9911796707
TMI Blog2019 (12) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... id a sum of Rs. 14.95 crores as transport charges. The assessee obtained Permanent Account Number (PAN) of M/s SFIC Logistics P Ltd and accordingly it did not deduct tax at source from the payments made to the above said company. The case of the assessee was that it is not required to deduct tax at source in terms of sec.194C(6) of the Act, if it obtains PAN of the payee. It is pertinent to note that the provisions of sec.194C(6) has undergone change from time to time. The applicable provision for the year under consideration reads as under:- "194C(6) No deduction shall be made for any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting the sum." 3. The AO noticed that the expression "Goods Carriage" used is sec. 194C(6) of the Act, has been defined as under in the Explanation to sec.194C:- "Goods Carriage" shall have the meaning assigned to it in the explanation to sub-section (7) of section 44AE. The AO noticed that the provisions of sec.44AE is a special prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Ld CIT(A) also took the view that the provisions of sec.194C(6) shall apply only to those transport operators who are covered by the provisions of sec.44AE of the Act. The Ld CIT(A) also expressed the view that the provisions of sec.194C(6) shall apply only to individual owners of goods carriages, since the expression "his Permanent Account Number" is used in sec.194C(6) of the Act. 5. The Ld CIT(A) further noticed that the provisions of sec.194C(6) has been amended w.e.f. 1.6.2015 by Finance Act, 2015 restricting the applicability of this provision to those transport contractors who own not more than 10 goods carriages. The purpose of amendment was explained by the CBDT in its Circular No.19/2015 dated 27-11-2015 as under:- 43.2 The Finance (No.2) Act. 2009 substituted e:'!ion 194( of the Income-tax Act with effect from 1.10.2009, which inter alia provided to: non- deduction of tax from payments made to the contractor during the course of plying. hiring and leasing goods carriage if the contractor furnishes his Permanent Account Number (PAN) to the payer. The memorandum explaining the provisions of Finance (No.2) Bill, 2009 indicates that the intention was to exempt on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carriages later in the previous year, the payer shall not be required to deduct tax from the payment made to the transporter during the period of the previous year when he was not mining more than ten goods- carriages. However, the tax shall be required to be deducted from the payment made during that part of the previous year during which the transporter owned more thou ten goods carriages." Accordingly the Ld CIT(A) took the view that the amendment was made in sec.194C(6) by Finance Act, 2015 in order to remove ambiguity in the provision of sec. 194C(6). The Ld CIT(A) also took support of the decision rendered by Hon'ble Supreme Court in the case of Commissioner of Customs (Import), Mumbai vs. M/s Dililp Kumar and Company & Ors (Civil Appeal No.3327 of 2007 dated July 30, 2018 - (2018-TIOL-302-SC-Cus-CB) to observe as under:- "....while discussion the issue of interpretation of exemption provisions, the Constitution bench of the Hon'ble Supreme Court held that a provision giving benefit to the assessee needs to be interpreted strictly and in case there is an ambiguity in the provision, which is subject to strict interpretation, the benefit of such ambiguity cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson paying or crediting such sum. 194C(7) The person responsible for paying or crediting any sum to the person referred to in sub-section (6) shall furnish, to the prescribed income tax authority or the person authorized by it, such particulars, in such form and within such time as may be prescribed." As per Explanation (ii) "goods carriage" shall have the meaning assigned to it in the Explanation to sub-section (7) of section 44AE." 8. Thereafter, Finance Act 2015 amended section 194C(6) w.e.f. 1.6.2015, by substituting words "on furnishing of" (highlighted above) with the following words:- "where such contractor owns ten or less goods carriages at any time during the previous year and furnishes a declaration to that effect along with". 9. A careful perusal of the above said provisions as amended from time to time, following position emerges: - (a) Up to 30.09.2009, tax at source need not be deducted from the payments made to the goods transport subcontractor, if the payee is an individual who has not owned more than two goods carriages at any time during the previous year. (b) From 1.10.2009 onwards and up to 31.5.2015, no deduction is required to be made fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has expressed its view as under:- "24...... The Circular, while referring to the amendment in section 194C(6) made it plaintly clear that from the A.Y. 2010-11 onwards, by virtue thereof when Transport Operator furnish their PAN to the person responsible for making payments to them, the Transport Operators would be outside the purview of TDS u/s 194C. Needless to say that subject to compliance with provisions of section 194C(6), immunity from TDS under sec.194C(1) in relation to payments to transporters, applies transporter and non-transporter contractees alike. 25. Next ground of disallowance stated by the learned CIT is that Sec.194C(6) and 194C(7) are to be read together, and if after obtaining PAN from Transporters, the requisite particulars so obtained from the Transporters are not furnished to the prescribed Authority as provided u/s 194C(7), deduction and for that matter disallowance, u/s 194C and 40(a)(ia) would get attracted. On this aspect, as indicated above a reading of provisions of Section 194C(6), prior to the amendment of by Finance Act, 2015 (w.e.f. 1-06- 2015), makes it clear that during the relevant Assessment year, if the sub-contractors have supplied t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub- section(i) of Section 139". Section 194C/3): No deduction shall be made under subsection (1) or sub- section(2) from - (i) the amount of any sum credited or paid or likely to be credited or paid to the account of or to the contractor or sub-contractor if such sum does not exceed twenty thousand rupees: Provided that where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year exceeds fifty thousand rupees, the person responsible for paying such sums referred to in sub-s.(l) or as the case -ray be sub-s.(2) shall be liable to deduct income-tax under this section: Provided further that no deduction shall be made under subs. (2) from the amount of any sum credited or paid or likely to be credited or paid during the previous year to the accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Section 40(a)(i would also not arise. The Tribunal, placing reliance on the judgment of the ITAT Ahmedabad Bench, has dismissed the appeal filed by the Revenue. We agree with die said propositions and hold that filing of Form No.151/j is only directory and no: mandatory." 31. A Coordinate Bench of this Tribunal in ITA No. 86/VIZ/2013 in the case of ITO - /vs.- Kolli Brothers, order dated 11.12.2013 followed the decision of the Hon'ble Hiç Court of Gujarat in the case of Valibhai Khanbhai Mankad (supra). In the case of M/s Maha!axmi Cargo Movers -vs.- ITO in ITA No. 6191/MUM/2013, order date: 09.12.2015, another Coordinate Bench of this Tribunal reached the same conclusion while following the decision of the Coordinate Bench in the case of CIT -vs.- ValibKhanbhai Mankad (supra) and CIT -vs.- Sri Marikamba Transport Co. in ITA No. 553: 2013 reported in 379 ITR 129 (Karn.). 32. It is worth noticing that in ACIT -vs.- Mr. Mohammed Suhail, Kurnool in ITA No. 1536.Hyd/2014, order dated 13.02.2015, the Coordinate Bench of this Tribunal specifically held that the provisions of section 194C(6) are independent of section 194C(7), and just because there is violation o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
