Skytech Construction Pvt. Ltd. Vs Income Tax Officer (ITAT, Delhi Bench)
TDS u/s 194-I APPLIES TO NOIDA LEASE RENT-BUT SECTION 201 DEFAULT MAY VANISH IF PAYEE HAS PAID THE TAX
The Delhi ITAT has held that lease rent paid to NOIDA, Greater NOIDA or YEIDA attracts TDS u/s 194-I, following the Supreme Court’s binding decision in New Okhla Industrial Development Authority v. CIT [2018] 95 taxmann.com 80 (SC). However, before treating the payer as an assessee-in-default u/s 201(1), the AO must grant it an opportunity to establish that the case is covered by the first proviso to section 201(1). The matter was accordingly restored to the AO.
Facts of the case
The assessee, Skytech Construction Pvt. Ltd., was engaged in the business of real-estate development.
During FY 2013-14, the assessee paid lease rent aggregating to ₹42,67,989 to NOIDA, Greater NOIDA & the Yamuna Expressway Industrial Development Authority, commonly known as YEIDA.
The assessee did not deduct tax at source from these payments.
Proceedings u/ss 201(1) & 201(1A) were initiated by the AO to examine the assessee’s TDS compliance. The assessee contended that the payees were local authorities whose income was exempt u/ss 10(20) & 10(20A). Therefore, according to the assessee, no tax was deductible from the lease rent paid to them.
