TMI Blog2022 (12) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... en out of a direction contained in a statutory document, so no penalty can be justified u/s 271C of the Act, which is meant to address contumacious conduct. As a wholesome effect of above, the Bench is of considered opinion that levy of penalty u/s 271C of the Act cannot be sustained. - Decided in favour of assessee. - I.T.A. No. 6262/DEL/2019 - - - Dated:- 30-11-2022 - DR. B. R. R. KUMAR , ACCOUNTANT MEMBER AND SH. YOGESH KUMAR U. S. , JUDICIAL MEMBER Appellant by : Sh. Vijay Singla , CA Respondent by : Sh. Sanjay Nargas , Sr DR ORDER PER YOGESH KUMAR U. S. , JM This appeal is filed by the assessee against the order dated 27/06/2019 of the ld. Commissioner of Income Tax (Appeals) 31, New Delhi [hereinafter referred to CIT (Appeals)] for Assessment Year 2017-18. 2. The assessee has raised the following substantive grounds of appeal:- 1. That on the facts and in the circumstances of the case and in law, Ld CIT-A grossly erred in not deleting the impugned penalty order of Rs 14,24,000,00 u/s 271(l)(c) passed by the Ld Add! CIT, Range-76, Delhi (Ld AO) as the same was passed without application of mind and was purely based on whims and wishes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case and in law, Ld CIT-A grossly erred in not deleting the impugned penalty order which passed without appreciating that the HUDA is liable to assessment u/s 143(3) tax alleged to be not deducted there from cannot once again be received from the assessee, in terms of Sec 201(1) of the Act. 9) That on the facts and in the circumstances of the case and in law, Ld CIT-A grossly erred in not deleting the impugned penalty order which was passed without appreciating that there exists no contract between HUDA/DTCP for payments of EDC/IDC, rather it is a statutory obligation. In contract there exists always a wish to change the contractor, but in the present case it has to be paid without any negotiations bargaining's under compulsion. No control over pricing or terms of work, time framework or other normal provisions of the Act. There also exists no right with the assessee to terminate the contract, change the terms of the contract. Rather these options are available to HUDA/DTCP under statutory / legal provisions 10) That on the facts and in the circumstances of the case and in law, Ld CIT-A grossly erred in not deleting the impugned penalty order was passed witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he work carried out by Huda and hence the same was liable for TDS and passed penalty order u/s 271 C of the Act by imposing penalty for the year under consideration of Rs. 14,24,000/-. 5. Aggrieved by the penalty order dated 12/01/2018 the assessee has preferred an appeal before the CIT(A). The Ld.CIT(A) vide order dated 27/06/2019 dismissed the appeal. 6. Aggrieved by the order impugned dated 27/06/2019 passed by Ld.CIT(A), the assessee has preferred the present appeal on the grounds mentioned above. 7. The Ld. Counsel for the assessee has produced order passed by the Coordinate Bench in ITA No. 6261/Del/2019 for the Assessment Year 2014-15 and submitted that the present appeal is squarely covered of the order of the Co-ordinate Bench. The Ld. DR has not dispute the said facts. 8. We have heard the parties, perused the material on record and gave our thoughtful consideration. The Co-ordinate Bench of this Tribunal in ITA No. 6261/Del/2019 for the Assessment Year 2014-15 while dealing with the similar issues held as under:- 5. Giving thoughtful consideration to the matter on record it can be observed that the Co-ordinate Bench orders in M/s. Perfect Constech P. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services of HUDA for execution of the work. Therefore, it is our considered view that the assessee was not required to deduct tax at source at the time of payment of EDC as the same was not out of any statutory or contractual liability towards HUDA and, therefore, the impugned penalty was not leviable. We note that similar view has been taken by the Coordinate Benches of ITAT Delhi in the cases of Santur Infrastructure Pvt. Ltd. vs. ACIT in ITA 6844/Del/2019 vide order dated 18.12.2019, Sarv Estate Pvt. Ltd. vs. JCIT in ITA No.5337 5338/Del/2019 vide order dated 13.09.2019 and Shiv Sai Infrastructure (Pvt.) Ltd. vs. ACIT in ITA No.5713/Del/2019 vide order dated 11.09.2019. A similar view was also taken by the Coordinate Bench of ITAT Delhi in case of R.P.S Infrastructure Ltd. vs. ACIT in 5805, 5806 5349/Del/2019 vide order dated 23.07.2019. Therefore, on an identical facts and respectfully following the orders of the Coordinate Benches as aforesaid, we hold that the impugned penalty u/s 271C of the Act is not sustainable. The order of the Ld. CIT (A) is set aside and the penalty is directed to be deleted. 7. Similarly para no. 11 in the case RPS Infrastructure Ltd ( Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a clarification dated 29.06.2018 to the effect that no TDS was/is required to be deducted in respect of payments of EDC and this clarification issued by DTCP, covers both past and future as the words used are was/is. This shows that Governmental authority itself has demanded not to deduct TDS. In case even if tax was required to be deducted on such payment but not deducted under a bonafide belief then no penalty shall be leviable under section 271C of the Act as there was no contumacious conduct by the assessee. Our view is fully supported from the judgment of the Hon ble Supreme Court in the case of Commissioner of income tax vs. Bank of Nova Scotia, 380 ITR 550, wherein the Hon ble Court has held as under : 2. The matter was pursued by the Revenue before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal vide order dated 31.03.2006 entered the following findings: 11. We have carefully considered the rival submissions. In the instant case we are not dealing with collection of tax u/s 201(1) or compensatory interest u/s 201(1A). The case of the assessee is that these amounts have already been paid so as to end dispute with Revenue. In the present app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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