TMI Blog2022 (7) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of statement recorded during the course of survey of Sh. Ram Kumar, Senior Ld. AO, HUDA, he noticed that HUDA was engaged in acquiring land, developing it and finally handing over to the customers for a price. The lands were developed by HUDA though the same were identified and acquired by Urban Estate Department, Haryana Government, but the ownership and possession was transferred to HUDA for payment of consideration. The Ld. AO also examined scope of External Development Work (EDW) as per Haryana Development and Regulation of Urban Area Act, 1975 which includes water supply, sewerage, drains, necessary provision for treatment and disposal of sewage, sullage and storm water, roads, electrical works, solid waste management and disposal etc. The EDC charges are fixed by HUDA from time to time by issuing letters/circulars. It was noted by the Ld. AO that all the demand drafts for EDC charges were drawn in favour of Chief Administrator, HUDA though routed through Director General, Town and Country Planning, Government of Haryana. In view of the above mentioned facts, the Ld. AO was of the view that HUDA is taxable entity who was rendering services for External Development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grossly erred in not deleting the impugned penalty order was passed without appreciating that underline payments of EDC/IDC to HUDA is a statutory obligation levied by the State Govt of Haryana under the HUDA Act and the payment of which is to be essentially made without any choice / option to the payer. 3) 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 without appreciating that there exists no master servant or contractual relationship between the DTCP/HUDA and the assesse. 4) 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 without appreciating that the provisions of Chapter XVII of the Act in as much as no tax was required to be withheld on EDC/IDC payments made to DTCP/HUDA and the assesse could not be treated as assesse in default. 5) 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 without appreciating that the initiation of proceedings under Sec 201(1)/201(1A) of the Act is ill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alterm pattern ie Principles of natural justice, and are prejudicial to the interest to the assesse. 11) That the Appellant prays for the grant of permission to add, alter, delete, modify, any or all of the grounds of appeal at any time on or before or during the time of hearing before the Hon'ble ITAT. 4. Heard and perused the record. 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 assessees 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. 5. Giving thoughtful consideration to the matter on record it can be ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es these charges for carrying out external development and engages the 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 Co-ordinate 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 Co-ordinate 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause 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 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 amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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