IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E” DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR US, JUDICIAL MEMBER ITA No.1899/Del/2022 Assessment Year 2012-13

ITA No.1900/Del/2022 Assessment Year 2012-13

O R D E R

PER PRADIP KUMAR KEDIA - A.M.:

The captioned appeal has been filed by the assessee against the orders of the Commissioner of Income Tax (Appeals)-28, New Delhi (‘CIT(A)’ in short) dated 29.06.2022 arising from the respective orders dated 29.03.2019 and 25.03.2019 passed by the Assessing Officer (AO) under Section 201(1)/201(1A) of the Income Tax Act, 1961 (the Act) concerning A.Y. 2012-13 in the two appeals captioned above.

ITA No.1899/Del/2022 – A.Y. 2012-13

2. The appeal of the assessee concerns challenge to proceedings under Section 201(1)/201(1A) whereby demand of Rs.62,76,444/- has been raised on the assessee treating the assessee as assessee in default in the second round of proceedings. The AO, by order dated 29.03.2019 passed under Section 201(1)/201(1A) of the Act, held the assessee as ‘assessee in default’ towards non-deduction of TDS on lease rent paid to NOIDA Authorities.

3. Assailing the action of the AO and CIT(A), the ld. counsel for the assessee submitted at the outset that the AO has passed two orders under Section 201(1)/201(1A) dated 22.02.2013 and 29.03.2019 for A.Y. 2012-13 in question. The impugned order passed under Section 201(1)/201(1A) dated 29.03.2019 arises in the second round of proceedings under the same provisions of the Act. The first order was also passed under Section 201(1)/201(1A) vide order dated 22.03.2013 pursuant to certain defaults coming to the light of the Department in the survey proceedings under Section 133A of the Act. In the second round, the AO has yet again invoked provisions of Section 201(1) & 201(1A) for default in non-deduction of TDS by the Assessee on payments made to NOIDA Authorities towards lease rents. In this regard, the ld. counsel submitted that the Hon’ble Delhi High Court in the case of Rajesh Projects (India) Pvt. Ltd. vs. CIT (TDS)-II & Ors., as reported in (2017) 78 taxmann.com 263 (Del) was called upon to adjudicate the identical issue. The Hon’ble Delhi High Court essentially observed that it is not correct to say that NOIDA Authority is not subjected to TDS provisions on lease rent and thus payer is under statutory obligation to deduct TDS under Section 194-I of the Act. Default in non deduction of TDS would consequently lead to applicability of Section 201(1)/201(1A) of the Act. The ld. counsel however in the same vain, pointed out that the Hon’ble Delhi High Court in its wisdom has restricted the applicability of the conclusion drawn with prospective effect. In the instant case, the assessment year involved is A.Y. 2012-13 whereas the judgment rendered by the Hon’ble Delhi High Court is dated 16^th February, 2017. The ld. counsel thus submitted that in his humble opinion, the default committed towards non deduction under Section 194-I prior to the delivery of the judgment requires to be viewed benignly. The ld. counsel further pointed out that the assessee acted bona fide in the light of the specific letters issued by the NOIDA Authority in English as well as in Hindi on different occasions, copy of which is placed in the paper book. As per such letters, it was communicated that NOIDA Authority is not renting the properties to allotees and the lease rent charged by NOIDA Authority do not fall within the meaning of rent under Section 194-I of the Act. The ld. counsel submitted that based on legal interpretation made by the NOIDA Authority towards non applicability of the provisions of Sectio