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TMI Blog2020 (12) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is bad and erroneous in law and against the facts and circumstances of the case. 2. That the learned Commissioner of Income-Tax (Appeals) erred in law and on facts in confirming the disallowance of Rs. 56,19,628/- u/s. 40(a)(ia) of the Act for non-deduction of tax at source u/s. 194C of the Act on the transportation charges paid during the year. 3. That the learned Commissioner of Income-tax (Appeals) erred in law and on facts in confirming the disallowance on the ground that the appellant did not produce the declaration from the transport contractors even though the provisions of the Act does not require the appellant to get such declaration for the period prior to 01.06.205 as amended in Finance Act, 2015. 4. That the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is an individual carrying business of Agarbatti and other trading goods. For year under consideration assessee filed its return of income on 12/10/2013 declaring total income of Rs. 20, 79, 920/-. Subsequently statutory notice under section 143 (2) was issued and assessment was completed by determining total income of Rs. 37, 09, 824/-. Notice under section 263 of the act was issued subsequently to assessee and Ld.AO was directed to verify; * Whether a sum of Rs. 57,61,508/- was actually paid to the owners of the vehicle or sub contractor's; and * Whether provisions of section 194C and (vii) were fulfilled. 3. Pursuant to the directions of Ld.Pr.CIT in the order passed under section 263 dated 21/03/2018, Ld.AO called upon assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failure of the appellant to deduct tax at source is upheld as the conditions laid down in Section 194C(6) of the Act itself are not satisfied. Considering above the grounds of appeal 3 and 4 of the appellant are dismissed and grounds of appeal 2 and 5 are partly allowed. 4.11 There is another aspect of the issue and that is the compliance of the provisions of Section 194C(7), which is an integral part of the beneficiary provision of Section 194G(6) of the Act. As per the same the person responsible for paying to transporter is required to report the particulars of payment made to transporters without deduction of tax in compliance to the provision of Sect ion 194C(6) of the Income-tax Act in the statement of deduction of tax (Form 26Q) as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxmann.com 90. He submitted that the view taken by Hon'ble Kolkata Tribunal in case of Soma Rani Ghosh vs DCIT (supra) has been followed by Hon'ble Jaipore Tribunal in case of Mangalam Housing and Developers vs ACIT in ITA No.324/JP/2018 by order dated 04/06/2018. 12. On the contrary, Ld.Sr.DR submitted that, provisions of section 194C(6) and 194C(7) are interdependent and given the fact that no TDS was deducted, disallowance made by Ld.AO under section 40(a)(ia) of the Act is correct. Ld.Sr.DR has filed written submission on 4/12/2020. 13. We have perused submissions advanced by both sides in light of records placed before us. 14. Primary issue that is to be adjudicated is regarding whether provisions of section 194C(6) has to be read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue is mentioned separately in the invoice; or (ii) on the whole of the invoice value, if the value of material is not mentioned separately in the invoice (4) No individual or Hindu undivided family shall be liable to deduct income-tax on the sum credited or paid to the account of the contractor where such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family. (5) No deduction shall be made from the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor, if such sum does not exceed 23[thirty] thousand rupees : Provided that where the aggregate of the amounts of such sums credited or paid or likely to be credited or pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. On perusal of unamended clause 6, it is clear that, if the sub contractor's have supplied their PAN to assessee in respect of hiring/leasing/of vehicles during the course of its business, then assessee shall not deduct any TDS. Thus, as per Clause 6, as it stood prior to amendment, applicable for the year under consideration, in order to get immunity from obligations of TDS, filing of PAN of payee transporter is sufficient, and no confirmation letter as required by Ld.AO is needed. 17. The need to furnish declaration from the contractor's being owners of less than 10 vehicles has been inserted by way of amendment which is effective from 01/06/2015. 18. Ld.AR in the paper book, filed Explanatory notes to the Provisions of Finance Act 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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