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2022 (11) TMI 1439 - AT - Income TaxTDS u/s 194C - Assessee in default u/s 201(1) & 201(1 A) for not deducting tax at source on payment made as External Development Charges to Greater Mohali Development Authority (GMADA) - HELD THAT:- We find that an identical issue has been decided by the Coordinate Chandigarh Benches in the case of M/s Sukham Infrastructure Pvt Ld. Chandigarh [2018 (6) TMI 1847 - ITAT CHANDIGARH] held that GMADA has been authorized to collect the EDC charges as per the policy decision of the Government and not out of free consent of the parties to the contract which has been executed between the assessee and the Govt. and therefore, it cannot be said that assessee has paid the EDC charges to GMADA out of any contractual obligations and liability towards GMADA. Though the developer contributes towards the proportionate cost of infrastructure development by way of EDC Charges, the work so carried out by the local authority is not in consequence of specific performance of the contract but out of its own obligations and duties towards the public and thus, the contract cannot be said to be a work/service contract and thus, on both accounts, the provisions of section 194C are not attracted. Nothing has been brought on record or to our notice during the course of hearing that the aforesaid findings of the Coordinate Benches have been disturbed by an order of a Higher Court and therefore, taking the same into consideration and following the principle of consistency, we are of the considered view that the provisions of section 194C are not attracted on payment of EDC charges to GMADA and thus, the demand raised u/s 201(1) read with Section 201(1A) of the Act are hereby set aside. Decided in favour of assessee.
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