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TMI Blog2015 (1) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... ,910/-. As noted by the Assessing Officer, the assessee has declared the total transport receipts of Rs. 4,47,20,280/- against that the assessee had debited expenses of an amount of Rs. 4,29,03,093/- under the head "Lorry Hire Charges" (LHC). On the basis of the Audit Report, it was noticed by the Assessing Officer that the assessee has not deducted the tax at source from the payment made to the drivers/owners of the lorries which were hired by the assessee. In the opinion of the Assessing Officer, the assessee should have deducted the tax at source (TDS) from the lorry hire charges paid and as the assessee has failed to make the TDS, he proceeded to make the disallowance of Rs. 4,29,03,093/- by invoking the provisions of Sec. 40(a)(ia) of the Income-tax Act. The assessee resisted the action of the Assessing Officer by relying on the few decisions but without successes. As observed by the Assessing Officer the provisions of Sec. 40(a)(ia) are applicable to the assessee and the Assessing Officer also relied on the few decisions of the other Co-ordinate Benches. The Assessing Officer, therefore, disallowed Rs. 4,29,03,093/- by invoking the provisions of Sec. 40(a)(ia) of the Act on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013) 220 taxmann 256 (Guj. H.C.). He submits that both the decisions have been followed by the ITAT, B Bench, Pune in the case of Asstt. CIT, Circle-2, Kolhapur Vs. Shri Bharat Dhanpal Patil, Sindhudurg being ITA No. 600/PN/2012 and CO No. 18/PN/2013 order dated 30-07-2013. He submits that the Merilyn Shipping & Transport (supra) is no more good law and he pleaded for following the decision in the case of Shri Bharat Dhanpal Patil, Sindhudurg (supra). We have also heard the Ld. AR. 5. In the case of Shri Bharat Dhanpal Patil, Sindhudurg (supra) the Tribunal has held as under: 3.1 Admittedly, all the payments are made on one date i.e. 30-05- 2007 that is almost after two months from the end of the financial year i.e. 31-03-2007, the date of the bills are prior to March 2007. Now the issue stands covered against the assessee by the following two decisions (i) CIT Vs. Sikandarkhan N Tunvar (2013) 33 taxmann.com 133 (Gujarat) and (ii) CIT, Kolkata Vs. Crescent Export Syndicate (2013) 33 taxmann.com 250 (Kolkata). In the case of Crescent Export Syndicate (supra) the decision of the Hon'ble Special Bench of the ITAT in the case of Merilyn Shipping and Transports 136 ITD 23 (SB) (V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it open to speculate as to the effect of the so-called representations made by the professional bodies. The Learned Tribunal held that "Section 40(a)(ia) of the Act creates a legal fiction by virtue of which even the genuine and admissible expenses claimed by an assessee under the head "income from business and profession" if the assessee does not deduct TDS on such expenses are disallowed". Having held so was it open to the Tribunal to seek to justify that "this fiction cannot be extended any further and, therefore, cannot be invoked by Assessing Officer to disallow the genuine and reasonable expenditure on the amounts of expenditure already paid"? Does this not amount to deliberately reading something in the law which is not there? We, as such, have no doubt in our mind that the Learned Tribunal realized the meaning and purport of Section 40(a)(ia) correctly when it held that in case of omission to deduct tax even the genuine and admissible expenses are to be disallowed. But they sought to remove the rigour of the law by holding that the disallowance shall be restricted to the money which is yet to be paid. What the Tribunal by majority did was to supply the casus omissus which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deductible at source under Chapter XVII -B. Once this is realized nothing turns on the basis of the fact that the legislature used the word 'payable' and not 'paid or credited'. Unless any amount is payable, it can neither be paid nor credited. If an amount has neither been paid nor credited, there can be no occasion for claiming any deduction. The language used in the draft was unclear and susceptible to giving more than one meaning. By looking at the draft it could be said that the legislature wanted to treat the payments made or credited in favour of a contractor or subcontractor differently than the payments on account of interest, commission or brokerage, fees for professional services or fees for technical services because the words "amounts credited or paid" were used only in relation to a contractor or sub-contractor. This differential treatment was not intended. Therefore, the legislature provided that the amounts, on which tax is deductible at source under Chapter XVII-B payable on account of interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services or to a contractor or sub-contractor shall not be ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T. Act, 1961. 2. The ld. CIT (A) was also not justified in rejecting appellant's claim that he has not received any notice u/s 143 (2) before the prescribed time limit. The Id. CIT (A) has confirmed that notice was issued on 18.08.2010 but not confirmed that the notice was served upon the assessee before 30.9.2010. 8. The Ld. AR submits that as per the instruction of the assessee, he is not pressing Ground No. 2. As Ground No. 2 is not pressed, the same is dismissed as not pressed. 9. The assessee is engaged in the Transport Business and hiring the Trucks. It was contended by the assessee that he was not required to deduct the tax at source (TDS) as per the applicable law i.e. 2nd proviso to Sec. 194C (3)(i) of the Income-tax Act as he has obtained the declarations from the truck owners/drivers in the prescribed form that the concerned truck owner was not having more than two goods carriers at any time during the previous year. It was further contended that the assessee has also filed return in Form No. 15J as per the provisions of Rule 29D of the I.T. Rules, 1962. It is stated that the assessee filed the copy of Form No. 15J in the office of ITO (TDS), Ajmer on 16-06-2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee has filed a copy of the Form No. 15J in the Compilation (Page No. 13). On perusal of said copy, it is seen that there is an acknowledgement of the ITO (TDS), Ajmer dated 16-06-2009. The assessee has also filed the copy of Form No. 15J which is placed at Page No. 14 of the Compilation and there is an acknowledgment of the CIT-V, Pune dated 18-07-2012 which is accompanied by the details of the trucks including the Registration of the Vehicles, Date of Registration, Name of the owner or driver and Address. In respect of the vehicles of transport of the goods as per the original Sec. 194C(3) 2nd proviso, the person responsible for paying the hire charges to the goods carriers or trucks was not required to deduct the tax at source if the declaration form the truck owner was obtained in the prescribed form that he is not owning more than two trucks in the respective years. The said provision suggest that considering the nature of the transport business, it was difficult for the person hiring the trucks in the open market, which is mobile market, to deduct the tax at source and comply with the other provisions of the TDS like furnishing of the form, filing of the return or o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of section 194C from the liability to deduct tax at source under sub-section (2) would thus be complete the moment the requirements contained therein are satisfied. Such requirements, principally, are that the subcontractor, recipient of the payment produces a necessary declaration in the prescribed format and further that such subcontractor does not own more than two goods carriages during the entire previous year. The moment, such requirements are fulfilled, the liability of the assessee to deduct tax on the payments made or to be made to such sub-contractors would cease. In fact he would have no authority to make any such deduction. 8) The later portion of sub-section (3) which follow the further proviso is a requirement which would arise at a much later point of time. Such requirement is that the person responsible for paying such sum to the sub-contractor has to furnish such particulars as prescribed. We may notice that under Rule 29D of the Rules, such declaration has to be made by the end of June of the next accounting year in question. 9) In our view, therefore, once the conditions of further proviso of section 194C(3) are satisfied, the liability of the payee to dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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