Appeal details
Counselvise Citation
[2023] 102 COUNSELVISE.COM (IT) 3349 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
17-07-2023
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
G
Next Hearing Date
17-07-2023
Assessment Year
2015-2016
Appeal Filed On
30-01-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.217/DEL/2023 Assessment Year 2015-16 ITO Ward-77(1) New Delhi. Vs. Santur Builders Pvt. Ltd. E-6 Greater Kailash, Part-I New Delhi TAN/PAN: AAICS4666F (Appellant) (Respondent) Appellant by: Shri Sarthak Jain, Adv. Respondent by: Shri Anuj Garg, Sr.DR Date of hearing: 18 07 2023 Date of pronouncement: 18 07 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he c apti oned a ppeal has be en filed by t he R evenue a gainst the order of the Co mmiss i oner of Income Ta x (A ppeals )-XX I II, N ew D elhi ( ‘C IT (A )’ i n s hor t) da te d 06. 10. 2022 a rising fr om the order dated 2 3. 02. 202 2 passe d by the A ssess in g Of fice r (A O ) under Sec tion 201/201(1A ) of the A ct, 1961 ( th e A ct) c onc erning A Y 2015-16. 2. A s per its grou nds of a ppeal, the asse ssee has cha lle nge d th e act io n of the A ssessi ng O ffic er for trea tin g t he a ssessee as ‘ass essee in d efault ’ t ow ar ds fail ur e to deduct tax a s required under t he pr ovis ions of Chapter X V IIB of the Ac t tow a rds amount paid a s Ex te rnal D evel opme nt C ha rges (ED C ) to D ir ect orat e of Town and Co unt ry P lan ning, Haryana (H a r ya na G overnme nt) I.T.A. No.217/Del/2023 2 (D G TCP) through ba nking c ha nnel fa vou ri ng H ar yana Urba n D evel opment A ut hori t y (H U D A). 3. T he i ssue is no longer r es i ntegr a. T he i de ntic al iss ue has ca me up fo r adj udicati on before the Co-o rdinate Benc h o f Trib una l i n the cas e of Sp aze Tower Pvt. Ltd. vs. JCIT, New D elhi in ITA N o. 5842/D el/ 2019, or der dat ed 2 6. 05. 202 2. T he re levant ope rative pa ra gra phs of t he ord er o f th e C o -ordin ate Be nc h squarel y covered t he iss ue reads as under : “ 6 . W e h a v e c a r e f u l l y c o n s i d e r e d t h e r i v a l s u b m i s s io n s . T h e A s s e s s i n g O f f i c e r / J C I T l e v i e d p e n a l t y o f R s . 6 , 1 4 ,4 6 0 / - u n d e r S e c t i o n 2 7 1 C f o r s h o r t d e d u c t i o n /n o n d e d u c t i o n o f t a x a t s o u r c e a l l e g i n g de f a u l t c o m m i t t e d b y t h e a s s e s s e e u n d e r S e c t i o n 1 9 4 C o n p a y m e n t o f E x t e r n a l D e v e l o p m e n t C h a r g e s ( E D C ) t o H a r y a n a U r b a n D e v e l o p m e n t A u t h o r i t y ( H U D A ). W i t h t h e a s s i s t a n c e o f t h e l d . c o u n s e l , w e f i n d t h a t t h e D i re c t o r a t e o f T o w n a n d C o u n t r y P l a n n i n g , H a r y a n a ( H a r y a n a G o v e r n m e n t ) h a s i s s u e d c l a r i f i c a t i o n o n T D S d e d u c t i o n o n E D C p a y m e n t s v i d e l e t t e r d a t e d 1 9 . 0 6 . 2 0 1 8 w h i c h i s s e l f e x p l a n a t o r y a n d t h u s r e p r o d u c e d h e r e i n f o r r e ad y r e f e r e n c e : “ T o T h e C h i e f A d m i n i s t r a t o r , H a r y a n a S h a h a r i V i k a s P r a d h i k a r a n , P a n c h k u l a , M e m o N o .D T C P / A C C T T S / A s s e s s i n g O f f i c e r ( H Q ) / C A O / 2 8 9 4 /2 0 1 8 D a t e : 1 9 . 6 .2 0 1 8 S u b j e c t : C l a r i f i c a t i o n o n T D S D e d u c t i o n s o n E D C P a ym e n t s . P l e a s e r e f e r t o t h e m a t t e r c i t e d a s s u bj e c t a b o v e . 1 . S e c t i o n 2 (g ) o f t h e H a r y a n a D e v e l o p m e n t a n d R e g u l a ti o n o f U r b a n A r e a s A c t , 1 9 7 5 d e f i n e s t h a t e x t e r n a l d e v e l o pm e n t w o r k s (h e r e i n a f t e r r e f e r r e d a s E D W ) s h a l l i n c l u d e s a n y o r a l l i n f r a s t r u c t u r e d e v e l o p m e n t w o r k s l i k e w a t e r s u p p l y , s e w e r a g e , d r a in s , p r o v i s i o n s o f t r e a t m e n t a n d d i s p o sa l o f s e w a g e , s u l l a g e a n d s t o r m w a t e r , r o a d s , e l e c t r i c a l w o r k s , s o l i d w a s t e m a n a g e m e n t a n d d i s p o sa l , s l a u g h t e r h o u s e s , c o l l e g e s , h o s p i t a l s , s t a d i u m / s p o r t s c o m p l e x, f i r e s t a t i o n s , g r i d s u b - s t a t i o n s e t c . a n d / o r a n y o t h e r w o r k w h i c h t h e Di r e c t o r m a y s p e c i f y t o b e e x e c u t e d i n t h e p e r i p h e r y o f o r o u t s i d e c o l o ny / a r e a f o r t h e b e n e f i t o f t h e c o l o n y / a r e a . 2 - A s p e r S e c t i o n 3 ( 3 ) ( i i ) , l i c e n s e h o l d e r h a s t o pa y p ro p o r t i o n a t e d e v e l o p m e n t c h a r g e s i f t h e e x t e r n a l d e v e l o p m e n t w o rk s a s d e f i n e d i n c l a u s e (g ) o f s e c t i o n 2 a r e t o b e c a r r i e d o u t b y t he G o v e r n m e n t o r a n y o t h e r l o c a l a u t h o r i t y . T h e p r o p o r t i o n i n w h i c h a n d t h e t i m e w i t h i n w h i c h , su c h p a y m e n t i s t o b e m a d e , s h a l l b e d e t e r m in e d b y t h e D i r e c t o r . I.T.A. No.217/Del/2023 3 3 . P r e s e n t l y , e x t e r n a l d e v e l o p m e n t w o r k s i n t h e p e ri p h e r y o f o r o u t s i d e c o l o n y / a r e a f o r t h e b e n e f i t o f t h e c o l o n y / ar e a a r e b e in g e x e c u t e d b y H a r y a n a S h a h a r i V i k a s P r a d h i k a r a n t h e r ea f t e r H S V P ) w h i c h i s t h e D e v e l o p m e n t A u t h o r i t y o r s t a t e G o v t . Ea r l i e r u p t o 3 1 . 0 3 .2 0 1 7 , D e p a r t m e n t o f T o w n 8 t C o u n t r y P l a n n i n g u s e d t o c o l l e c t t h e e x t e r n a l d e v e l o p m e n t c h a r g e s f r o m t h e c o l o n i z e r t o w h o m l i c e n c e s h a v e b e e n g r a n t e d u n d e r A c t N o . 8 o f 1 9 7 5 a n d t h e p e r s o ns t o w h o m p e r m i s s i o n f o r c h a n g e o f l a n d u s e h a v e b e e n g r a n t e d u n d e r A c t N o . 4 1 o f 1 9 6 3 , i n t h e sh a p e o f b a n k d ra f t d r a w n i n f a v o u r o f C A , H S V P a n d s e n d t h e s a m e t o C A , H S V P . 4 . A s t h e r e c e i p t o n a c c o u n t o f E D C w a s n o t s u f f i c ie n t t o c a r r y o u t t h e a l l d e v e l o p m e n t w o r k s u n d e r E D C f o r t h e u rb a n es t a t e a s p e r a p p r o v e d d e v e l o p m e n t p l a n s , t h e r e f o r e t o m e e t o u t th e s h o r t f a l l , a n e w s c h e m e S w a r a n J a y a n t i H a r y a n a U rb a n I n f r a s t r u c t u r e D e v e l o p m e n t S c h e m e ( r e n a m e d a s M a n g a l N a g a r V i k a s Y o j a n a w a s a pp r o v e d b y t h e S t a t e G o v t . a n d a p p r o p r i a t e b u d g e t p r o v i s i o n f o r e xe c u t i o n o f d e v e l o p m e n t w o r k s h a s b e e n m a d e i n t h e s a i d s c h e m e . F ro m F i n a n c i a l Y e a r 2 0 1 7 -1 8 , t h e r e c e i p t s o n a c c o u n t o f E D C i s b e in g d e p o s i t e d i n t h e c o n s o l i d a t e d f u n d o f t h e S t a t e u n d e r M a j o r R e c e i p t H e a d - 0 2 1 7 r e c e i p t s a n d a l l l i c e n s e / C L U h o l d e r s h a v e a l s o b e e n d i r e c t e d v i d e o r d e r d a t e d 1 2 . 0 5 ,2 0 1 7 t h a t p a y m e n t o f E D C i n r e s p e c t o f l i c e n se / C L U g r a n t e d b y T C P D e p t t . m a y b e m a d e o n l i n e t h r o u g h e - p a y m e n t g a te w a y o r i n s h a p e o f d e m a n d d r a f t s f a v o u r i n g D i r e c t o r , T o w n 6 C o u n t r y P l a n n i n g , H a r y a n a . R e q u i r e d fu n d s f o r e x e c u t i o n o f d e v e l o p m e nt w o r k s a r e r e l e a s e d t o H S V P a f t e r g r a n t i n g t h e s a n c t i o n f r o m th e F i n a n c e D e p a r t m e n t . I t i s , t h e r e f o r e , c l a r i f i e d t h a t H S V P i s o n l y a n e xe c u t i n g a g e n c y f o r a n d o n b e h a l f o f S t a t e G o v t . f o r c a r r y i n g o u t ED W f o r w h i c h f u n d s a r e g i v e n t o H S V P b y t h e G o v t . t h r o u g h T C P D e p t t . Si n c e , p a y m e n t f o r E D C h a s b e e n m a d e t o T C P D e p t t . o f S t a t e G o v t . , n o T D S w a s / i s t o b e d e d u c t e d o u t o f p a y m e n t m a d e t o G o v t . f o r E D W . A c c o u n t s o f f i c e r ( H O ) F o r : D i r e c t o r T o w n & C o u n t r y P l a n n i n g H a r y a n a , C h a n d i g a rh 7 . O n t h e b a s i s o f t h e a f o r e s a i d c l a r i f i c a t i o n , t h e a s s e s s e e c o n t e n d s t h a t t h e p a y m e n t t o H U D A i s , i n e f f e c t , p a y m e n t t o S t a t e G o v e rn m e n t a n d t h e r e f o r e s u c h p a y m e n t i s e x e m p t f r o m o b l i g a t i o n s to d e d u c t T D S i n v i e w o f S e c t i o n 1 9 6 o f t h e A c t . 8 . W e a l s o n o t i c e t h a t i d e n t i c a l i s s u e h a s b e e n e x am i n e d b y t h e Co - o r d i n a t e B e n c h i n t h e c a s e o f P e r f e c t C o n s t e c h P v t . L t d . v s . A d d i t i o n a l C o m m i s s i o n e r o f I n c o m e T a x i n I T A N o . 6 9 0 7 / D e l / 2 0 1 9 o rd e r d a te d 2 9 . 1 2 .2 0 2 0 w h e r e i n C o - o r d i n a t e B e n c h f o u n d t h a t t h e p ro v i s i o n s o f S e c t i o n 1 9 4 C a r e n o t a p p l i c a b l e o n p a y m e n t s t o a g e nc i e s l i k e H U D A o n b e h a l f o f t h e S t a t e G o v e r n m e n t . T h e i m p o si t i o n o f pe n a l t y u n d e r S e c t i o n 2 7 1 C w a s c o n s e q u e n t l y f o u n d t o b e u n su s t a i n a b l e i n t h e a b s e n c e o f d e f a u l t o f S e c t i o n 1 9 4 C o f t h e A c t . 9 . T h e f a c t s a n d i s s u e b e i n g i d e n t i c a l , i n t h e l i g ht o f t h e c l a r i f i c a t i o n I.T.A. No.217/Del/2023 4 n o t e d a b o v e c o u p l e d w i t h v i e w t a k e n b y t h e C o - o rd i na t e B e n c h i n t h e i d e n t i c a l f a c t s s i t u a t i o n , w e s e e n o r e a s o n t o d e p ar t t h e r e f r o m . C o n s e q u e n t l y , w e f i n d m e r i t i n t h e p l e a r a i s e d o n be h a l f o f t h e a s s e s s e e f o r c a n c e l l a t i o n o f p e n a l t y i m p o s e d u n d e r S e c t i o n 27 1 C o f t h e A c t . ” 4. In cons onance w ith vi ew ta ken b y the C o-ord inate Be nch, we hold th at i mpos ition of de mand of R s . 46, 51, 786/ - compute d unde r Sect ion 201 of the A ct and conseque nt ia l in te res t of Rs. 40, 00,536/- under Sect ion 201(1A ) of the A ct ag gre ga ti ng t o Rs. 86, 52,322/- for the A ss ess me nt Ye ar 2015 -16 is not j ust i fi ed in view of t he findin g o f th e C o- ordina te B ench tha t the a ssessee has not co mmi tt ed a ny violati on of prov ision of C hapter X V II B of the A ct b y making pa yment towa rds ED C charges to D G TC P Har yana throu gh H UD A w ithout deducti on of T D S. 5. It is fur ther notice d t ha t H on’ ble Su pre me C ourt i n the case of U nion of Indi a vs. Additi ona l C omm issi oner of Income Tax (TD S), Kanp ur, 13 6 t axm ann. c om 15 5 ( SC ) in t he c ont ext of A gra D evel opment Auth ori t y obs er ve d tha t such auth ori t y wa s sta tu to r y body cons titute d u nde r U P U rban Plann ing a nd De ve lopme nt A c t, 1973 an d cove re d by noti fica ti on issued. A fte r c onsi de ri ng the terms of n otificati on, it was hel d that T D S pro vis io ns f or pa yme nts made t o such A ut hor it y are not a ppl ica ble. Sa me pri nci ples w ould a ppl y m utatis m utandis i n the instant case. 5. In the res ul t, the appeal of t he R eve nue is d is miss ed. Order pronounced in the open Court on 18/07/2023 Sd/- Sd/- [KUL BHARAT] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /07/2023 Prabhat
AI Insights
The case involves an appeal by the Income Tax Officer, Ward-77(1), New Delhi against Santur Builders Pvt. Ltd., concerning the non-deduction of TDS on payments made as External Development Charges (EDC) to the Directorate of Town and Country Planning, Haryana. The Assessing Officer treated the assessee as 'assessee in default' under Section 201/201(1A) of the Income Tax Act, 1961, for the Assessment Year 2015-16. The Tribunal referenced a similar case, Spaze Tower Pvt. Ltd. vs. JCIT, New Delhi, and other precedents, which clarified that such payments to state authorities are exempt from TDS under Section 196 of the Act. Consequently, the Tribunal dismissed the Revenue's appeal, aligning with the judicial interpretations and clarifications provided by the relevant state authorities.
