TaxTMI 
TaxTMI 
2025 (12) TMI 1807
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....gh which the action of ld.AO has been confirmed. 1.1 Aggrieved with the action of Ld. Addl./JCIT (Appeal) the assessee has approached the ITAT with the following grounds: "1. That on the facts and in the circumstances of the case, and in law, the Ld. CIT(A) has erred in confirming the action of the Assessing Officer in treating the appellant as an assessee-in default u/s 201(1) of the Income Tax Act, 1961 and in levying interest u/s 201(1A), for non-deduction of TDS of Rs. 8,00,400/- and interest of Rs. 9,20,000/- respectively on External Development Charges (EDC) amounting to Rs. 4,60,00,000/-, paid by the appellant to the Directorate of Town and Country Planning (DTCP), Haryana. 2. That the Ld. CIT(A) has failed to appreciate that the payment of EDC was made by the appellant to the payees HUDA in compliance with a statutory obligation arising under the Haryana Development and Regulation of Urban Areas Act, pursuant to the license granted by DTCP Haryana for development of a group housing project in Village Kakrola, Gurugram, and not under any contract or work arrangement, and hence, provisions of Section 194C of the Act were not attracted. 3. That th....
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....the same is vitiated in law. 10. That the appellant craves leave to add, alter, amend or withdraw any of the grounds of appeal at the time of hearing." 2. Before us the Ld.AR filed detailed paper books and a compendium of cases laws. The Ld. AR also filed written submissions which were extensively used by him to argue that the assessee had no liability whatsoever to deduct tax at source. The Ld. AR read out from his submissions and for the sake of capturing the salient points of his argument that the assessee had no obligation to deduct tax at source. Relevant portions from the same deserve to be extracted: "7. The assessee being aggrieved has preferred the instant appeal. At the outset it is submitted that none of the three notices of hearing as allegedly issued had been received by the assessee and thus the assessee could not appear before the learned CIT(A) in response to the notices allegedly issued by him. It is thus submitted the appellant was prevented by sufficient cause, when it had failed to appear and furnish its detailed explanation in support that it was under no obligation to have deducted the tax at source on the sums remitted by it. It is thus s....
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....Gothwal Constructions Pvt. Ltd. and thus there was no obligation of the appellant to have deposited the EDC under section 3(3)(ii) of Haryana Development and Regulation of Urban Areas Act, 1975. 8. It is submitted that, since the license had not been granted to the appellant by the Directorate of Town & Country Planning (DTCP) Haryana, there arose no occasion for it to have either paid any sum by way of External Development Charges (EDC) or deposit the same, which sum was to be paid by the license holders. Infact, what the assessee did was that it had deposited the sums after having been paid by the land owners, (who had been granted the licenses to develop the lands owned by them). It is submitted the perusal of license clearly reflects the names of the land owners as per Schedule (Pg. 28 -29) who alone had been granted license to develop the land. It is submitted the appellant company is thus neither the license holder nor is the developer of land. That the role of the assessee was to merely deposit the said sums on behalf of the owners and thus under the Income Tax Act, there being no provision to make it liable to deduct the tax at source u/s 194C of the Act, it did no....
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.....) and read out the head notes as under: - "Section 194C, read with sections 196 and 271C, of the Income-tax Act, 1961 - Deduction of tax at source Contactors/subcontractors, payments to (Scope of provision) - Assessee was granted license to carry out a development project under Haryana Development and Regulation of Urban Areas Act, 1975 - Assessee paid External Development Charges (EDC) to Haryana Shahari Vikas Pradhikaran (HSVP) on directions of Department of Town and Country Planing (DTCP) - Assessing Officer opined that EDC would fall with ambit of section 194C - He, thus, held that assessee was in default for non-deduction of TDS and penalty was to be levied under section 271C - Assessee contended that payments made to HSVP were pursuant to directives of DTCP and in aid of external development work being carried out, those payments should be viewed as sums which were payable to Government of Haryana - It was noted from communication of DTCP that an arrangement was in existence as per which DTCP was used to collect EDC and sent to HSV - Communication further asserted that HSVP was executing agency working for and on behalf of state government for carrying out external ....