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TMI Blog2019 (5) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... comply with the provisions of Sec.194C(7) of the Act and that reason has also been held to be not correct in the aforesaid decision and the view taken is that if the assessee complies with the provisions of section 194C(6), disallowance under section 40(a)(ia) does not arise just because there is violation of provisions of section 194C(7) of the Act. CIT(A) was justified in deleting the addition made by the AO. We find no grounds to interfere with the order of CIT(A) and consequently dismiss this appeal by the Revenue. - ITA No. 2094/Bang/2017 - - - Dated:- 26-4-2019 - Shri N.V. Vasudevan, Vice President And Shri Jason P. Boaz, Accountant Member For the Appellant : Shri Pradeep Kumar, CIT For the Respondent : Shri V. Srinivasan, Advocate ORDER PER N V VASUDEVAN, VICE PRESIDENT : This is an appeal by the Revenue against the order dated 20-04-2017 of the Commissioner of Income Tax (Appeals)- Davangere, relating to Assessment Year 2012-13. 2. The only issue that arises for consideration in this appeal by the revenue is as to whether the CIT(A) was justified in partly delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing income on account of transport charges should be disallowed and added to total income of assessee u/s. 40(a)(ia) of the Act. 5. The assessee submitted that it had obtained declaration from all the transporters who were engaged for the purpose of transportation to the effect that the sum in question was paid to them in the course of their business of plying goods carriages along with their PAN. According to the provisions of section 194C(6) of the Act, if such a declaration is obtained, a person making payment need not deduct tax at source. After the amendment by Finance Act, 2015 w.e.f. 1.6.2015, the declaration to be given by the contractor should be that he owns 10 or less goods carriages during the relevant previous year. Such declaration is not required for the AY 2012-13 which is the assessment year in this appeal. In this appeal, a mere declaration by the transporter that he is in the business of plying goods carriages is enough. It is undisputed that that such declaration was obtained by the assessee. U/s. 194C(7) of the Act, the assessee who is a person making payment has to furnish to the prescribed income tax authority, a declaration giving particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 64,860 3,73,751 Lorry Freight details to be uploaded 6,58,91,822 Less: Lorry freight details uploaded 5,59,87,215 Balance details not uploaded 99,04,607 6c. In the instant case, the appellant is not carrying on transportation business, further CBDT vide Circular No. 19/2015 dated 27/11/2015 has clarified that, deductor doing any business can make payment towards plying/hiring/leasing of transport vehicle without deducting tax by obtaining PAN. Following Board s Circular, it is held that TDS should have been made on transportation charges of ₹ 99,04,607/- whose details have not been uploaded in the e-TDS statement. Therefore, disallowance u/s. 40(a)(ia) to the extent of ₹ 99,04,607/- out of ₹ 6,62,65,573/- is sustained. Thus, the ground is partly allowed . 8. Aggrieved by the order of CIT(Appeals), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that on the Contractor undertaking Transport of Goods in course of his Transport Business, furnishing PAN to the person making such payment/credit, the payee shall not be required to effect TDS from such payment to the Transporter. On furnishing the PAN No. from the recipient Transporter- Contractor, the immunity from making TDS under sec. 194C(1) shall be available to all payers by virtue of 194C(6), in relation to all Goods Transport Charges irrespective of the fact, whether it was under a Contract or a Sub-contract. 24. We wish to refer profitably to Para No. 49.3 of CBDT Circular No. 05 2010 F.No.142/13/2010-S0 (TPL), dated 3rd June, 2010 (Explanatory Notes on Finance Act (No.2) 2009), where under the PAN based immunity and exemption from making TDS to Transporters was extended in all Transport contracts. 49.3 Provisions for payments and tax deducted at source to transporters Under Section 194C, tax is required to be deducted on payments to transport contractors engaged in the business of plying, hiring or leasing goods carriages. However if they furnish a statement that they do not own more than two goods carriages, ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 2015 (w.e.f. 01-06-2015), the expression 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 was substituted in the place of on furnishing of thereby introducing the requirement of the declaration to the effect indicated by the amendment. Therefore, under Sec. 194C(6), as it stood prior to the amendment in 2015 in order to get immunity from the obligation of TDS, filing of PAN of the Payee-Transporter alone is sufficient and no confirmation letter as required by the learned CIT is required. 26. On the aspect of observation of the learned CIT that Sections 194C(6) and Section 194C(7) have to be read together to extend the immunity from TDS, our attention is drawn to the fact that though the Finance Act, (No.2) 2009 introduced, inter alia, Sec. 194C(6) and 194C(7), similar and analogous provision had been very much in existence under proviso 2 and 3 to Section 194C(3) of the Act. Placing such provisions in juxtaposition in the following chart makes it clear that they are very much analogous and the difference is that only in respect of requirement of a decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been introduced as to the procedure by replacing declaration with the words Permanent Account Number as the thing to be obtained from the Transporter. We are, therefore, inclined to hold that the provisions of Section 194C(6) and 194C(7) are similar to the Proviso (2) and (3) of the pre-amended Section 194C(3), and on this premise we shall proceed to examine whether Section 194C(6) and 194C(7) are to be read together to invoke provisions under section 40(a)(ia) of the Act. 28. After drawing an analogy between the pre-amended proviso between Clause (2) and Clause (3) of section 194C(3) and the present amended section 194C(6) and 194C(7), Learned AR submitted that even on earlier occasions when the declaration obtained in Form 15 I ( requirement similar to the PAN particulars under Sec.194C(6)) obtained from the Transporter under Second Proviso is not submitted in Form 15J to the Commissioner of Income Tax in Form 15J (requirement similar as is provided under the third proviso and equivalent to the requirement Sec. 194C(7), the Department made attempts to make additions, but such additions have been deleted and rendered invalid. He submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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