TDS on lease rent to Greater Noida Authority applies prospectively; HC Dismissed All Appeals

The Delhi High Court dismissed three tax department appeals against a company, upholding ITAT orders that TDS on lease rent to the Greater Noida Development Authority applies prospectively, as rulings and the Supreme Court of India confirmation showed no difference.

The income tax department has filed three different appeals in the Delhi High Court, all against a company named Mahagun (India) Private Limited, challenging common orders dated December 15, 2023, and September 04, 2024, passed by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘E’. The impugned order had allowed the appeal of the assessee, considering the ruling in the judgement titled Rajesh Projects (India) (p.) Limited vs Commissioner of Income-Tax, given earlier by the same court.

The tax department had argued that tax should have been deducted at source (TDS) on annual lease rent paid to the Greater Noida Development Authority. However, the tribunal ruled in favour of the assessee, relying on the Delhi High Court’s judgement in the Rajesh Projects (India) (P.) Ltd. case, where the court had ruled that TDS on such lease rent would apply only prospectively, meaning from the date of that judgement onwards.

During the hearing, the high court noted that the tax department could not prove any major factual difference between the present case and the earlier Rajesh Projects ruling. Further noted that the Supreme Court has also upheld the earlier ruling through its judgement dated July 02, 2018, in the case of New Okhla Industrial Development Authority v. Commissioner of Income Tax.

Considering the aforesaid findings, the High Court rejected all three appeals filed by the tax authorities. The Court clarified that certain issues connected to the case remain open for future consideration if needed.