TDS on freight payments under section 194C(6) does not require ownership of goods carriages when PAN details are furnished.

Section 194C(6) did not require a transport contractor or cooperative transport society to own the goods carriages for TDS relief on freight payments. The reference to goods carriages was only to identify the vehicle class under the Motor Vehicles Act, while the ownership fiction in section 44AE could not be imported into section 194C(6). Where the contractor was engaged in the transport business and the prescribed PAN particulars were furnished, the payer could not be treated as an assessee in default for non-deduction of tax. The later Finance Act, 2015 amendment adding an express ownership condition confirmed that no such requirement applied earlier, and deletion of the demand under sections 201(1) and 201(1A) was upheld.

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Issues: Whether, for the purpose of section 194C(6), a transport contractor or cooperative transport society must be the owner of the goods carriages so as to avoid tax deduction at source on freight payments.

Analysis: Section 194C(6) grants relief from deduction of tax where payment is made to a contractor engaged in the business of plying, hiring or leasing goods carriages and the required PAN particulars are furnished. The reference in the provision to the definition of goods carriage is only for identifying the vehicle class by reference to section 2(14) of the Motor Vehicles Act, 1988. The ownership fiction contained in clause (b) of the Explanation to section 44AE(7) is confined to the presumptive taxation scheme under section 44AE and cannot be imported into section 194C(6). Once the contractor is engaged in the relevant transport business and the statutory particulars are furnished, the payer cannot be treated as an assessee in default for non-deduction of tax. The subsequent amendment by the Finance Act, 2015, which introduced an express ownership condition, confirmed that such a requirement was absent in the earlier provision.

Conclusion: The ownership requirement was not applicable to section 194C(6) for the relevant period, and the deletion of the demand under sections 201(1) and 201(1A) was upheld.

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