BASE EXPORTS PRIVATE LIMITED,NEW DELHI vs. ITO WARD 73(3), DELHI

That the learned AddI./JCIT had granted an opportunity to file a written submission on or before 05.06.2025. However, the order under section 250 of the Income Tax Act, 1961 was passed prematurely on 04.05.2025 at 10:17 AM, before the expiry of the time granted to file the paper book, thereby denying the assessee a fair opportunity of being heard and hence the order is passed against the principles of natural justice. 3. That the Learned Income Tax Officer has failed to appreciate that Appellant Company should not be treated as assessee in default within the meaning of Section 250 as the Appellant Company was not liable to deduct the tax at source from the payments of EDC under Section 194C of Income tax Act. That the CBDT gave its instructions through its memorandum F. No. 370133/37/2017-TPL dated 23.12.2017 that TDS is deductible u/s 194 of the Act on payment of EDC to HSVP (erstwhile HUDA) which clearly shows that before this CBDT memorandum nobody was deducting tax at source from this EDC payment which has to be made to HUDA. Hence, this clearly shows that Assessee should not be treated as Assessee in default within the meaning of Section 250Hence the same is unlawful and unsustainable under the law. 3.1 That without prejudice to the above, the learned Commissioner of Income Tax has erred both in law and on facts in holding that the appellant company was liable to deduct tax at source @ 2% under Section 194C of the Act on External Development Charges paid on behalf of Director Town & Country Planning, Haryana (a State Government Undertaking) to Haryana Urban Development Authority (HUDA). 3.2 That the Addl/JCIT(A) -1 Vadodara has failed to appreciate that the External Development Charges is compensatory fees and is integral part of terms of license granted by Director General, Town & Country Planning, Haryana under Section 3(3)(a) of Haryana Development and Regulation of Urban Area Act, 1975 and those External Development Charges are payable by virtue of section 3(3)(a)(ii) of the Act read with Section (2)(g) of the said Act and therefore, there was no quid pro quo element involved

4 That even otherwise, the learned Addl/JCIT(A) -1 Vadodara has failed to appreciate that HUDA is acting only on behalf of Town & Country Planning, Haryana, a State Government in terms of Section 196 of the Income Tax Act and is a statutory body of the Government and therefore, any payment made to HUDA is otherwise Same as Grounds of Appeal exempt under section 196 of the Income Tax Act is purely based on misconception and therefore, unsustainable. 4. That the appellant company craves leave to add, alter, amend, modify, substitute, delete and/or rescind all or any of the Ground of Appeal on or before the final hearing, if necessity so arises.”

At the outset, is seen that the order of Ld. CIT(A) is ex-parte. We have heard the Ld. DR as none has appeared on behalf of the assessee. We note from the grounds of appeal that the assessee is aggrieved by the premature passing of the ex-parte appellate order, since the same was issued on 04.05.2025 whereas the assessee had been granted an opportunity to file written submissions on or before 05.06.2025 by the Ld. CIT(A). Thus the assessee was denied the opportunity of being heard.

In view of these facts and circumstances and in the interest of justice, we deem it appropriate to restore the matter to Ld. CIT(A) for fresh adjudication on merits after giving reasonable opportunity of being heard to the assessee. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 13-03-2026. (RAJ KUMAR CHAUHAN) ACCOUNTANT MEMBER