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2015 (11) TMI 266 - ITAT HYDERABAD

2015 (11) TMI 266 - ITAT HYDERABAD - TMI - TDS u/s 194C or u/s 192 - payment to Self Help Groups (SHG) - whether no contractual relationship between the payees, i.e. the Self Help Groups (SHG) and Greater Hyderabad Municipal Corporation (GHMC) and consequently payments made to the SHGs are not liable for TDS? - Held that:- TDS provisions are not applicable. See Greater Municipal Corporation, Central Zone Hyderabad [2015 (10) TMI 2320 - ITAT HYDERABAD] wherein held that it is clear that the allot .....

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ut 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 - Decided in favour of assessee. - ITA No. 161/Hyd/2015, ITA No. 162/Hyd/2015, ITA No. 163/Hyd/2015 - Dated:- 24-9-2015 - P. Madhavi Devi, JM And B. Ramakotaiah, AM For the Appellant : Shri S K Gupta, DR For the Respondent : Shri S Rama Rao ORDER Per Smt. P. Madhavi Devi, JM. All these are Revenue appeals for the A. .....

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emises in the year 2010 to verify whether the assessee local authority is adhering to the TDS provisions. During the course of inspection, it was found that the assessee has not complied with the provisions of TDS in the case of payments to Self Help Groups who, according to him are contract workers. It was further found that in a few cases, TDS was deducted but at an arbitrary rate and not as prescribed under the Act. Therefore, a questionnaire was addressed to the assessee calling for books of .....

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behalf of the assessees to the concerned Departments and therefore, there exists employe-employee relationship and the provisions of TDS are not applicable. The AO was, however, not convinced with the assessee's contentions and held that the sanitation work is being given by GHMC to SHGs and each of the group consists of 18 workers and all of them are working as sanitation workers based on the work awarded in the name of SHG by the GHMC. He observed that the Supervisors of the SHG's are .....

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e: K. Girija" and not named as an employee. He therefore, held that there is a contract between the assessee and the SHGs and the TDS is liable to be made u/s 194C of the Act from the payments made to them. Accordingly, for failure to comply with TDS provision, he treated the assessee as "assessee in default" u/s 201(1) and also levied interest u/s 201(1A) of the Act. Aggrieved, assessee preferred an appeal before the CIT (A) who granted relief to the assessee. Aggrieved by the re .....

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see's own case in ITA Nos. 512 & 513/Hyd/2014 dated 24.04.2015 has been followed to hold that the TDS provisions are not applicable. The relevant Paragraph No.6 is reproduced hereunder for ready reference: "6. Having heard the rival contentions and the relevant material on record, we find that the main issue is as to whether the SHGs can be called as contractors. The GHMC has engaged and issued the poceedings in favour of the SHGs by lots and work has been allotted per unit by fixin .....

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