TMI Blog2018 (10) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... ails provided in Form 15I as genuine. It is true that Shri Kishorilal Birla owned more than two trucks but for the wrong statement given by him in Form 15I the assessee cannot be penalized. The assessee being engaged in transport business and come across with hundreds of truck owners and at the time of payment when Form No.15I is received he cannot just raise doubts about the genuineness of the details mentioned therein. If the truck owners make wrong statement then the revenue authorities are free to take action against them as per provisions of law because the details on Form 15I received by the assessee are furnished to the Commissioner of Income Tax within whose area of jurisdiction the office of the contractor is situated. Thus following the Hon'ble High Court of Gujarat in the case of CIT Vs Valibhai Khanbhai Mankad [2012 (12) TMI 413 - GUJARAT HIGH COURT] are of the considered view that no disallowance was called for u/s 40(a)(ia) - decided in favour of assessee. - ITA No.299/Ind/2016 - - - Dated:- 12-10-2018 - SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER For The Revenue : Shri P.K. Mitra, Sr.DR For The Assessee : Shri Thribhu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled) is submitted to the buyer i.e. the assessee, then there is no liability to deduct the tax at source. Ld.A.O was not convinced with this submission and he went ahead making the disallowance u/s 40(a)(ia) of the Act at ₹ 22,19,660/-. 4. Aggrieved assessee preferred an appeal before the Ld.CIT(A) and gave detailed submissions along with the gists of judgments but Ld.CIT(A) was not convinced and the assessee failed to get any relief. 5. Now the assessee is in appeal before the Tribunal. 6. At the outset Ld. Counsel for the assessee submitted that Form No.15I was duly received from Shri Kishorilal Birla and he did not mentioned about the ownership of three trucks rather he gave separate 15I forms during the year mentioning that he owns only one truck. For this reason the tax was not deducted at source by the assessee. Ld. Counsel for the assessee further submitted that in the normal course of business the assessee relies on the genuineness of the documents submitted before him by the payee. It is not the assessee s responsibility to verify the documents submitted to it. The assessee cannot be penalized for action undertaken in good faith and in normal practice of bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than two trucks. However during the course of assessment proceedings Ld.A.O while going through the list of trucks vis- -vis name of truck owners observed that Shri Kishorilal Birla owns three trucks and he therefore cannot file Form 15I and therefore the assessee was liable to deduct tax at source u/s 194C which he failed to do so and therefore disallowance u/s . 40(a)(ia) was made. This view of the Assessing Officer was confirmed by Ld.CIT(A). 9. We find that there is no dispute at the end of Revenue about the genuineness of transactions and the payments made for booking/hiring truck. Now the question before us is that whether the Assessing Officer was justified in making disallowance u/s 40(a)(ia) of the Act even when the assessee has received duly filled Form 15I from the truck owners . 10. We find that Hon'ble High Court of Gujarat in the case of CIT Vs Valibhai Khanbhai Mankad (Supra) adjudicated the verbatim similar issues observing as follows; 3) We have heard the learned counsel for the Revenue as well as for the assessee. Section 194C of the Act, as is well known, pertains to payments to contractors. Sub-section (1) of section 194C, as it stood at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credited or paid before the 1 day of June, 1973, in pursuance of a contract between the contractor and a co-operative society or in pursuance of a contract between such contractor and the sub-contractor in relation to any work (including supply of labour for carrying out any work) undertaken by the contractor for the co-operative society. Explanation-For the purpose of clause(i), goods carriage shall have the same meaning as in the Explanation to sub-section (7) of section 44AE. 4) Section 40(a)(ia) of the Act, in turn, provides that certain amounts shall not be deducted in computing the income chargeable to tax under the head 'profits and gains of business or profession', namely, payments made towards interest, commission or brokerage etc., on which tax is deductible at source and such tax has not been deducted or, after deduction, the same has not been paid on or before the due date specified in sub-section (1) of section 139 of the Act. Section 40(a)(ia) of the Act, insofar as it is relevant for our purpose, reads as under:- Section 40(a)(i.):- Any interest, commission or brokerage, [rent, royalty,] fees for professional services or fees for tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 subcontractor 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 deduct tax at source would cease. The requirement of such payee to furnish details to the income tax authority in the prescribed form within prescribed time would arise later and any infraction in such a requirement would not make the requirement of deduction at source applicable und rub-section (2) of section 194C of the Act. In our view, therefore, the Tribunal was perfectly jus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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