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TMI Blog2018 (6) TMI 1509X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been duly performed, no disallowance was called for u/s. 40(a)(ia) of the Act. - decided in favour of assessee - I.T.A. No.431 and 432/Ahd/2018 - - - Dated:- 28-6-2018 - SHRI WASEEM AHMED, ACCOUNTANT MEMBER And SMT MADHUMITA ROY, JUDICIAL MEMBER For The Appellant : Shri Sakar Sharma , A.R. For The Respondent : Shri Prasoon Kabra, Sr. D.R. ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeals have been filed at the instance of the revenue against the separate appellate orders of the Commissioner of Income Tax(Appeals)-2 Ahmedabad [CIT(A) in short] vide appeal nos.CIT(A)- 2/169/ITO, Wd.2(1)(1)/2016-17 CIT(A)-2/358/ITO, Wd.2(1)(1)/2016- 17 dated 09.11.2017 arising in the assessment order passed under s.143(3) of the Income Tax Act, 1961 (here-in-after referred to as the Act ) dated 11.03.2016 24.01.2016 relevant to Assessment Years (AYs) 2013-14 2014-15. 2. First, we take up the ground of appeal raised by the revenue in ITA No.431/Ahd/2018 for Asst. Year 2013-14 is as under:- 1. The ld. CIT(A) has erred in law and on facts in deleting the disallowance of freight and transport expenses of ₹ 34,43,324/- made u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings, and therefore, not liable to deduct TDS u/s. 194C. Appellant has relied upon the decision of honourabe ITAT, Ahmedabad in the case of Le Modulor Pvt. Ltd. [ITA No.693/Ahd/2016] A.Y. 2012- 13 decided on 26/09/2017. 3.4 I have considered copy of sales bill and Form No.26Q filed by the appellant. The appellant has obtained PAN Number in respect of all the three transporters and filed the TDS return before completion of assessment. The Honourable Tribunal in the case of Le Modulor Pvt. Ltd. has held as under: 11. Examining the facts of the case before us in the light of the above decision of Tribunal we find that undisputedly assessee provided the PAN Number of the transporters to the Ld. AO before the completion of assessment proceedings and has therefore complied to the provision u/s.194C(6) of the act. Once the assessee make sufficient compliance to the provision of section 194C(6), requirement to deduct tax at source seized on the part of assessee. Section 194C(7) of the Act merely cast a duty on the assessee to furnish particulars of persons referred in section 194C(6) of the Act to the prescribed authority. 12. We therefore respectfully follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details of the PAN of the transporter in the quarterly TDS return. However this mistake was rectified during the course of assessment proceedings itself by way of filing a revised TDS return and the copy thereof was duly submitted before the Ld. A.O. The issue is whether in the given facts Ld. CIT(A) was justified in confirming the disallowance made u/s. 40(a)(ia) of the Act for the non compliance of provision u/s. 194C(7) of the Act. 10. We find that similar facts came up before the Co-ordinate Bench in the case of Soma Rani Ghosh (supra) where the Tribunal deleted the disallowance u/s. 40(a)(ia) of the Act by observing as follows:- 25. Next ground of disallowance stated by the learned CIT is that Sec. 194C(6) and 194C(7) are to be read together, and if after obtaining PAN from the Transporters, the requisite particulars so obtained from the Transporters are not furnished to the prescribed Authority as provided U/S 194C(7), deduction and for that matter disallowance, U/S 194C and 40(a)(ia) would get attracted. On this aspect, as indicated above a reading of provisions of Section 194C (6), prior to the amendment of by Finance Act, 2015 (w.e.f. 1-06-2015), makes it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tractor is an individual who has not owned more than two goods carriages at any time during the previous year: Provided also that the person responsible for paying any sum as aforesaid to the sub-contractor referred to in the second proviso shall furnish to the prescribed income-tax authority or the person authorized by it such particulars as may be prescribed in such form and within such time as may be prescribed: or) ( 6) No deduction shall be made from 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, [ where such contractor owns ten or less goods carriages at any time during the previous year and furnishes a declaration to that effect along with ], his Permanent Account Number, to the person paying or crediting such sum. ( 7) The person responsible for paying or crediting any sum to the person referred to in sub-section (6) shall furnish, to the prescribed income-tax authority or the person authorized by it, such particulars, in such form and within such time as may be prescribed. 27. From the above, it could be ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be made from the amount of any sum credited or paid or likely to be credited or paid to the sub-contractor during the course of business of plying, hiring or leasing goods carriages, on production of a declaration to the person concerned paying or crediting such sum in the prescribed form and verified it in the prescribed manner within the time as may be prescribed, if such sub-contractor is an individual who has not owned more than two goods carriages at any time during the previous year. ( 7) The exclusion provided in sub-section (3) of section 194C from the liability to deduct tax at source under sub-section (2) would thus be complete the moment the requirements contained therein are satisfied. Such requirements, principally, are that the sub-contractor, recipient of the payment produces a necessary declaration in the prescribed format and further that such subcontractor does not own more than two goods carriages during the entire previous year. The moment, such requirements are fulfilled, the liability of the assessee to deduct tax on the payments made or to be made to such sub-contractors would cease. In fact he would have no authority to make any such deduction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or subcontractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub- section(i) of Section 139 . Section 194C/3): No deduction shall be made under sub-section (1) or sub- section(2) from - the amount of any sum credited or paid or likely to be credited or paid to the account of or to the contractor or sub-contractor, if such sum does not exceed twenty thousand rupees: Provided that where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year exceeds fifty thousand rupees, the person responsible for paying such sums referred to in sub-s.(l) or as the case may be sub-s.(2) shall be liable to deduct incometax under this section: Provided further that no deduction shall be made under subs. (2) from the amount of any sum credited or paid or likely to be credited or paid during the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and accordingly, application of Section 40(a)(ia) would also not arise. The Tribunal, placing reliance on the judgment of the ITAT, Ahmedabad Bench, has dismissed the appeal filed by the Revenue. We agree with die said propositions and hold that filing of Form No. 15I/j is only directory and not mandatory. 31. A Coordinate Bench of this Tribunal in ITA No. 86/VIZ/2013 in the case of ITO v. Kolli Bros, dated 11.12.2013 followed the decision of the Hon'ble High Court of Gujarat in the case of Valibhai Khanbhai Mankad (supra). In the case of Mahalaxmi Cargo Movers v. ITO [IT Appeal No. 6191 (MUM) of 2013, dated 09.12.2015], another Coordinate Bench of this Tribunal reached the same conclusion while following the decision of the Coordinate Bench in the case of Valibhai Khanbhai Mankad (supra) and Sri Marikamba Transport Co. (supra), 32. It is worth noticing that in^C/7v. MohammedSuhail, Kurnool [IT Appeal No. 1536 (Hyd.) of 2014, dated 13.02.2015], the Coordinate Bench of this Tribunal specifically held that the provisions of section 194C(6) are independent of section 194C(7), and just because there is violation of provisions of section 194C(7), disallowance under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansporters to the Ld. A.O. before the completion of assessment proceedings and has therefore complied to the provision u/s. 194C(6) of the Act. Once the assessee make sufficient compliance to the provision of section 194C(6), requirement to deduct tax at source seizes on the part of assessee. Section 194C(7) of the Act merely cast a duty on the assessee to furnish particulars of persons referred in section 194C(6) of the Act to the prescribed authority. 12. We therefore respectfully following the decision of the Kolkata Tribunal in the case of Soma Rani Ghosh (supra) and given fact and circumstances of the case are of the view that section 194C(6) and 194C(7) are independent of each other and cannot be read together to attract disallowance u/s. 40(a)(ia) of the Act r.w.s. 194C of the Act. In the given case as the compliance to the provision u/s. 194C(6) of the Act has been duly performed, no disallowance was called for u/s. 40(a)(ia) of the Act. The facts of the case on hand are identical as discussed above. Therefore, respectfully, following the same we do not find any reason to interfere in the order of learned CIT(A). Hence ground of appeal filed by the Revenue is di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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