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2015 (10) TMI 2321 - AT - Income TaxPenalties u/s 271C - Non deduction of TDS u/s 194C from the payments made to the contract workers - Held that:- the issue relating to the assessee’s liability to deduct tax at source from the similar payments made to contract labourers had come up for consideration before the Tribunal in assessee’s own case for the earlier years and the same was decided by the Tribunal in favour of the assessee concuding the allotment of work by the assessee to the SHGs is not by way of contract but is engagement of workers for a fixed period. The workers are being paid as per the agreed terms and conditions and the aggregate amount is paid to the group and not to any particular person. Therefore, as rightly held by the CIT (A), there is no contractor-contractee relationship but is more in the nature of employee-employer relationship as the assessee is also making contributions to the EPF and ESI and as rightly pointed out by the ld CIT (A), the payments made to an individual is not exceeding the prescribed limit u/s 192 of the I.T. Act, the TDS provisions are not applicable to the facts of the case before us. Cancelling the penalties imposed u/s 271C thus is duly approved by the Tribunal holding that the assessees were not liable to deduct tax at source from the payments made to contract labourers who formed Self Help Groups. - Decided in favour of assessee.
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