2023 (9) TMI 29 - AT - Income Tax

Non deduction u/s 194C - non deduction of TDS on payment to transport operators - assessee contended that as the PAN of the transport company has been furnished, the assessee was on the belief that TDS was not to be deducted for the payments and relied on the provision of section 194C(6) - A.O. disregarded the submission of the assessee for the reason that para 49.3 of the explanatory Circular for Finance (No.2) Act, 2009 has amended to exempt from deducting TDS but subject to the condition that the deductors will be required to furnish the PAN details of the operators to the department in the prescribed format as per the conditions laid down u/s. 194C(7) and the assessee has failed to furnish the relevant details in the prescribed form to the concerned authority, thereby failing to comply with the provisions of section 194C(7) - HELD THAT - As assessee has already deducted and paid the said TDS amount and the revised return filed by the assessee was not considered by the lower authorities. We, therefore, direct the A.O. to allow the claim of the assessee after due verification of the facts of the payment made by the assessee. Ground raised by the assessee is allowed.

Summary

Issues involved:
The appeal challenging the order of the Commissioner of Income Tax (Appeals) regarding the Assessment Year 2011-12.

Issue 1: Adequate Opportunity Before First Appellate Authority
The assessee challenged that they were not given adequate opportunity before the first appellate authority, violating the principles of natural justice. The brief facts state that the assessee's case was selected for scrutiny, and the assessment order was passed making various additions. The assessee contended that they were given sufficient opportunity before the Assessing Officer and subsequently paid the TDS amount due. The dispute arose from the disallowance of transport charges for non-deduction of TDS under section 194C of the Income Tax Act. The Assessing Officer observed that the assessee failed to comply with the provisions of section 194C(7) by not furnishing relevant details in the prescribed form to the concerned authority. However, the Tribunal found that the assessee had already deducted and paid the TDS amount, directing the Assessing Officer to allow the claim after due verification. Consequently, the appeal was allowed on this ground.

Issue 2: Disallowance of Transport Charges for Non-Deduction of TDS
The assessee contested the disallowance of transport charges of Rs. 2,70,048 for non-deduction of TDS under section 194C of the Income Tax Act. The Assessing Officer disallowed the amount, invoking section 40(a)(ia) of the Act due to non-compliance with the provisions of sections 194(6) and 194(7). The Tribunal observed that the assessee had made payments to transport companies without deducting TDS, believing that it was not required as the PAN details were furnished. However, the Assessing Officer held that the assessee failed to furnish the relevant details as per the prescribed format, leading to non-compliance. The Tribunal, after considering the submissions and revised return filed by the assessee, directed the Assessing Officer to allow the claim after verifying the facts of the payment made. Consequently, the appeal was allowed on this ground.

Separate Judgment:
No separate judgment was delivered by the judges in this case.