2019 (1) TMI 959 - AT - Income Tax

TDS u/s 194C - assessee has paid truck hire charges exceeding Rs. 50, 000/- each to 26 persons aggregating Rs. 18, 00, 100/- without deducting TDS u/s 194C - existence of contract between assessee and client - Addition invoking the provisions of section 40(a)(ia) - Held that - Assessing Officer simply brushed aside the submission of the assessee and held that the assessee was liable to deduct TDS u/s 194C of the Act - As find that the case of the assessee is squarely covered by the decision of Hon ble Delhi High court in the case of Hardarshan Singh 2013 (1) TMI 314 - DELHI HIGH COURT where it was held that the assessee was not liable to deduct TDS u/s 194C of the Act where it acted as a facilitator or intermediary between client and truck owner and that there was no privity of contract between assessee and client for carriage of goods. Therefore set aside the orders of the lower authorities and delete the addition - Decided in favour of assessee.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Addition for non-deduction of TDS under section 194C.

Condonation of Delay:
The appeal filed by the assessee was delayed by 275 days, seeking condonation due to the counsel's illness. The counsel fell ill and had a heart attack, leading to the delay. The Department opposed, citing precedents where delay condonation was denied. The assessee provided the doctor's prescription as evidence of illness. The Tribunal, considering the Supreme Court's decision, allowed the delay condonation, admitting the appeal for hearing.

Non-Deduction of TDS under Section 194C:
The Assessing Officer disallowed a deduction of Rs. 18,00,100 for non-deduction of TDS under section 194C. The CIT(A) upheld this decision, as payments exceeding Rs. 50,000 to truck owners were made without TDS deduction. The assessee contended that being an intermediary, no TDS was required. Citing relevant case laws, the AR argued against the disallowance. The Tribunal noted the privity of contract between the parties and the truck owners, deleting the addition and allowing the appeal.

In conclusion, the Tribunal allowed the appeal, condoning the delay in filing and deleting the addition for non-deduction of TDS under section 194C.