Trehan Promoters & Builders Pvt Ltd Vs ITO (ITAT Delhi)
Tribunal dismissed the appeal of Trehan Promoters & Builders Pvt Ltd challenging the order u/s 201/201(1A) for non-deduction of TDS on EDC payments made to Haryana Urban Development Authority(HUDA).
Assessee had argued that EDC payments were statutory in nature & not contractual, hence outside the scope of TDS. Revenue relied on the binding judgment of jurisdictional Delhi High Court in Puri Construction Pvt Ltd 462 ITR 326 which held that EDC payments made to HUDA constitute contractual payments attracting TDS u/s 194C since HUDA is the executing agency responsible for external development works.
Tribunal noted that the Assessee fairly conceded that Puri Construction governs the issue & that no stay has been granted by Supreme Court. Tribunal also referred to ITAT’s own decision in Ireo Grace Realtech Pvt Ltd where Puri Construction was followed. Tribunal held that EDC payments prior to 31.03.2017 were made directly to HUDA pursuant to an arrangement for execution of external development works, thereby satisfying the conditions of s.194C. Since HUDA had no exemption certificate u/s 197/197A & is not “Government” u/s 196, Assessee was liable to deduct TDS. Accordingly, Tribunal upheld AO’s finding that Assessee was in default u/s 201(1)/201(1A). Appeal was dismissed.
