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TMI Blog2012 (11) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... S.V. Deshpande for the Appellant. Ms. Ann Kapthuama for the Respondent. ORDER R.S. Padvekar, Judicial Member These two appeals are filed by two different assessees challenging the impugned orders of the Ld CIT(A), Kolhapur dated 31/05/2010 and 28/05/2010 respectively for the A.Y. 2007-08. As the facts as well as the issues are common, hence, both the appeals are disposed of by this consolidated order. 2. The common issue in controversy is whether the Ld CIT(A) is justified in confirming the disallowance made by the A.O under section 40(a)(ia) of the Act in respect of the payment made to the Mathadi Board. 3. We first take up the appeal of M/s. Gokuldas Virjibhai and Company, being ITA No. 1062/PN/2010. The assessee firm is a general merchant and Commission Agent having shop in the Market Yard, Sangli. It was noticed by the A.O that the assessee had paid the labour charges of Rs. 1,97,505/- to Sangli Miraj Kamgar Mathadi Board (in short Mathadi Board). In the opinion of the A.O, payment made to said Mathadi Board was covered under section 194C(1) of the Act and as the assessee has not deducted the tax at source (TDS), the same was disallowable under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ractor of the assessee within the meaning of section 194C(1) of the Act which reads as under : "194C (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash (a) the Central Government of any State Government; or (b) any local authority, or (c) any corporation established by or under a Central, State or Provincial Act, or (d) any company; or (e) any co-operative society; or (f) any authority, constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or (g) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or (h) any trust; or (i) any university establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of ensuring an adequate supply and full and proper utilization of unprotected workers in scheduled employments, and generally for making better provision for the terms and conditions of employment of such workers the State Government may be means of scheme provide for the registration of employers and unprotected workers in any scheduled employment or employments, and provide for the terms and conditions of work of registered unprotected workers, and make provision for the general welfare in such employments. (2) In particular, a scheme may provide for all or any of the following matters that is to say - (a) for the application of the scheme of such classes of registered unprotected workers and employers, as may be specified therein; (b) for defining the obligations of registered unprotected workers and employers subject to the fulfillment of which the scheme may apply to them; (c) for regulating the recruitment and entry into the scheme of unprotected workers, and the registration of unprotected workers and employers, including the maintenance of registers, removal, either temporarily or permanently, of names from the registers, and the imposition of fees for regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions, where necessary, to suit the conditions of work of such registered unprotected works) and all matters relating thereto; (j) for the manner in which, the day from which (either prospective or retrospective) and the persons by whom, the cost of operating the scheme is to be defrayed. (k) for constituting the persons or authorities who are to be responsible for the administration of the scheme, and for the administration of funds constituted for the purposes aforesaid; (k-i) for specifying the powers and duties which the persons or authorities referred to in clause (k) may exercise or perform, for providing appeals and revision applications against the decisions or orders of such persons and authorities; and for deciding such appeals and applications and for matters incidental thereto; (l) for such incidental and supplementary matters, as may be necessary or expedient for giving effect to the purposes of a scheme. (3) The scheme may further provide that a contravention of any provision thereof shall be punished with imprisonment for such term as may be specified (but in no case exceeding three months in respect of a first contravention or six months in respect of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... punishable by a Scheme made under the said Act) shall be tried by the Labour Court. Section 17B provides for cognizance of the offence under the Act by the Labour Court. Section 18 and 19 of the Maharashtra Mathadi Act make applicable the provisions of Workmen Compensation Act 1923 and the Payment of Wages Act 1936 to the registered un-protected workers employed in any scheduled employment. Section 2(11) defines the term unprotected worker means a manual worker who is engaged or to be engaged in any scheduled employment. The definition of employer is given in section2 (3) of the Act. In sum and substance, the Maharashtra Mathadi Act is a labour welfare Legislation for protecting the interest of the un-protected unorganised manual workers such as Mathadi hamals etc., and for the purpose of regulating the terms and conditions of their employment, State Government has to make a Scheme considering the welfare, health and safety measures and for assuring the regular employment to the unprotected workers in the scheduled employment. At the end of the Act, schedule is appended in which the class or category of the employment are mentioned to which the provisions of the Maharashtra Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board within five days of every fortnight or such shorter periods as may be specified, the gross wages due to registered works for the work done by such registered workers during the fortnight and other amount due to daily registered workers. Clause 33 of the Scheme provides that the Board may permit any registered employer to pay wages and other allowances to the registered monthly workers employed by them directly. The said clause also provides that in respect of the registered workers other than registered monthly workers, the employer shall remit the wages and other allowances by cheque to the Secretary of the Board every fortnight and Secretary shall arrange to disburse the wages and other dues to the registered works on a specified day every month. Clause 14 provides for penalty, more particularly, for contravention of clauses 14, 29 and 30 of the Scheme. Clause 14 is in respect of the registration of the employers and clause 29 is in respect of prohibition on the registered employer to employ manual workers in the scheduled employment other than the registered workers who are allotted to him by the Secretary in accordance with the provisions of Clause 9(e) of the Scheme. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - on borrowed funds to Neminath Nagari Sahkari Pat Sanstha. In the opinion of the A.O, the assessee should have deducted the tax at source as per provisions of section 194A. The A.O, therefore, evoked the provisions of section 40(a)(ia) of the Act and disallowed the entire interest claimed by the assessee of Rs. 1,02,609/- for failure on the part of the assessee to deduct the tax at source. The assessee pleaded that the assessee has received Form No. 15G and even if there is a default in submitting Form No. 15G, section 40(a)(ia) cannot be evoked. The A.O has observed that in respect of the interest paid to Neminath Nagari Sahkari Pat Sanstha, declaration under section 197A(1)(ia) in Form No. 15G was given by the payee to the assessee on 10.2.2007. As observed by the A.O, the assessee did not submit the said Form to the CIT I, Kolhapur within the stipulated time. The A.O, therefore, rejected the contention of the assessee that as Form No. 15G was not filed with the CIT, Kolhapur, and hence, it is a procedural lapse and no disallowance under section 40(a)(ia) can be made. The assessee challenged the said addition before the Ld CIT(A), but, without success. 14. We have heard the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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