2024 (11) TMI 693 - AT - Income Tax

Chargeability of tax u/s 201(1) and interest u/s 201(1A) - payment of External Development Charges ( EDC ) made to the HUDA was liable to Tax Deduction at Source ( TDS ) in the hands of various payers/persons including the appellant/assessee. HELD THAT - We are of the considered view that the appellant-assessee deserves reasonable opportunity of being heard and the Revenue also has to verify the sum paid/payable as EDC by the appellant/ assessee. In view thereof, without offering any comment on merit of the case, we deem it fit to set aside the impugned order and remit the matter back to the file of the Assessing Officer (TDS) for proper verification of quantum of EDC charges paid by the appellant/assessee and doing needful accordingly. The appellant-assessee should ensure compliances during the set-aside proceedings. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
Challenge to order confirming tax liability, challenge to interest charged, challenge to penalty proceedings.

Analysis:
The appellant/assessee challenged the tax liability of Rs. 7,14,250 under section 201(1) and interest of Rs. 5,99,970 under section 201(1A) of the Income Tax Act, 1961, along with the initiation of penalty under section 271C r.w.s. 272a(2)(g) of the Act. The appellant, a real estate developer, was surveyed by the Dy. Commissioner of Income Tax (TDS), Panchkula, regarding payment of External Development Charges (EDC) to Haryana Urban Development Authority (HUDA). The Assessing Officer alleged that the appellant had paid Rs. 3,57,12,500 as EDC charges, leading to the demand of tax and interest. The appellant contended that they had only paid Rs. 1,31,62,500 and challenged the assessment. The Ld. AR cited a High Court judgment in favor of the Revenue on the TDS issue but focused on disputing the quantum of EDC paid. The Sr. DR requested verification of the EDC charges. The Tribunal decided to set aside the order and remit the matter back to the Assessing Officer for proper verification of the EDC charges paid by the appellant, providing them with a reasonable opportunity to be heard. The appeal was allowed for statistical purposes.

This case involved a dispute over tax liability, interest, and penalty proceedings under the Income Tax Act. The appellant challenged the assessment of tax and interest based on the amount of External Development Charges (EDC) paid to Haryana Urban Development Authority (HUDA). The Assessing Officer alleged that the appellant had paid Rs. 3,57,12,500 as EDC charges, while the appellant contended that they had only paid Rs. 1,31,62,500. The appellant's arguments were supported by a High Court judgment on a similar issue. The Tribunal decided to remit the matter back to the Assessing Officer for proper verification of the EDC charges paid, providing the appellant with a fair opportunity to present their case. The decision to set aside the order was made in the interest of justice, without commenting on the merits of the case. The appeal was allowed for statistical purposes, granting relief to the appellant for further proceedings.