Satya Developers Private Limited, New Delhi V. JCIT Range-77, New Delhi

ITA 6302/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9744 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Appeal Filed On: 25-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.As No.6301 & 6302/DEL/2019 Assessment Years 2014-15 & 2017-18 Satya Developers Pvt. Ltd., 34, Babar Lane, Bengali Market, New Delhi. Joint Commissioner of Income Tax, Range-77, New Delhi. TAN/PAN: AABCK7225P (Appellant) (Respondent) Appellant by: Shri Divyansh Jain, Adv. Respondent by: Shri Abhishek Kumar, Sr.DR Date of hearing: 02 06 2022 Date of pronouncement: 07 06 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: Th e cap tio n ed ap p eals h av e b een fi led b y th e Ass essee ag ain st th e co mmo n o rd er o f th e Co mmiss io n er o f Inco me Tax (Ap p eals)-XXXI, New Delh i (‘CIT(A)’ in sho rt) d ated 2 7 .0 5 .20 19 arisin g fro m th e co mmo n assess men t o rd er d ated 2 9 .01 .20 18 p assed b y th e Assessin g Officer (AO) un d er Sectio n 2 7 1 C o f th e In co me Tax Act , 1 9 6 1 (th e Act) co n cern in g AYs 20 13 -14 & 2 0 17 - 1 8 . 2 . As p er its g ro u nd s o f ap p eal, th e asse ssee h as ch allen g e d th e imp o si t io n o f p en alty u n d er Sectio n 2 7 1 C o f th e In co me Tax Act fo r n on d ed u ctio n o f tax at so u rce as p er pro v isio ns o f Ch ap ter XVII-B to ward s amo u n t p aid as Ex tern al Dev e lo p me n t Ch arg es (EDC) to Directo rate o f To wn an d Co u n try Plan n in g , Hary an a I.T.As. No.6301 & 6302/Del/2019 2 (Hary an a Go v ernmen t) (DGTCP) th ro u gh b ank ing ch an n el fav o u rin g Hary an a Urb an Dev elo p men t Au th o rity (HUDA). The issu e is n o lo n g er res in teg ra . Th e id en tic al is su e h as co me u p fo r ad ju d icat io n b efo re th e Co -o rd in ate Ben ch o f Trib u nal in th e c ase o f S p a ze To wer Pvt. Ltd . vs. JCIT, New De lh i in ITA No .5 8 4 2 /Del/2 0 1 9 , o rd er d a ted 2 6 .0 5.2 0 2 2. Th e relev an t o p erat iv e p arag rap h s o f th e o rd er o f th e Co -o rd in ate Ben ch squ a rely co v ers th e issu e wh ich rea d s as u n d er: “ 6 . W e h a v e c a re f u l l y c o n s i d e re d t h e ri v a l s u b m i s sio n s. T h e A s se s si n g O f f i c e r/ J CI T l e v i e d p e n a l t y o f R s. 6 , 1 4 , 4 60 / - u n d e r S e c t i o n 2 7 1 C f o r s h o rt 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 ou r c e a l l e g i n g d e f a u l t c o m m i t t e d b y t h e a s s e ss e e u n d e r S e c t i o n 1 9 4C 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 Ch a rg e s ( E D C ) t o H a r y a n a U rb a n D e v e l o p m e n t A u t h o ri t y (H U D A ) . Wi t h t h e a s si st a n c e of t h e l d . c o u n se l , we 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 wn a n d Co u n t ry P l a n n i n g , H a ry a n a (H a r y a n a G o v e rn m e n t ) h a s i s su e d c l a ri f i c a t io 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 . 20 1 8 wh i c h i s se l f e x p l a n a t o r y a n d t h u s re p r o d u c e d h e re i n f o r r e ad y re 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 s a 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 , I.T.As. No.6301 & 6302/Del/2019 3 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 D i 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 id 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 / 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 r o 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 , s u 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 i n e d b y t h e D i r e c t o r . 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 i n 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 n s 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 s h a p e o f b a n k d r a f t d r a wn 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 r ba n e s 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 r b a n I n f r a s t r u c tu 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 Yo j a n a w a s a p p 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 x e 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 r o 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 nt o f E D C i s b e i n 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 at 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 de 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 me n t o f E D C i n r e s p e c t o f l i c e n s e / 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 t e w a y o r i n s h a p e o f d e m a n d d r af t s f a v o u r i n g I.T.As. No.6301 & 6302/Del/2019 4 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 ed f u 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 n t 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 t h 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 ng o u t E D 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 . S i 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 r h 7 . O n t h e b a si s o f t h e a f o r e s a i d c l a ri f i c a t i o n , t h e a s se s se 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 re f o r e su c h p a y m e n t i s e x e m p t f rom o b l i g a t i o n s t o 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 so n o t i c e t h a t i d e n t i c a l i s su 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 se o f P e rf e c t Co n st 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 No . 6 9 07 / D e l / 2 0 1 9 o r d e r d a t e 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 ou n d t h a t t h e p r o 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 ay m e n t s t o a g e n c 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 nt . T h e i m p o si t i o n o f p e 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 qu e n t l y f o u n d t o b e u n su st 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 ec 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 ri f i c a t i o n n o t e d a b o v e c o u p l e d wi t h v i e w t a k e n by t h e Co - o r d i n a 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 si t u a t i o n , we s e e n o r e a so n t o d e p a rt t h e re f r o m . C o n se q u e n t l y , w e f i n d m e ri t i n t he p l e a r a i s e d o n I.T.As. No.6301 & 6302/Del/2019 5 b e h a l f o f t h e a ss e s se 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 2 7 1 C o f t h e A c t . ” 3 . In co n so n an ce wit h v iew tak en b y th e Co -o rd in ate Ben ch , we h o ld th at i mp o sit io n o f p en alty o f Rs. 4 ,5 6 ,4 40 /- and Rs.5 ,3 4 ,0 00 /- u n d er Sectio n 2 71C o f th e Act fo r t h e Assessmen t Years 2 0 14 -15 an d 2 0 17 -18 resp ectiv e ly , is n o t ju st i fi ed in v i ew o f th e fin d in g o f th e Co -o rd in ate Ben ch th at th e asse ssee h as n o t co mmi t ted an y v io lat io n o f p ro v isio n o f Ch ap t er XVII B o f th e Act b y mak in g p ay men t to ward s EDC ch arg es to DGTCP Hary an a th rou gh HUDA with o u t d ed u ctio n o f TDS. 4 . In th e resu l t, b o th th e ap p eal s o f th e assesse e are a llo wed . Order pronounced in the open Court on 07/06/2022. Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /06/2022 Prabhat