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of <h1>Appeal analyzed penalty under section 271C for AY 2017-18, focusing on jurisdiction, legality, sustainability, and CBDT clarification.</h1> <h3>Shiv Sai Infrastructure (P) Ltd. Versus ACIT, Circle-77, New Delhi</h3> Shiv Sai Infrastructure (P) Ltd. Versus ACIT, Circle-77, New Delhi - TMI Issues:Challenge to levy of penalty u/s 271C for assessment year 2017-18 based on various grounds including jurisdiction, legality, sustainability, and absence of default. Interpretation of provisions of chapter XVIIB of the Act regarding payment of external development charges (EDC) to Govt. without TDS deduction. Examination of reasonable cause for non-deduction of TDS on payments made to Govt. for EDC charges. Analysis of CBDT clarification and its impact on TDS applicability. Comparison with similar cases and judgments regarding penalty under section 271C.Analysis:Issue 1: Challenge to Penalty u/s 271CThe appeal challenges the penalty imposed under section 271C for the assessment year 2017-18, questioning its legality, jurisdiction, and sustainability. The assessee contests the levy of penalty on various grounds, including the absence of default for initiating penalty proceedings under section 271C. The argument revolves around the interpretation of the provisions of the Income Tax Act related to the payment of external development charges (EDC) to the Government without deduction of TDS.Issue 2: Reasonable Cause for Non-Deduction of TDSThe case involves an assessment of whether there existed a reasonable cause for the non-deduction of TDS on payments made to the Government for EDC charges. The assessee asserts a bonafide belief that the payments were covered under section 196 of the Income Tax Act, hence not subject to TDS deduction. This belief is supported by a clarification issued by the Directorate of Town & Country Planning, Government of Haryana, stating that no TDS was required even before the clarification date.Issue 3: Interpretation of CBDT ClarificationThe analysis delves into the interpretation and impact of a CBDT clarification dated 23.12.17 regarding the applicability of TDS on payments made to the Government for EDC charges. The argument dissects the nature of the CBDT clarification, emphasizing that it was an opinion rather than a directive under section 119 of the Act. The relevance of the clarification in determining the liability for TDS on payments made to the Government is a crucial aspect of the case.Issue 4: Comparison with Similar Cases and JudgmentsThe judgment extensively references and compares the current case with similar cases and judgments, particularly the decision of the Coordinate Bench in RPS Infrastructure Ltd. vs. ACIT. The Tribunal's analysis in the cited case regarding the reasonable cause for non-deduction of TDS on EDC payments to HUDA serves as a precedent in determining the outcome of the present appeal. The application of legal principles and precedents from previous cases plays a significant role in the final decision to delete the penalty under section 271C.This detailed analysis of the issues involved in the judgment showcases the complex legal arguments, interpretations of statutory provisions, and reliance on precedents to arrive at a conclusion favoring the assessee in challenging the penalty imposed under section 271C.
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