TMI Blog2024 (4) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... s provide this declaration along with their Permanent Account Number (PAN) to the payer to avoid TDS deduction. The Finance Act 2015 has approved amendment to section 194C (6) providing for deduction of tax at source unless the transporter who is engaged in the business of playing, hiring or leasing goods carriage, owns not more than goods carriages and furnishes a declaration to this effect along with PAN to the payer. The amendment is applicable from 01-06-2015. The meaning of the word owner as occurring in section 194C(6) regarding deduction of tax at source. For the purpose of section 44AE, the term owner means anyone in possession of the goods carriage and not the registered owner. This assumes importance in defining the term owns in section 194C(6) because, the taxation of the assessee transporter is squarely covered under the provisions of section 44AE. In addition we also take support of our view from the various judicial precedent on the issue and the apex court of the country has decide the question of ownership based on the intention of the legislature, namely to give benefit or to tax the assessee. Thus for the purpose of section 194C(6), the term who owns essentially m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 177/Jodh/2023. 4. Before moving towards the facts of the case we would like to mention that the assessee has assailed the appeal in ITA No. 177/Jodh/2023 on the following grounds; 1. The learned ITO (TDS), Bikaner was wrong in computing and levying amount of TDS u/s 201(1) and interest u/s 201 (1A) at Rs. 1,16,094/-. 5. Succinctly, the fact as culled out from the records is that the assessee deductor is engaged in the business of transportation logistic services. A survey u/s 133A(2A) was conducted on 09.08.2018 at the business premises of the assessee deductor for verification of compliance of provisions of Chapter XVII-B of the Income-tax Act, 1961. During the survey proceedings, it was found that the deductor has made transportation payment to various persons without deducting TDS on the basis of declarations obtained from the vehicle owners. However it is observed that in some cases transportation charges paid to the person other than owner of the vehicle on the basis of power of attorney / sahmati patra and TDS has not been made on such payments. The assessee deductor requested to provide details of transportation charges paid on the basis of power of attorney / sahamati pat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS along with interest for an amount of Rs. 1,16,094/-, the assessee preferred an appeal before the ld. NFAC. Apropos to the grounds so raised the relevant finding of the ld. NFAC is reiterated here in below: 3. Decision 3.1 During the course of appellate proceedings, notices u/s. 250 of the 1. T. Act were issued and served on the appellant through ITBA on 31.03.2021, 09.07.2021, 15.03.2022, 08.04.2022, 25.04.2022 and 18.10.2022. In the meanwhile, the NFAC had also enabled 'Communication window' to the appellant on 22.11.2022 However, the appellant complied only to the notice issued on 09.07.2021 with a request for an adjournment stating as under- On perusal of the notice it appears that various information have been asked which could not be collected in such a short period. It is therefore requested to adjourn the hearing of the case and fixed it up in the next month so that specific reply may be submitted in due course. 3.2 However subsequently the appellant failed to comply with any of these notices issued or make any submission in response to communication window enabled. Since the appellant failed to comply with any of these notices issued, in the absence of any writt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant should not be deemed to be default in respect to the deduction of tax and order should not be passed us 201(1) and 201(1) of the Act. 3.7 The appellant further submitted that section 139 of the Act clearly narrate the conditions for obtaining PAN. Several truck owners are not coming in the purview of aforesaid section. When a person is not liable for obtaining PAN u/s 139 of the I.T. Act, 1961, how can quote PAN. It means the section 194C(6) is contravening the provisions of section 139A of the IT. Act, 1961. Hence the conditions of giving PAN of truck owners u/s 194C(6) of the I.T. Act is not possible. 3.8 This submission of the appellant was not found acceptable to the A.O. As per the A.O. in view of provision of section 194C(6) of the I.T. Act, 1961, 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, only where such contractor owns ten or less goods carriages at any time during the previous year and furnished a declaration to that effect along with his PAN, to the person paying or crediting such sum. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with law. The impugned order passed by the A.O. u/s. 201(1) / 201 * (1A) of the I. T. Act dated 26.02.2019 is therefore upheld. 4. In the result, the appeal of the appellant is dismissed. 7. As the assessee did not find any favour from the order of the ld. CIT(A), the assessee preferred the present appeal on the ground as reproduced hereinabove. The ld. AR of the assessee heavily relied upon the written submissions filed before ld. CIT(A)/AO, the relevant contentions or the arguments relied upon the ld. AR of the assessee is as under:- As regard to the list of transportation payment amounting to Rs. 82,33,615/- during the financial year 2015-16 it is stated that the details of vehicle no., name of owners etc. and total payment made to each person is supplied to you and all the payment have been made through cheque which are verifiable from bank statement of assessee. The assessee has not violated the provisions of section 194C(6) of I.T. Act as there was no liability for deduction of tax. Section 194C(6) clearly states that deduction should not be made in the contractor during the course of ply, hiring and leasing good carriage and such contractor owns less than 10 good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e persons who were not the owner of the vehicle. Thus, the apple of discord before us that whether the term owns be taken essentially to mean registered owner under Motor Vehicles (MV) Act or should it be read to mean the beneficial owner? 9.1 Since the only dispute that is made by the ld. AO and confirmed by the ld CIT(A) that the assessee has made the payment based on the declaration but the person who filed the declaration were not owner of the vehicle and thus the TDS default of the assessee was considered by the ld. AO. The ld. CIT(A) has taken a view that as per provisions of section 194C(6) of the Act no TDS is required to be made in respect of the owner of the vehicle who are engaged in the business of plying, hiring or leasing goods carriage and who furnish declaration that they own ten or less goods carriages at any time during the previous year along with PAN number to the person paying or crediting such sum. It is an admitted fact that the appellant failed deduct tax at source on the payment made to the various transporters as detailed by the ld. AO. In the impugned order, who are not covered by provision u/s. 194C(6) of the Act. Therefore, it is clear that the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us judicial precedent on the issue and the apex court of the country has decide the question of ownership based on the intention of the legislature, namely to give benefit or to tax the assessee. This view which we have taken strengthen the support this view are as under : (1) Owner for the purpose of depreciation benefit The word ownership fell for the consideration of the Supreme Court in Mysore Minerals Ltd v CIT (1999) 239 ITR 775. The controversy before the Supreme Court was related to the true meaning of the word owned in section 32(1). The Apex Court held that the expression Building owned by the assessee in section 32(1) means the person who have acquired the possession over the building in his own right and uses the same for the purposes of the business or profession despite the fact that a legal title has not been passed on to him under the requirements of laws such as the Transfer of Property Act and the Registration Act, etc. The Court opined that section 32 of the Act confers a benefit on the assessee, it should be so interpreted to enable the assessee getting the benefit intended to be given by the legislature to the assessee. (2) Owner for the purpose of charge on Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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