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2022 (7) TMI 737 - AT - Income TaxPenalty u/s 271C - Non deduction of tds u/s 194C - payment made to the Government and not to the HUDA - Assessee has paid EDC to HUDA for carrying out civil works, construction work and other related works - HELD THAT:- As case was called for hearing on 12/7/22 none appeared for the appellant. The report of registry shows notice stand issued on 17/10/19. As the issue involved has been examined on various occasion by co-ordinates benches. No further notice is required. Arguments of Ld Sr. DR were heard who submitted that HUDA is a taxable entity and the notification relied by assessee of directions to not deduct tax at source is of later in time then the relevant assessment year. He also relied the Circular of CBDT whereby directions have been issued for deduction of TDS in payments made to authorities like HUDA. It was submitted that HUDA was neither Government department nor a local authority. Therefore any payment being made to it was to be subject to TDS u/s 194C of the Act. 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. case [2020 (12) TMI 1158 - ITAT DELHI] and in RPS Infrastructure Ltd. [2019 (9) TMI 39 - ITAT DELHI] which is also relied in M/s Santur Infrastructure Pvt Ltd [2019 (12) TMI 1106 - ITAT DELHI] cast sufficient light on the controversy where in it is held that assessee builder or developers or colonizers are not required to deduct tax at source at the time of payment of EDC to the HUDA and otherwise also there is no justification of penalty. As in case of TDI Infrastructure Ltd [2022 (7) TMI 388 - ITAT DELHI] issued by the Directorate of Town and Country Planning, Haryana which made it very obvious that receipts on account of EDC are being deposited in the Consolidated Fund of the State, accordingly directions were issued to colonizer like present assessee, to not deduct TDS. Once the fact of receipt of amounts received by HUDA being deposited in Consolidated Fund of State is established, there can be no second opinion that Assessee was rightly directed by DTCP, Haryana to not deduct the TDS. Even otherwise no intentional default is attributed to assessee and the default, if any, was on account of ambiguity which had arisen 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 - Levy of penalty u/s 271C of the Act cannot be sustained - Decided in favour of assessee.
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