Assessee wins appeal on TDS u/s 194C non-deduction after proper transporter declaration with PAN

ITAT Jodhpur allowed the assessee's appeal regarding TDS u/s 194C non-deduction. The tribunal held that for section 194C(6) purposes, "owner" means possessor of goods carriage, not necessarily registered owner under Motor Vehicles Act. Since the assessee obtained proper declaration from transporter along with PAN, and made payments to the person who filed declaration, no TDS liability arose. The tribunal emphasized that ownership determination depends on legislative intent and practical possession rather than formal registration.

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Issues involved:
1. Computation and levy of TDS under section 201(1) and interest under section 201(1A).
2. Validity of declarations obtained from vehicle owners for non-deduction of TDS under section 194C(6).

Summary:

Issue 1: Computation and Levy of TDS and Interest
The assessee, engaged in transportation and logistics services, was subjected to a survey under section 133A(2A) on 09.08.2018, revealing non-deduction of TDS on payments made to transporters based on declarations from vehicle owners. The Assessing Officer (AO) issued a show cause notice under section 201(1)/(1A) and subsequently raised a demand of Rs. 1,16,094/- for non-compliance with section 194C(6). The AO concluded that the declarations were invalid as they lacked the vehicle owners' PANs, thus holding the assessee in default under sections 201(1) and 201(1A).

Issue 2: Validity of Declarations under Section 194C(6)
The assessee argued that payments were made to authorized persons (drivers or relatives) on behalf of truck owners, supported by power of attorney and declarations. The assessee contended that section 194C(6) does not mandate PAN submission by vehicle owners if they are not liable to obtain one under section 139A. However, the AO and NFAC rejected this argument, emphasizing that declarations must be from vehicle owners with their PANs.

Tribunal's Findings:
The Tribunal noted that the term "owns" in section 194C(6) should be interpreted as "possesses," aligning with the intent to provide benefits to transporters. The Tribunal referenced section 44AE, which defines "owner" as anyone in possession of a goods carriage, and supported this interpretation with judicial precedents where beneficial ownership was considered over legal title. Consequently, the Tribunal concluded that the assessee's declarations were valid, as they met the requirement of possession rather than registered ownership.

Conclusion:
The Tribunal allowed the appeals, setting aside the AO's demand and interest computation. The decision in ITA No. 177/Jodh/2023 was applied mutatis mutandis to ITA Nos. 178 to 180-Jodh-2023, resulting in all four appeals being allowed. The order was pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963.

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