TaxTMI 
TaxTMI 
2019 (12) TMI 1106
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....o be quashed. 2. Under the facts and circumstances of the case, the penalty u/s 271C of the Act levied by the ld. Assessing Authority on the appellant is injudicious and bad at law as no such payment of EDC has been made by the Appellant company. 3. Under the facts and circumstances of the case, the Ld. Assessing Authority has grossly erred in arriving at a finding that the assessee has not yet complied with the provisions f section 194C on payments of EDC to HUDA as the same can not be termed as payment to contractors. 4. Without prejudice to the above and under the facts and circumstances of the case, the ld. First Appellate Authority has grossly erred in upholding the Penalty order of Id. Assessing Authority as the penalty u/s 271 C should not be levied in accordance to the provisions of section 273B of the Income Tax Act, 1961 as the appellant has proved that there was reasonable cause for non-deduction of tax at source ON the payment of external development charges to HUDA. 5. Without prejudice to the above and under the facts and circumstances of the case, the ld. Assessing Authority as well as the ld. First Appellate Authority has passed t....
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....HUDA has shown EDC as current liability in the balance sheet but, in the notice of accounts forming part of the balance sheet, it has shown that the EDC has been received for execution of various external development works, as and when the development works are carried out the EDC liabilities are reduced accordingly. It is also not in dispute that HUDA is engaged in acquiring land, developing it and finally handing over to the customers for a price. It is also not in dispute that EDC are fixed by HUDA from time to time by issuing letters/circulars. It is also not in dispute that the assessee has not credited the amount of EDC paid to Shri Vardhman Infra Heights Pvt. Ltd. in its P&L account. It is also not in dispute that Agreement between the land owners intended to set up a Group Housing Society dated 30.11.2010 was entered into between M/s. Dial Softech Pvt. Ltd., Shri Tek Ram, Smt. Saroj Singhal, Smt. Luxmi Devi and Smt. Sunehra Devi c/o M/s. Santur Infrastructure Pvt. Ltd. and the Governor of Haryana acting through the Director, Town & Country Planning (DTCP), Haryana, whereby owner undertakes to pay proportionate EDC as per rate, schedule, terms and conditions contained in ....
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.... in the light of the facts and circumstances of the case in which EDC have been paid to HUDA for Financial Years 2013-14, 2014-15, 2015-16 & 2016-17 (upto December 2016) as mentioned by the ld. CIT (A) in para 2.1 of his order, it goes to prove that prior to 23.12.2017, the date of CBDT circular, there was no clarity whatsoever as to the deduction of tax on EDC. When there was no clarity with the assessee prior to 23.12.2017, if TDS was to be deducted by the assessee on payment of EDC, it provided a "reasonable cause" u/s 273B of the Act that TDS was not required to be deducted. 12. Ld. AR for the assessee contended that DTCP had issued a clarification dated 29.06.2018 to the effect that no TDS was/is required to be deducted in respect of payment of EDC and relied upon the order passed by the coordinate Bench of the Tribunal in case of RPS Infrastructure Ltd. vs. ACTI in ITA Nos.5805, 5806, 5349/Del/2019 order dated 23.07.2019 wherein it is held that, "on the basis of letter supra issued by DTCP that the letter covers both past and future transactions and TDS was not required to be deducted." We have perused the order passed by the Tribunal in case of RPS Infrastructure Ltd. ....
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....nd approached by the Commissioner of Income Tax (Appeals) as well as by the Income Tax Appellate Tribunal. Thus, we see no merits in the appeal and it is accordingly dismissed." 15. Furthermore, coordinate Bench of the Tribunal in case of DCIT (TDS), ACIT (TDS) and JCIT (TDS), Dehradun vs. The Joint Secretary Organizing Committee for Winter Games also decided the identical issue by relying upon the decision rendered by Hon'ble Supreme Court in case of CIT vs. Bank of Nova Scotia (supra) and deleted the penalty u/s 271C by returning following findings :- "31. We have carefully considered the rival contentions and perused the orders of the lower authorities. On looking to the facts of the case as discussed by us in appeal of the assessee and revenue in 201(1) and 201(1A) proceedings above, we find that the belief of the assessee is bonafide and failure to deduct tax at source u/s 194C of the Act is for a reasonable cause. The ld Assessing Officer could not show any contemptuous conduct on part of the assessee for non-deduction of tax at source. There could also not be any reason for non-deduction as assessee has made most of the payments to the public sector unde....