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2019 (9) TMI 631 - AT - Income TaxPenalty u/s 271C - bonafide belief - TDS liability on payment paid for external development charges (EDC) to Govt. by issuing payment in the name of Haryana Urban Development Authority (HUDA) for and on behalf of and on instructions of Govt. - bonafide belief - HELD THAT:- As decided in RPS INFRASTRUCTURE LTD. VERSUS ACIT, RANGE-78, NEW DELHI. [2019 (9) TMI 39 - ITAT DELHI] assessee was under a bonafide belief that no tax is required to be deducted at source on such payments, firstly, for the reason that agreement was between DTCP, who is Governmental authority and licence was granted by the Government and EDC charges was directed to be paid to HUDA, therefore, this could led to reasonable cause that TDS was not required to be deducted; Secondly, DTCP had issued 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 271 C of the Act as there was no contumacious conduct by the assessee. - Decided in favour of assessee.
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