2023 (2) TMI 168

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.... the penalty levied under section 271C of the Income Tax Act, 1961 (the Act) for non-deduction of TDS on the External Development Charges paid to Haryana Urban Development Authority [HUDA]. 2. The ld. Counsel for the assessee, at the outset, submits that the issue as to whether penalty is leviable under section 271C of the Act has been decided by the co-ordinate bench of the Tribunal in ITA. Nos. 6301 and 6302/Del/2019 dated 7.06.2022 wherein the Tribunal deleted the penalty as there is no default under section 194C of the Act for the reason that provisions of section 194C are not applicable on payments to an agency like HUDA. 3. The ld. DR placed reliance on the orders of the authorities below. 4. Heard rival submissions perused t....

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....t of External Development 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 Deduct ions on EDC Payments. Please refer to the mat ter ci ted as subject above. 1. Sect ion 2(g) of ....

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....No. 41 of 1963, in the shape of bank draft drawn in favour of CA, HSVP and send the same to CA, HSVP. 4. As the receipt on account of EDC was not sufficient to carry out the al l development works under EDC for the urban estate as per approved development plans, therefore to meet out the short fall, 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 alllicense/CLU holders have also....