then, what is difference between established by Central Act and established under Central Act ? 22. difference is best explained by some illustrations. corporation is established by Act, where Act itself establishes 24 corporation. For example, Section 3 of State Bank of India Act, 1955 provides that bank to be called State Bank of India shall be constituted to carry on business of banking. Section 3 of Life Insurance Corporation Act, 1956 provides that 3. Establishment and incorporation of Life Insurance Corporation of India. (1) With effect from such date as Central Government may, by notification in Official Gazette, appoint, there shall be established Corporation called Life Insurance Corporation of India. State Bank of India and Life Insurance Corporation of India are two examples of corporations established by Central Act . 25. This Court has also referred to provisions of State Financial Corporations Act, 1951 which provides for establishment of various financial corporations under Act. It is useful to refer to definition of financial corporation as contained in Section 2(b) which is to following effect: 2(b) Financial Corporation means Financial Corporation established under Section 3 and includes Joint Financial Corporation established under Section 3A; 26. Section 3 deals with establishment of State Financial Corporation which provides as follows: 3. Establishment of State Financial Corporations.: (1) State Government may, by notification in Official Gazette, establish Financial Corporation for State under 25 such name as may be specified in notification. (2) Financial Corporation shall be body corporate by name notified under sub section (1), having perpetual succession and common seal, with power, subject to provisions of this Act, to [acquire, hold and dispose of] property and shall by said name sue and be sued. 27. This Court clearly in above case, Dalco Engineering (supra) has held that such Financial Corporations are established by Act or under Act. In paragraph No. 23 of judgment following has been held: 23. We may next refer to State Financial Corporations Act, 1951 which provides for establishment of various financial corporations under that Act. Section 3 of that Act relates to establishment of State Financial Corporations and provides that State Government may, by notification in Official Gazette, establish financial corporation for State under such name as may be specified in notification and such financial corporation shall be body corporate by name notified. Thus, State Financial Corporation is established under Central Act. Therefore, when words by and under Act are preceded by words established , it is clear that reference is to corporation established, that it is brought into existence, by Act or under Act. In short, term refers to statutory corporation as contrasted from non statutory corporation incorporated or registered under Companies Act. 28. Now, we revert back to provisions of 1976, Act. 26 very preamble of that Act reads Act to provide for Constitution of Authority for development of certain areas in State into industrial and urban township and for masses connected through with . 29. Thus, Act itself provides for constitution of authority. Section 2(b) of 1976 Act defines Authority as authority constituted under Section 3 of Act. Section 3 which is very relevant for present case is as follows: 3. (1) State Government may, by notification, constitute for purposes of this Act, authority to be called (Name of area) Industrial Development Authority, for any industrial development area. (2) Authority shall be body corporate. (3) Authority shall consist of following : (a) Secretary to Member Government, Uttar Pradesh, Industries Department Chairman or his Nominee not below rank of Joint Secretary ex official. (b) Secretary to Member Government, Uttar Pradesh, Public works Department or his nominee not below rank of Joint Secretary ex official. (c) Secretary to Member Government, Uttar Pradesh, 27 Local Self Government or his nominee not below rank of joint Secretary ex official. (d) Secretary to Government, Uttar Pradesh, Member Finance Member Department or his nominee not below rank of Joint Secretary ex official. (e) Managing Director, U.P. State Industrial Member Development Corporation ex official. (f) Five members to be nominated Member by State Government by notification. (g) Chief Executive Officer. Member Secretary (4) headquarters of Authority shall be at such place as may be notified by State Government. (5) procedure for conduct of meetings for Authority shall be such as may be prescribed. (6) No act or proceedings of Authority shall be invalid by reason of existence of any vacancy in or defect in constitution of Authority. 30. When we compare provisions of Section 3 of 1976 Act with those of State Financial Corporations Act, 1951, it is clear that establishment of Corporation in both enactments is by notification by State Government. In 28 present case, notification has been issued in exercise of power of Section 3, Authority has been constituted. It is useful to extract paragraph No. 2 of Notification dated 12.04.1976: 2. Governor is hereby further pleased, in exercise of powers under Section 3 of said Act, to constitute, in respect of above mentioned Industrial Development Area, for purposes of said Act, Authority to be called New Okhla Industrial Development Authority , consisting of following, namely, (i) Secretary to Government, Uttar Pradesh, Industries Department, Member Chairman Ex officio (Under Clause(a)) (ii) Secretary to Government, Uttar Pradesh, Public Works Department, Member Ex Officio (Under Clause(b)) (iii) Secretary to Government, Uttar Pradesh, Local self Government, Member Department Ex officio (Under Clause (c)) (iv) Secretary to Government, Uttar Pradesh, Finance Department, Member Ex officio (Under Clause (d)) (v) Managing Director, UP State Industrial Development Corporation Member Ltd. Ex. Officio (Under Clause (e)) (vi) Chairman, UP State Member Electricity Board, 29 (Nominated under Clause (f)) Ex officio (vii) Chief Engineer, UP Jal Nigam Board, Member Ex officio (Nominated under Clause (f)) (viii) Chief Engineer, Irrigation Member Department UP, Ex officio (Nominated under(f)) (ix) Chief Town and Country Member Planner, UP, (Nominated under Clause(f)) Ex officio (x) District Magistrate, Bulandshahr, Member Ex officio (Nominated under Clause(f)) (xi) Chief Executive Officer Member Secretary (Under Clause (g)) 31. This Court having already laid down in Dalco Engineering (supra) that establishment of various financial corporations under State Financial Corporation Act, 1951 is establishment of Corporation by Act or under Act. We are of view that above ratio fully covers present case and we have no doubt that Authority have been established by 1976 Act and it is clearly covered by Notification dated 22.10.1970. It is further relevant to note that composition of 30 Authority is statutorily provided by Section 3 of 1976 Act itself, hence, there is no denying that Authority has been constituted by Act itself. 32. In view of what has been said above, we are of view that High Court did not commit any error in dismissing appeal filed by Revenue. In result, all appeals are dismissed. J. ( A.K. SIKRI ) J. ( ASHOK BHUSHAN ) NEW DELHI, JULY 02, 2018. CommissionerofIncome-tax (TDS), KanpurandAnr. v. CanaraBank