Celebrity Realcon (P) Ltd. Vs ITO (ITAT Delhi)
Prospective Application of Sec. 194-I Confirmed – Tribunal Deletes TDS Demand Against Real Estate Firm-No Default for Non-Deduction of TDS on Lease Rent Paid to NOIDA Before 16.02.2017 – ITAT Delhi
Assessee, a real estate developer, filed appeal against the order of CIT(A)-41, New Delhi, confirming TDS liability u/s 201(1)/201(1A) on lease rent payments made to NOIDA Authority during FY 2011-12 without deduction of tax at source. AO had treated the assessee as assessee-in-default for non-deduction of TDS u/s 194-I, demanding tax of ₹4,26,798/- along with interest.
Assessee argued that NOIDA Authority had categorically refused to accept payments after TDS deduction, asserting that it was exempt from such deduction being a statutory body under the U.P. Industrial Area Development Act, 1976. It was submitted that the issue of TDS applicability on payments to NOIDA was conclusively decided by the Hon’ble Delhi High Court in Rajesh Projects (India) Pvt. Ltd. & Ors. v. CIT (TDS)-2 [2017 (2) TMI 1109], which held that TDS u/s 194-I applies prospectively only from 16.02.2017, & that no deduction was required on payments made prior to that date. The Supreme Court, in New Okhla Industrial Development Authority & Greater Noida Industrial Development Authority v. CIT Appeals & Ors. [2018 (8) TMI 1374 (SC)], had affirmed the Delhi High Court’s judgment.
