2020 (2) TMI 490 - HC - Income Tax

TDS u/s 194C - payment of the freight charges to the truck owners - HELD THAT - To our mind if the AO was not satisfied with the details furnished by the assessee then he should have required the assessee to furnish the details for the entire year. Moreover, we note that the AO in the remand proceeding has not pointed out any defect in the submission filed by the assessee. Accordingly, we note that the assessee was merely acting as an agent. Accordingly, the assessee is not liable to deduct the TDS on the payment made to the truck owners. Tribunal also took support of one of its judgment in the case of ITO Vs. Andhra Roadways 2015 (7) TMI 1317 - ITAT AHMEDABAD . Ultimately, the Tribunal reached to the conclusion that the assessee has duly complied with the provisions of Section 194C of the Act by collecting the requisite 15-I Form and therefore, the assessee was not liable to deduct the TDS, on payment made to the transporters. We are convinced to the line of reasoning, assigned by the Tribunal. None of the two questions, as proposed by the Revenue, could be termed as the substantial questions of law. - Decided against revenue

Summary

Issues Involved:
1. Interpretation of Section 40(a)(ia) of the Income Tax Act, 1961 regarding non-deduction of tax under Section 194C.
2. Determination of whether the assessee was a mere commission agent.
3. Assessment of compliance with provisions of Section 194C by the assessee.

Analysis:
1. The primary issue in this case revolved around the addition of ?3,49,02,235 under Section 40(a)(ia) of the Income Tax Act due to the non-deduction of tax under Section 194C. The assessment order determined the total income, making the said addition as the assessee failed to deduct TDS on payments exceeding ?20,000 to transporters. The CIT (A) confirmed this addition, leading to an appeal before the Tribunal by the assessee.

2. The Tribunal, upon review, found that the assessee was acting as an agent and not liable to deduct TDS on payments made to truck owners. The Tribunal noted that the AO did not contest the commission income details provided by the assessee and did not point out any defects during the proceedings. Additionally, the Tribunal observed that the assessee had collected Form 15-I from the truck owners, absolving them from TDS liability.

3. The Tribunal also referenced a previous judgment in the case of ITO Vs. Andhra Roadways to support its conclusion that the assessee had complied with the provisions of Section 194C by collecting the necessary forms. Consequently, the Tribunal dismissed the Revenue's appeal, stating that the proposed questions did not constitute substantial questions of law. The High Court upheld the Tribunal's decision, affirming that the assessee had fulfilled the requirements of Section 194C, thereby dismissing the appeal.

This detailed analysis highlights the key legal issues, the arguments presented, and the rationale behind the judgment, providing a comprehensive understanding of the case.