DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-75(1), DELHI, DELHI vs. MAHAGUN REAL ESTATE PRIVATE LIMITED, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”, NEW DELHI BEFORE SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 518/Del/2026, A.Y. 2013-14 Deputy Commissioner of Vs. Mahagun Real Estate Income Tax, Private Limited, Circle-75(1), Delhi C-227, Phase-1, Vivek Vihar, New Delhi �थायीलेखासं./जीआइआरसं./PAN/GIR No: AAFCM4203R Appellant .. Respondent Appellant by : None Respondent by : Shri Raghubir Singh, Sr. DR Date of Hearing 29.07.2026 Date of Pronouncement 30.07.2026

O R D E R PER VIMAL KUMAR, JM: The appeal filed by the assessee is against the order dated 11.09.2025 of the Ld. Commissioner of Income Tax (Appeal), Delhi-26[hereinafter referred to as “the CIT(A)”] u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of assessment order dated 19.03.2020 of the Ld. Assessing Officer/ ACIT (TDS), Circle 75(1), New Delhi (hereinafter referred to as ‘the AO’) u/s 201(1)/ 201(1A) of the Act for Assessment Year 2013-14.

P a g e | 2 ITA No. 518/Del/2026 Mahagun Real Estate Private Ltd. 2. The Grounds of appeal of Revenue are as under:

“1) Whether on the given facts and circumstances of the case, the Ld. CIT(A) erred in deleting the demand, even after agreeing to the fact that TDS was liable to be deducted and deposited, without establishing any infirmity with the order. 2) Whether on the given facts and circumstances of the case, the Ld. CIT(A) erred in appreciating that Hon'ble Delhi High Court in the case of Rajesh Projects (India) Pvt. Ltd. vs CIT (TDS)II & Ors has clearly specified that payment towards lease rent was to be treated as 'rent' and thus was liable to attract provisions of section 1941 and therefore did not invalidate the liability raised under Section 201 for the F.Y. 2012-13, but only directed the income tax authorities to not pursue any coercive proceedings. 3) Whether on the given facts and circumstances of the case, the Ld. CIT(A) erred in not appreciating that without sufficient documentary evidence that GNOIDA has paid the TDS liability arising out of the non-deduction of TDS on payments of lease rent under section 1941, the demands created vide order under section 201(1)/201(1A) dated 19.03.2020 cannot be automatically deleted. 4) The Appellant herein craves its right to alter, amend, add/or withdraw any grounds of appeal and/or to take any additional grounds of appeal.”

P a g e | 3 ITA No. 518/Del/2026 Mahagun Real Estate Private Ltd. liability arising out of the non-deduction of TDS on payments of lease rent the demands created vide assessment order could not be deleted.

“7.5 In view of the above discussion, submissions of the appellant and relevant case laws vis-à-vis facts of the case, I am of the considered view that the appellant should not be treated as an ‘assessee-in-default- in terms of ratio held in the case of Rajesh Projects (India) (P) Ltd. (supra). Therefore, the basic tax of Rs. 20,50,380/- u/s 201(1) and the interest liability of Rs. 17,42,823/- under section 201(1A) of Act, is hereby deleted. Accordingly, this ground taken by the appellant is hereby allowed.” 6. A co-ordinate Bench in ITA No. 1899/Del/2022 titled as Mahagun (India) Pvt. Ltd. vs. ACIT for A.Y. 2012-13 in para No. 9 observed as under:

“9. On appraisal of the factual matrix and the position of law. we find considerable force in the plea raised on behalf of the Assessee. The assessee has successfully demonstrated the existence of bona fide belief. This demonstration on standalone basis enables us to exonerate the assessee from the clutches of Section 201(1) and 201(1A) of the Act. We however further find that the operation of the judgment in Rajesh Projects (supra) have been made prospective as mentioned in paragraph 20 of the judgment. The cause of action under Section 201(1)/201(1A) in pursuance of the judgment of the Hon'ble

P a g e | 4 ITA No. 518/Del/2026 Mahagun Real Estate Private Ltd. Delhi High Court is thus not available to the Revenue for A.Y. 2012-13 in question. We also find that in the identical factual matrix, the Co-ordinate Bench in ITA No.997/Del/2020 order dated 15.12.2023 has granted relief similar to what is claimed in the present case. Thus, we have no hesitation to set aside the first appellate order and quash the impugned order dated 29.03.2019 passed under Section 201(1) and 201(1A) of the Act under challenge.” 6.1 Hon’ble High Court of Delhi in ITA No. 259/Del/2025 titled as Commissioner of Income Tax (TDS)-1, New Delhi vs. M/s. Mahagun (India) Pvt. Ltd. rejected the appeal of the Revenue.

Order pronounced in the open court on 30.07.2026

Sd/- Sd/- (RAMIT KOCHAR) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:30.07.2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI