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2015 (10) TMI 1489 - AT - Income TaxDisallowance u/s 40(a)(ia) with regard to Section 194C - non furnish the declaration to the income-tax authorities, within due date - Held that:- Merely because the assessee did not furnish the declaration to the income-tax authorities, within due date, which was after the date on which the assessee could have otherwise deducted tax at source, it cannot be held that the assessee made any default by not deducting the tax at source. Therefore, as the assessee was not required to deduct the tax at source as per the provisions of second proviso to sub-section (3) to section 194C, the said amount cannot be disallowed by invoking the provisions of section 40(a)(ia) of the Act. If the assessee has defaulted in furnishing the copy of the prescribed form no.15-I received by it within the prescribed time, then the consequence for that default may follow, but certainly disallowance under section 40(a)(ia) of the Act cannot be made. DR could not produce before us the copy of form no.15-I furnished by the assessee to the income-tax authorities, and nor has been able to point any material to show that the assessee was liable to deduct TDS on payment made to sub-contractors from whom it received declaration in the prescribed form. Our above view finds supports from the decision of the Hon’ble Gujarat High Court in the case of CIT Vs. Valibhai Khanbhai Mankad, (2012 (12) TMI 413 - GUJARAT HIGH COURT ) wherein it was held that once conditions in second proviso to section 194C(3) are satisfied, liability to deduct tax at source ceases and requirement of furnishing Form No.15J is not related to liability to deduct tax at source. We, therefore, delete the addition - Decided in favour of assessee.
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