Cogent Realtors Private Limited Vs JCIT (OSD) (ITAT Delhi)
No TDS on EDC Payments to HUDA – Section 194I Not Applicable- EDC Is Statutory Levy, Not Rent – ITAT Delhi
Assessee, a real estate developer, was held liable u/s 201(1)/201(1A) for non-deduction of TDS on External Development Charges (EDC) paid to Haryana Urban Development Authority (HUDA). AO treated EDC as rent for use of land taxable u/s 194I, & CIT(A) upheld it.
Assessee contended that EDC is a statutory levy under the Haryana Urban Development Act, not payment for land use, relying on the Delhi High Court’s ruling in DLF Home Panchkula Pvt. Ltd. where it was held that Section 194I does not apply to EDC, a view upheld by the Supreme Court.
ITAT observed that both AO & CIT(A) had proceeded only u/s 194I & that EDC, being a government levy, is outside TDS scope.
Held:
No TDS deductible on EDC payments to HUDA.
Orders of AO & CIT(A) quashed; appeals allowed.
Essence: EDC is a statutory charge, not rent or contract payment — hence, provisions of Sections 194I/194C do not apply.
FULL TEXT OF THE ORDER OF ITAT DELHI
These two appeals have been preferred by the assessee against order dated 31.01.2025 of the learned Commissioner of Income Tax (Appeals)-3, Gurgaon, arising out of orders dated 26.04.2021 for Assessment Year 2014-15 and dated 20.05.2022 for AY 2015-16, passed u/s 201(1)/201(1A) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the JCIT(OSD), TDS Circle, Gurgaon.
