TMI Blog2015 (8) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein held It is not in dispute that the turnover of the assessee exceeds the monetary limit specified under clause (a) or clause (b) of section 44AB. Therefore, the liability to deduct tax arises under the said proviso to the sub-contractor from whom the vehicles are hired and the said amount payable to the sub-contractor is in excess of ₹ 20,000. Therefore, the three authorities have concurrently held that the transaction in question is a transport contract. The liability to deduct out of the money paid to the sub-contractors does arise. Immediately, TDS is not deducted and the said amount is not paid to the authorities. Therefore, the claim for deduction under section 40(a)(ia) is not attracted and the authorities were justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, 1961, and accordingly, there was no obligation on the part of the assessee to deduct tax under section 194C of the Act. 2. The assessee is engaged in the business of operation of tourist taxies. The assessee also had hired taxies from the owners, to carry on its business. The assessee had deducted tax on payments made to such taxi owners. The said TDS deduction was remitted, according to the Assessing Officer, beyond the due date. The assessee furnished the particulars of the payments made. Still the assessing authority disallowed the expenses of ₹ 6,78,28,696 under section 40(a)(ia) of the Act. 3. Aggrieved by the said order, the assessee preferred an appeal to the Commissioner of Income-tax (Appeals). It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Whether the Tribunal was correct in proceeding to examine the applicability of section 194C of the Act when the controversy was with respect to the disallowance under section 40(a)(ia) of the Act ? 6. We have heard the learned counsel for the parties. This court had an occasion to consider the said substantial question of law in the case of Smt. J. Rama v. CIT reported in [2012] 344 ITR 608 (Karn) where it was held as under (page 611) : In order to appreciate the rival contentions, it is necessary to bear in mind the admitted facts : The assessee is an individual deriving income from hiring of vehicles. Under a written agreement, the assessee is providing vehicles to one of its customers, M/s. Mahindra Transport Solution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that there was no liability to deduct tax on that score. Law does not stipu late the existence of a written contract as a condition precedent for payment of TDS. The contract may be in writing or it may be oral but the liability to pay tax arises when the recipient of the said amount receives payment in excess of ₹ 20,000. Second proviso to section 194C which is attracted to the facts of this case makes it very clear that when a individual or a Hindu undivided family whose total sales from the business or profession carried on by him in excess of the monetary limit specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed before the due date for filing the return, which is permissible in law. Unfortunately, none of the authorities have gone into this question. Therefore, it is necessary to remit the matter back to the assessing authority to find out whether the payment of TDS paid by the assessee is within the time prescribed under the law. If it is within time, then the assessee is entitled to the relief. Accordingly, we pass the following order : (a) The appeal is allowed. (b) Substantial questions of law are answered in favour of the Revenue and against the assessee. (c) The matter is remitted back to the assessing authority to find out whether TDS payment is within time and the assessee is entitled for the benefit in accordance with law. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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