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Facts
The Revenue filed appeals against the CIT(A)'s orders deleting demands raised under sections 201(1) and 201(1A) for non-deduction of TDS on External Development Charges (EDC) paid to HUDA. The CIT(A) had ruled that the assessee was not in default.
Held
The Tribunal found that the payment of EDC charges is contractual in nature and attracts TDS deduction under section 194C of the Income Tax Act, 1961. The Tribunal concurred with the jurisdictional High Court's decision in M/s Puri Construction Pvt. Ltd.
Key Issues
Whether EDC payments made to HUDA are subject to TDS deduction under section 194C, and whether the assessee was in default for non-deduction.
Sections Cited
201(1), 201(1A), 194C, 251(1)
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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA
O R D E R PER SATBEER SINGH GODARA, J.M: These Revenue’s twin appeals & 28/Del/2025 for A.Y. 2014- 15 & 2015-16 arise against Commissioner of Income-tax (Appeals)-31, New Delhi’s as many orders; both dated 18.10.2024 passed in case nos. CIT(A), Delhi- NFAC/2013-14/10042216 & CIT(A), Delhi-NFAC/2014-15/10149338, respectively, in proceedings u/s 201(1) read with section 201(1A) of the Income- tax Act, 1961, hereinafter referred to as the ‘Act’.
Heard both the parties at length. Case files perused.
& 28/Del/2025 2. The Revenue pleads the following identical substantive grounds in the instant twin cases: “1. On the facts and in the circumstances of the case, the Ld. CIT(A)-31, New Delhi has erred in deleting the demand raised u/s.201(1)/201(1A) on account of non-deduction of TDS by the Deductor Company on EDC payments to HUDA and not considering the judgment of Hon'ble jurisdictional High Court, Delhi in the case of M/s Puri Construction Private Limited Vs. Addl. CIT & Ors. 159taxmann.com 444 (Delhi) [2024] 462 ITR326(Delhi) on this issue.
On the facts and in the circumstances of the case, the Ld. CIT(A) failed to appreciate the facts of the case judiciously that External Development Charges (EDC) paid by deductor company to HUDA are liable for deduction of TDS u/s.194C of the Income Tax Act, 1961.
On the facts and in the circumstances of the case and in light of judgment of the Hon'ble jurisdictional High Court, Delhi in the case of M/s Puri Construction Private Limited Vs. Addl. CIT & Ors., it was within the power of the Ld. CIT(A) to hold that the Deductor Company has defaulted due to non-deduction of TDS on EDC payments to HUDA u/s 194C of the Act.
4. On the facts and in the circumstances of the case, the Ld. CIT(A)-31, New Delhi failed to exercise the powers conferred upon him under Section 251(1) of the Income Tax Act, 1961. Ld. CIT(A) may confirm, reduce, modify, or annul the assessment, in the light of facts & circumstances of the case and applicable legal principles.
That, the appellant craves to add, amend, modify and delete any of the grounds of appeal before or at the time of hearing.”
3. Suffice to say, a combine perusal of both the instant case files reveal that the Revenue herein is aggrieved against the CIT(A)’s findings, treating the assessee as not the assessee in default u/s 201(1A) of the Act for not having deducted TDS on external development charges “EDC” payments made to the Haryana Urban Development Authority (HUDA) involving varying sums in. This being the clinching factual position, the assessee could hardly dispute that the hon’ble & 28/Del/2025 jurisdictional high court’s landmark decision in M/s Puri Construction Pvt. Ltd. (supra) has already settled the issue in the department’s favour that payment of such “EDC” charges indeed attracts TDS deduction being contractual in nature u/s 194C of the Act. We, thus, find no reason to express our concurrence with the assessee’s vehement contentions supporting the CIT(A)’s lower appellate findings, under challenge. The Revenue succeeds in its identical sole substantive ground under appeal in both these cases in very terms. No other ground or argument has been raised before us.
These Revenue’s twin appeals in & 28/Del/2025 are allowed in above terms. A copy of this common order be placed in respective case files.
Order pronounced in open court on 18.08.2025.