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TMI Blog2023 (7) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, 1961 (the Act) concerning AY 2014-15. 2. As per its grounds of appeal, the assessee has challenged the action of the Assessing Officer for treating the assessee as 'assessee in default' towards failure to deduct tax as required under the provisions of Chapter XVIIB of the Act 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). 3. When the matter was called for hearing, the ld. counsel referred to the submissions made before the lower authorities and submitted that the assessee is not liable to deduct TDS on payment made to HUDA on account of EDC charges. The ld. c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opment Charges (EDC) to Haryana Urban Development Authority (HUDA). With the assistance of the ld. counsel, we find that the Directorate of Town and Country Planning, Haryana (Haryana Government) has issued clarification on TDS deduction on EDC payments vide letter dated 19.06.2018 which is self explanatory and thus reproduced herein for ready reference: "To The Chief Administrator, Haryana Shahari Vikas Pradhikaran, Panchkula, Memo No.DTCP/ACCTTS/Assessing Officer(HQ)/CAO/2894/2018 Date: 19.6.2018 Subject: Clarification on TDS Deductions on EDC Payments. Please refer to the matter cited as subject above. 1. Section 2(g) of the Haryana Development and Regulation of Urban Areas Act, 1975 defines that external developme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt on account of EDC was not sufficient to carry out the all development works under EDC for the urban estate as per approved development plans, therefore to meet out the shortfall, a new scheme Swaran Jayanti Haryana Urban Infrastructure Development Scheme (renamed as Mangal Nagar Vikas Yojana was approved by the State Govt. and appropriate budget provision for execution of development works has been made in the said scheme. From Financial Year 2017-18, the receipts on account of EDC is being deposited in the consolidated fund of the State under Major Receipt Head-0217 receipts and all license/CLU holders have also been directed vide order dated 12.05,2017 that payment of EDC in respect of license/CLU granted by TCP Deptt. may be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with view taken by the Co-ordinate Bench in the identical facts situation, we see no reason to depart therefrom. Consequently, we find merit in the plea raised on behalf of the assessee for cancellation of penalty imposed under Section 271C of the Act." 5. In consonance with view taken by the Co-ordinate Bench, we hold that imposition of demand of Rs. 80,000/- computed under Section 201(1) of the Act and consequential interest of Rs. 75,200/- under Section 201(1A) of the Act aggregating to Rs. 1,55,200/- for the Assessment Year 2015-16 is not justified in view of the finding of the Co-ordinate Bench that the assessee has not committed any violation of provision of Chapter XVII B of the Act by making payment towards EDC charges to DGTCP H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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