TMI Blog2010 (4) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... t twice. However, the legislature has taken care to remedy this situation by providing that the sum disallowed will be allowed as a deduction in the year of payment. - ITA No.1699/Mds/2009 - - - Dated:- 16-4-2010 - Pradeep Parikh, Hari Om Maratha, JJ. Appellant Rep by: Shri K Ramagopal Respondent Rep by: Shri P B Sekaran Per: Pradeep Parikh: The assessee is in appeal before us against the order of the ld. CIT(A), dated 10.8.2009 for assessment year 2006-07. The grievance of the assessee is against the disallowance of Rs.15,98,454/- made under sec.40(a)(ia) of the Income-tax Act, 1961 (the Act) on account of non-deduction of tax at source under sec.194C of the Act. 2. The assessee firm is engaged in the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted from any payment made to a contractor in the course of business of plying, hiring or leasing goods carriages on furnishing of his Permanent Account Number (PAN). The contention was that this provision was curative in nature and it was to remove the hardship faced by transporters. Therefore, though the new section is effective from 1.10.2009, this part of the provision should be held to be operative retrospectively. The learned counsel referred to the Board s Circular No.93 dated 26.9.1972 and also to certain commentaries by Chaturvedi and Pithisaria as well as Sampath Iyengar. 4. The ld. D.R., besides supporting the orders of the lower authorities, submitted that while applying the provisions of sec.194C, relationships did not matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the original provision there was no reference specifically to carriage of goods and passengers by any mode of transport other than by railways. Therefore, the Circular of 1972 has to be considered in the light of the provision existing at that point of time. The provision that the expression work will also include carriage of goods and passengers was inserted in sec.194C by way of Explanation 3 with effect from 1.7.1995. Thus, from that date, it was specifically provided that carriage of goods would be within the expression work and hence will be liable to the provisions of sec.194C. Therefore, the reliance of the learned counsel on Circular No.73 is misplaced. He has then referred to the commentary of Sampath and Iyengar in paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed as a deduction in the year of payment. This is exactly what the CIT(A) has held and we are in agreement with it. 7. Three more arguments of the learned counsel remained to be dealt with. One is that if the payer is under a bona fide belief that no tax is deductible, it will be a reasonable cause for non-deduction of tax. Principally, we do not have any dispute over this proposition. However, nowhere it has been spelt out by the assessee as to what is the basis of such a bona fide belief. Therefore, the judgments relied upon by the learned counsel in connection with bona fide belief cannot help the assessee. The second argument of the assessee is that if the assessee acts on the advice of a legal cell and does not deduct tax, no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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