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TMI Blog2022 (7) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Ld. AO in imposing penalty of Rs. 6,40,000/- u/s 271C and that too without assuming jurisdiction as per law and without appreciating the facts and circumstances of the case and in violation of principles of natural justice. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in imposing penalty of Rs. 6,40,000/- u/s 271C of the Income Tax Act, is bad in law and against the facts and circumstances of the case and barred by limitation also. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in imposing penalty and passing the impugned penalty order more so when there is no default on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax at source as per provisions of Chapter XVII-B towards amount paid as External Development Charges (EDC) to Directorate of Town and Country Planning, Haryana (Haryana Government) (DGTCP) through banking channel favouring Haryana Urban Development Authority (HUDA). The issue is no longer res integra. The identical issue has come up for adjudication before the Co-ordinate Bench of Tribunal in the case of Spaze Tower Pvt. Ltd. vs. JCIT, New Delhi in ITA No.5842/Del/2019, order dated 26.05.2022. The relevant operative paragraphs of the order of the Co-ordinate Bench squarely covers the issue which reads as under: "6. We have carefully considered the rival submissions. The Assessing Officer/JCIT levied penalty of Rs.6,14,460/- under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the external development works as defined in clause (g) of section 2 are to be carried out by the Government or any other local authority. The proportion in which and the time within which, such payment is to be made, shall be determined by the Director. 3. Presently, external development works in the periphery of or outside colony/area for the benefit of the colony/area are being executed by Haryana Shahari Vikas Pradhikaran thereafter HSVP) which is the Development Authority or state Govt. Earlier upto 31.03.2017, Department of Town 8t Country Planning used to collect the external development charges from the colonizer to whom licences have been granted under Act No. 8 of 1975 and the persons to whom permission for change of land use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n & Country Planning Haryana, Chandigarh 7. On the basis of the aforesaid clarification, the assessee contends that the payment to HUDA is, in effect, payment to State Government and therefore such payment is exempt from obligations to deduct TDS in view of Section 196 of the Act. 8. We also notice that identical issue has been examined by the Coordinate Bench in the case of Perfect Constech Pvt. Ltd. vs. Additional Commissioner of Income Tax in ITA No.6907/Del/2019 order dated 29.12.2020 wherein Co-ordinate Bench found that the provisions of Section 194C are not applicable on payments to agencies like HUDA on behalf of the State Government. The imposition of penalty under Section 271C was consequently found to be unsustainable in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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