ANSAL PROPERTIES & INFRASTRUCTURE LIMITED,NEW DELHI vs. DCIT, CIRCLE-73(1), NEW DELHI

Though the assessee has raised several grounds before us, the only identical issue to be decided in all these appeals is as to whether the assessee could be treated as assessee in default under section 201(1) of the Act and consequential levy of interest under section 201(1A) of the Act in respect of non-deduction of tax at source in terms of section 194C of the Act for External Development Charges (EDC) paid to HUDA in the facts and circumstances of the instant case.

None appeared on behalf of the assessee. Since the issue is covered by the decision of Hon’ble Delhi High Court, these appeals were heard on hearing the Learned DR and based on materials available on record. It is not in dispute that the assessee had made payment of EDC charges to HUDA without deducting tax at source. Pursuant to the survey/ inspection carried out at the office of Haryana Urban Development Authority (HUDA) under section 133A of the Act by the TDS wing of the Income Tax Department, Panchkula on 4-12-2018, it was noticed that EDC received by HUDA from private developers / colonizers without deduction of tax at source. Accordingly, proceedings under section 201(1)/201(1A) were initiated in the case of the assessee by issuing notice on 5-7-2022 on the ground that HUDA is a taxable entity and EDC paid by assessee to HUDA has character of income in the hands of HUDA, thereby liable for deduction of tax at source. We find that this issue was subject matter of consideration by the Hon’ble Jurisdictional High Court in the case of Puri construction reported in 159 taxmann.com 444 (Del HC) vide order dated 13-2-2024 wherein it was held that provisions of section 194C of the Act would get attracted in respect of EDC paid by real estate developers to HUDA. We find that the learned CITA had followed the decision of Hon’ble Jurisdictional High Court and held that EDC paid by the assessee without deduction of tax at source to HUDA makes the assessee as ‘assessee in default’ in terms of section 201(1) of the Act and consequentially liable for levy of interest under section 201(1A) of the Act. We do not find any infirmity in the said order of the learned CITA. Accordingly, the grounds raised by the assessee are hereby dismissed.

In the result, all the appeals of the assessee are dismissed.