TMI Blog2022 (1) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... the year under consideration is assessment year 2014-15, hence the provision as amended by Finance (No.2) Act, 2009 shall apply. Hence position explained hereinabove shall apply. The payer is required to obtain Permanent Account Number only from the payee for paying the charges without deduction of TDS. In the present facts of the case the assessee being an individual had furnished copies of RC card extract of the vehicles owned by such lorry owners and affidavit from all the deductee s mentioning that the total income did not exceed the limit on which TDS is to be deducted for the year under consideration before the Ld.AO. AR had submitted that the errors pointed in the PAN extracted in the notice u/s 263, is mere typing mistake and that the assessee had submitted that the photocopy of the PAN before the Ld.AO as well as Ld.Pr.CIT. Thus by furnishing the PAN details, assessee met with the requirement of the law, in so far as the during assessment. In our view it is a possible view taken by the Ld.AO which cannot be found fault with. The proceedings under section 154 are deemed to be dropped can be founded with the above amendments. The action of Ld.AO cannot be termed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision of section 263 of the Act shall be attracted only when the order is both erroneous and prejudicial to the interest of revenue and since the order passed under section 143(3) of the Act was not erroneous, much less prejudicial, the invoking of section 263 was not warranted, on the facts and circumstances of the case. 8. The learned CIT was not justified on facts in appreciating that the PAN numbers filed during the course of the assessment proceedings was pursuant to making sufficient enquiries by the AO and was sufficient compliance in respect of section 194C(6) and (7) of the Act, on the facts and circumstances of the case. 9. The learned CIT was not justified in appreciating that it was not a case of not making an enquiry, rather insufficient verification of documents, which would not make the order as erroneous for invoking the provisions of section 263 of the Act, on the facts and circumstances of the case. 10. The learned CIT was not justified in appreciating the details filed before the AO and also the clarifications filed during the course of 263 proceedings to arrive at the conclusion that the order passed was erroneous and prejudicial to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the meanwhile assessee received show cause notice under section 263 of the act on 27/12/2018 proposing to set aside the order of assessment passed under section 143 (3) of the act as it was erroneous and prejudicial to the interest of the revenue. The Ld.Pr.CIT proposed that there was an error in the PAN and that PAN was obtained in subsequent year to the financial year under consideration. The Ld.CIT was of the opinion that the enquiry caused by the Ld.AO was insufficient and thus the order passed was erroneous and the judicial deal to stop revenue. The notice under section 263 of the Act read as under: On perusal of records, it is seen that - The assessee is carrying on transport business in the name of Ashok Roadlines and running retail petroleum outlet in the name of Abhishek Petroleum. In respect of transport business, the assessee has debited a sum of ₹ 3,15,61,448/ - as lorry freight charges. As payment made to transport owners falls under the ambit of provisions of section 194C of the Income Tax Act, 1961, for deduction of tax at source, at the time of payment/ credit of such income. As per records, the assessee has not deducted tax at source on payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SIDDAPPA NAGAMMANNAVAR ASZPN5493P 20.06.2013 11.07.2014 203490 11 SHARANAPPA V HADAPAI AMCPH7401A 05.07.2013 23.07.2014 88200 12 CHANDRASHEKHARAPPA KULEPPANAVAR DDRPK2981K 10.07.2013 11.07.2013 225000 13 SIKANDARSAB NADAF AYIPN0862D 10.07.2013 19.05.2015 238950 14 LOKANNA A PATIL CKTPP6053K 10.07.2013 10.10.2013 188400 15 SHARANAPPA V HADAPAI AMCPH7401A 10.07.2013 23.07.2014 190800 16 BALAPPA R DANDIN BWOPD9673D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SIDDAYYA POLICE PATIL FPXPS114 7M 16.03.2014 08.06.2014 195921 30 VEERANNA SARAGANACHARI FRCPS6178D 24.03.2014 15.07.2014 143601 31 BASAVARAJ N GUDADHA, BNPPG3961B 10.07.2013 17.05.2014 230850 Total 59,89,707 This implies that the assessee had not obtained the PAN numbers of the persons at the time of payment/ credit of freight charges. In many of the cases mentioned above, PANs have been generated after the financial year. Accordingly, from the above the assessee can't take shelter of provisions of U/s.194C(6) as there was no chance of assessee obtaining the PAN number of the person at the time of payment/ credit as the PAN numbers have been generated/ allotted subsequent to date of payment/ credit. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AMMRP3173N 18.03.2014 268716 13 HALABASAPPA S MUDAKAVI CZPM6778B 30.03.2014 236083 No verification has been carried by the Assessing Officer to ascertain the genuineness of PANs furnished and in turn the genuineness of payments. 3. It is submitted that notice issued under section 154 was not proceeded with, as the assessing officer had enquired the issues based on the submissions / details filed and came to the conclusion regarding the same. 4. Ld.AR submitted that, the Ld.AO during assessment proceedings raised specific query regarding the applicability of TDS in case of payments of Lorry, charges people different lorry owners during the course of scrutiny herring. It was submitted that assessee obtained PAN during the assessment proceedings. It was submitted that the Ld.AO made enquiries based on documents filed during the course of scrutiny assessment and therefore the order passed under section 143 (3) is neither erroneous nor prejudicial to the interest of revenue. 5. The Ld.AR sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re different. Accordingly, the issue is set aside to the file of Assessing Officer with a direction to decide the issue as per law after giving opportunity to the assessee. Since the issue is set aside to the file of Assessing Officer, the Assessing Officer is also directed to look into the aspect of furnishing of wrong PAN while framing the assessment order. Accordingly, the order passed u/s 143(3) on 06/09/2016 is set aside u/s 263 of Income Tax Act with direction to Assessing Officer to decide the issue afresh after giving opportunity to the assessee. Aggrieved by the order of Ld.Pr.CIT, assessee is in appeal before us. 7. The Ld.AR referring to page 22 of paper book submitted that the notice issued by the Ld.AO calling for various details during scrutiny proceedings in respect of the issues under consideration. The Ld.AR submitted that provisions of section 194C of the Act is not applicable to assessee and therefore no deduction was made from any sum credited or likely to be credited or paid during the previous year to the account of contractor in the course of business. The Ld.AR submitted that as following conditions were satisfied tax was not deducted on the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s amended w.e.f. 01.10.2009 by Finance (No.2) Act 2009. The its scope of amendment was explained by the CBDT in Circular No.5 dated 03-06-2010 as under:- 49.3 Provisions for payments and tax deducted at source to transporters: - A) Under Section 194C, tax is required to be deducted on payments to transport contractors engaged in the business of plying, hiring or leasing goods carriages. However, if they furnish a statement that they do not own more than two goods carriages tax is not to be required deducted at source. Transport operators are reporting problem in obtaining TDS certificates as these are not issued immediately by clients and ITA No.2586/Bang/2018 they are not able to approach the client again as they may have to move across the country for their business. B) It is, therefore, the Act has been amended to exempt payments to transport operators (as defined in section 44AE) from the purview of TDS. However, this would only apply in cases where the operator furnishes his Permanent Account Number (PAN) to the deductor. Deductors who make payments to transporters without deducting TDS (as they have quoted PAN) will be required to intimate these PAN detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paying the charges without deduction of TDS. In the present facts of the case the assessee being an individual had furnished copies of RC card extract of the vehicles owned by such lorry owners and affidavit from all the deductee s mentioning that the total income did not exceed the limit on which TDS is to be deducted for the year under consideration before the Ld.AO. The Ld.AR had submitted that the errors pointed in the PAN extracted in the notice u/s 263, is mere typing mistake and that the assessee had submitted that the photocopy of the PAN before the Ld.AO as well as Ld.Pr.CIT. Thus by furnishing the PAN details, assessee met with the requirement of the law, in so far as the during assessment. 16. In our view it is a possible view taken by the Ld.AO which cannot be found fault with. The proceedings under section154 are deemed to be dropped can be founded with the above amendments. The action of Ld.AO cannot be termed as lack of enquiry in the present facts of the case. The assessee places reliance on the below mentioned cases which enunciate the limitations of section 263 of the Income Tax Act: A. MALABAR INDUSTRIAL CO., LTD. Vs CIT [2000] 243 ITR 83 [SC] ..... X X X X Extracts X X X X X X X X Extracts X X X X
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