TMI Blog2015 (10) TMI 2321X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 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. - Decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest u/s 201(1A) was also charged by him. 3. The penalty proceedings u/s 271C of the Act were also initiated by the AO and in the reply to the show cause notices issued by the AO during the course of the said proceedings, the following explanation was offered by the assessees: 'It is a local authority being a wing of Municipal Department of Govt. of Andhra Pradesh. The assessee appoints sanitation workers for cleaning the roads. All such people are recruited in groups. Each group is headed by a person. Each group is formed with one supervisor and 18 workers. . ..... Incharge of each group will be managing the work and also distribute the wages. He collects the aggregate amount of wages from the assessee and disburse the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld CIT (A) held that the relevant payments made by the assessees to each member of the Self Help Group being far below the taxable limit, there was no question of any obligation to deduct tax at source from the said payments and consequently, penalty u/s 271C was not imposable. Accordingly, he cancelled the penalties imposed by the AO u/s 271C in case of both the assessees. Aggrieved by the order of the ld CIT (A) giving this relief to the assessees, the Revenue has preferred these appeals before the Tribunal. 6. I have heard the arguments of both the sides and also perused the relevant material on record. As agreed by the ld representatives of both the sides, the issue relating to the assessee s liability to deduct tax at source fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted 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. In view of the same, we do not see any reason to interfere with the order of the CIT (A) in all these appeals . 7. The basis adopted by the ld CIT (A) in her impugned order for 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. I, therefore, respectfully follow the order of the Tribunal dated 24.04.2015 (Supra) and uphold the impugned order of the ld CIT (A) cancelling the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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