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TMI Blog2019 (12) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... nda, Accountant Member And Shri Kuldip Singh, Judicial Member For the Assessee : Ms. Ashisha Mittal, CA For the Revenue : Shri S.S. Rana, CIT DR ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, M/s. Santur Infrastructure Pvt. Limited (hereinafter referred to as the assessee ) by filing the present appeal sought to set aside the impugned order dated 19.06.2019 passed by Commissioner of Income-tax (Appeals) 31, New Delhi affirming the penalty order dated 11.01.2018 passed u/s 271(1)(c) of the Income-tax Act, 1961 (for short the Act ), qua the assessment year 2015-16 on the grounds inter alia that :- 1. Under the facts and circumstances of the case, the penalty order dt. 11.01.2018 passed u/s 271C of the Income Tax Act,1961 by the ld. Assessing Authority and upheld by the Ld. First Appellate Authority is void as it is barred by limitation as prescribed u/s 275(1)(c) of the Act and the same deserves to be quashed. 2. Under the facts and circumstances of the case, the penalty u/s 271C of the Act levied by the ld. Assessing Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the assessee was statutorily bound to deduct TDS on the amount of ₹ 10,11,00,000/- nor brought on record any evidence if the non-deduction/non-deposit of tax at source was beyond the control of the assessee company, thus assessee company has no reasonable cause within the meaning of section 273B of the Act for non-deduction of tax at source and consequently, levied the penalty of ₹ 20,22,000/- @ 2% of the EDC amount u/s 271C of the Act. 3. Assessee carried the matter by way of an appeal before the ld. CIT (A) who has confirmed the penalty levied by the AO by dismissing the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 5. Undisputedly, demand drafts for payment of EDC were issued in the name of Chief Administrator, HUDA for an amount of ₹ 10,11,00,000/- for the year under assessment. It is also not in dispute tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e HUDA for execution of the work. 8. On the other hand, ld. DR for the Revenue laid emphasis on section 194C of the Act and contended that HUDA is neither a Government Department not a local authority, hence payment made to it is subject to deduction of TDS u/s 194C of the Act. 9. We are of the considered view that when payment of EDC has been made by the assessee in accordance with licence granted by the DTCP, the payment made to HUDA was not made in pursuance of any work contract or under statutory obligation meaning thereby that when the assessee has no privity of contract with HUDA rather the assessee has privity of contract with DTCP, a Government Department of Haryana, as per Agreement (supra) and the HUDA has merely received the payment for and on behalf of DTCP, the assessee was not required to deduct the TDS. 10. Ld. DR for the Revenue by relying upon the Office Memorandum F.No.370133/37/2017-TPL dated 23.12.2017 issued by the Central Board of Direct Taxes (CBDT) contended that there is no ambiguity that HUDA is a taxpayer entity under the Incometax Act and as such, TDS provisions would be applicable on EDC payable b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late Tribunal vide order dated 31.03.2006 entered the following findings: 11. We have carefully considered the rival submissions. In the instant case we are not dealing with collection of tax u/s 201(1) or compensatory interest u/s 201(1A). The case of the assessee is that these amounts have already been paid so as to end dispute with Revenue. In the present appeals we are concerned with levy of penalty u/s 271-C for which it is necessary to establish that there was contumacious conduct on the part of the assessee. We find that on similar facts Hon'ble Delhi High Court have deleted levy of penalty u/s 271-C in the case of Itochu Corporation 268 ITR 172 (Del) and in the case of CIT v. Mitsui Company Ltd. 272 ITR 545. Respectfully following the aforesaid judgments of Hon'ble Delhi High Court and the decision of the ITAT, Delhi in the case of Television Eighteen India Ltd., we allow the assessee's appeal and cancel the penalty as levied u/s 271C. 3. Being aggrieved, the Revenue took up the matter before the High Court of Delhi against the order of the Income Tax Appellate Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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