TaxTMI 
TaxTMI 
2025 (10) TMI 1462
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....ance of the assessee is the action by the Assessing Officer wherein he has held that the assessee is in default u/s 201(1)/201(1A) of the Act for not having deducted TDS on external development charges "EDC" payments made to the Haryana Urban Development Authority (HUDA). 3. At the very outset, the ld. DR vehemently stated that the issue involved in this appeal has been decided in favour of the Revenue and against the assessee by the decision of the Hon'ble jurisdictional High Court at Delhi in the case of M/s Puri Construction Private Limited Vs. Addl. CIT & Ors. 159 taxmann.com 444 (Delhi) [2024] 462 ITR 326 (Delhi) 4. On the other hand, the ld. counsel for the assessee fairly conceded to the same but added that the appeal again....
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....rose and the jurisdictional challenge that stood raised, there was no justification to accept the objections raised.. That merely because the external development charges were determined and directed to be paid by the Directorate of Town and Country Planning, it did not deprive the payment of its intrinsic characteristic, namely, of being a payment made to the Authority. The submission of a lack of privity between the assessee and the Authority was to be rejected since section 194C did not contemplate the existence of a contractual relationship between a person who was responsible for paying a sum and the contractor as defined in that provision. The existence of a contract was only envisaged to be a factor pertinent to an arrangement which ....
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....olidated fund of the State. Post the promulgation of that scheme all payments towards external development charges were made through the Directorate of Town and Country Planning and the required funds for execution of development works were thereafter released to the Authority upon sanction being granted by the Finance Department of the State Government. This communication therefore, evidenced that all external development charges were made to the Authority, at least prior to March 31, 2017 pursuant to an understanding that those funds would be utilised towards external development. All the payments having been made to the Authority under the directives of the Directorate of Town and Country Planning, they were directed towards subserving a....
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.... drawn in favour of the Authority. Although they were routed through the Directorate of Town and Country Planning, those payments undoubtedly were to the account of the Authority. The statute as well as the licence conditions thus placed the assessee under a binding obligation to advance all external development charges payments in favour of the Authority. These qualified the responsibility which section 194C placed upon a payer who made payments to a contractor. The fact that external development charges were determined, computed or were recoverable by the Directorate of Town and Country Planning was wholly inconsequential since section 194C was solely concerned with a payment being made to a contractor who had an arrangement with a specif....
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....uthority discharged functions akin to or similar to governmental obligations or performed activities closely connected with State functions, it would not result in recognising it as "Government" immune from taxation under article 289 of the Constitution of India. That section 196 is not dependent upon a directive to pay. It is only concerned with whether the payment is made to a Government or an authority specified therein. The fact that arrears of external development charges could be recovered as arrears of land revenue was immaterial. Section 10A was merely a mode of recovery of external development charges. Even if that provision were to elevate external development charges to a statutory levy, it would not be determinative of whether t....
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....ed 18.08.2025 has decided the issue in favour of the Revenue as under: "3. Suffice to say, a combine perusal of both the instant case files reveal that the Revenue herein is aggrieved against the CIT(A)'s findings, treating the assessee as not the assessee in default u/s 201(1A) of the Act for not having deducted TDS on external development charges "EDC" payments made to the Haryana Urban Development Authority (HUDA) involving varying sums in. This being the clinching factual position, the assessee could hardly dispute that the hon'ble jurisdictional high court's landmark decision in M/s Puri Construction Pvt. Ltd. (supra) has already settled the issue in the department's favour that payment of such "EDC" charges indeed attracts TD....