Deputy Gothwal Constructions Private Limited Vs DCIT (ITAT Delhi)
EDC Payments to DTCP/HUDA: Delhi ITAT Remands TDS Default Issue u/s 201, Relief Possible If Payee Paid Tax
Delhi ITAT set aside the ex-parte order of CIT(A) and remanded the matter to the AO for fresh verification in relation to alleged TDS default on payment of External Development Charges (EDC) made to DTCP/HUDA.
The Assessee was treated as an assessee-in-default u/s 201(1) & 201(1A) for non-deduction of TDS u/s 194C on EDC of ₹4.60 crore, resulting in a demand of ₹17.20 lakh. The Assessee contended that EDC payments were made pursuant to statutory obligations under the Haryana Development & Regulation of Urban Areas Act, that there was no contractual relationship attracting s.194C, that payments were made to a Government department attracting s.196 exemption, and further that the Assessee itself was not the license holder, as licences were granted to 17 individual landowners.
The Tribunal noted that the lower authorities had not undertaken proper fact-finding, particularly on whether the Assessee was a licensee or merely a remitter on behalf of landowners, and whether the factual matrix was distinguishable from the Delhi High Court ruling in Puri Constructions Pvt. Ltd. relied upon by the Revenue. Importantly, the ITAT found merit in the alternative plea that if HUDA had already offered the EDC receipts to tax, the Assessee could not be treated as in default in view of the first proviso to s.201(1), read with Hindustan Coca Cola Beverage Pvt. Ltd. (SC).
Accordingly, the ITAT remanded the matter to the AO to verify whether the payee had filed its return, included the EDC receipts in income, and paid due tax, subject to furnishing the prescribed accountant’s certificate. If these conditions are satisfied, no liability u/s 201(1) or interest u/s 201(1A) can be fastened on the Assessee. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT DELHI
