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TMI Blog2023 (5) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... l submits that assessee is a company engaged in the business of Real Estate and for the purpose of developing commercial colony in Haryana assessee was required to obtain a license from Director Town and Country Planning (DTCP) Government of Haryana. It is submitted that one of the conditions were granting such license by DTCP is payment of External Developed Charges (EDC). Ld. Counsel submits that during the assessment year 2014-15 assessee paid Rs.5.72 crores as EDC to Haryana Urban Development Authority (HUDA) as per the direction of DTCP for granting license. The Ld. Counsel submits that consequent to the survey u/s 133A of the Act in the premises of HUDA, Punchkula on 09.02.2017 and 14.02.2017, a notice u/s 271C of the Act dated 01.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 29.07.2022, wherein the Tribunal deleted the penalty levied u/s 271C of the Act under identical circumstances. 3. The Ld. DR supported the orders of the authorities below. 4. Heard rival submissions, perused the orders of the authorities below and the decisions relied on. We observed that identical issue of whether penalty u/s 271C of the Act can be levied for non deduction of TDS on the payments made to HUDA by the assessee came up before this Tribunal in the case of Vipul Ltd. vs. ACIT in ITA No. 1856/Del/2020 dated 29.07.2022 and also in the case of Sirur Developers Pvt. Ltd. vs. JCIT(TDS) in ITA No. 1164/2021 dated 08.09.2022 and the Tribunal deleted the penalty levied u/s 271C of the Act observing as under: - "3. On hearing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the material on record. It is seen that in Para 4.3.2, subparagraph (iv) of the order passed u/s 271C of the Act, the LD.AO has himself noted that the demand draft of the EDC amounts are drawn in favour of the Chief Administrator, HUDA though routed through the Director General, Town and Country Planning, Sector18, Chandigarh. He has also referred to the notes to accounts to the financial statements of HUDA wherein it has been stated that "other liabilities also include external development charges received through DGTCP, Department of Haryana for execution of various EDC works. The expenditure against which have been booked in Development Work in Progress, Enhancement compensation and Land cost." Undisputedly, the payment of EDC w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructure 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." 7.2 Similarly para no. 11 in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Government created by enactment of Legislature for carrying out developmental activities in the state of Haryana. Such Authorities admittedly are not in the category of local authority or Government. These payments were made during the year 2013-2016 and during this period, that is, prior to issue of CBDT Circular dated 23.12.2017, there was no clarity as regard the deduction of tax on these payments. We are of the view that the assessee was under a bona fide 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 license was granted by the Government and EDC charges was directed to be paid to HUDA, therefore, this could led to rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted levy of penalty u/s 271-C in the case of Itochu Corporation 268 ITR 172 (Del) and in the case of CIT v. Mitsui & Company Ltd. 272 ITR 545. Respectfully following the aforesaid judgments of Hon'ble Delhi High Court and the decision of the ITAT, Delhi in the case of Television Eighteen India Ltd., we allow the assessee's appeal and cancel the penalty as levied u/s 271- C." 3. Being aggrieved, the Revenue took up the matter before the High Court of Delhi against the order of the Income Tax Appellate Tribunal. The High Court rejected the appeal only on the ground that no Substantial question of law arises in the matter. 4. On facts, we are convinced that there is no substantial question of law, the facts and law having properl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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