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2017 (10) TMI 484 - HC - Income TaxTDS u/s 194C OR 194J - payments made by the assessee to IRCTC - non deduction of tds - disallowance under section 40(a)(ia) - whether IRCTC was not Government and that the payment was made to a contractor and therefore required deduction of tax at source in view of section 194C? - Held that:- The assessee was granted a contract by IRCTC for providing catering service for which the assessee would make payment in the nature of licence fee. According to the Revenue, on such payments, the assessee had to deduct tax at source which admittedly the assessee had not done. Under sub-section (1) of Section 194C, any person responsible for paying any sum to any resident for carrying out any work in pursuance of a contract between the contractor and the specified person is required at the time of credit of such sum in the account of the contractor or at the time of payment to deduct tax at specified rate. The Tribunal was thus right in observing that section 194C of the Act would apply in case of a payment being made by a contractor to a contractee and not vice-versa. In the present case, the payment of licence fee was made by the contractee to the contractor and therefore section 194C of the Act would not apply. In that view of the matter, we see no reason to interfere. However, this may not be seen as our confirmation of the Tribunal’s view that IRCTC was a government body and therefore also requirement of deducting tax at source did not arise or that proviso to sub-section (1) of Section 201 may have retrospective effect. We keep both these questions open.
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