Sec. 44AE of Income Tax Act, 1961

[Rajan Kumar and associates]

Whether a person doesn't own Motor Vehicle, but having the same on hire/lease. is he eligible to opt Presumptive Taxation u/s 44AE?

[TANAY GHILDIYAL]

When we read Section 44AE which is a special provision for the transport and goods carriage operators. The section specifically states that any person who is in the business of Hiring, plying and leasing of goods carriage have the option to file their income tax return under this section subject to theperson owns 10 or less than 10 vehicle. Therefore any person who owns more than 10 vehicles automatically falls out the ambit of Section 44AE. This explanation is with respect to the relevance of the vehicle you own and the impact on the section 44AE by owning such vehicles.

When it comes to the question of ‘Whether ITR U/s. 44AE can be filed without owning any goods carriage” . The answer is subjective. Though the section starts with the lines “Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee, who owns not more than ten goods carriages………..” the intention of the legislature is to ease the filing of the return of income for traders engaged in the business of Hiring . leasing or plying of vehicles. Thus even though you do not own any vehicle but lets say you take vehicle on lease and carry on the business then you can avail the benefit of section 44AE.

But on strict interpretation of the section , it specifically mention that “any persons who OWNS not more than ten goods carriages …….“ thus in this case though you provide the similar services but since you do not own the vehicle , you will fall under the general provision and would not be eligible for filing of return U/s. 44AE.

The solution depends on the facts of the case and I would rather suggest you to go by normal provision rather than 44AE to file the ITR.

 

Tanay Ghildiyal

9873938771 

[Rajan Kumar and associates]

Thanks for your valuable reply. But in the Form ITR-3 we have to declare in S. No. 63 "Registration No. of the Goods Carriage" then "Whether Owned/Leased/Hired". That where my query arises. 

AI Summary

Whether hirers/lessees of goods carriages can claim presumptive taxation under Section 44AE despite not owning the vehicles Issue concerns whether a taxpayer who does not own goods carriages but hires or leases them can opt for presumptive taxation under Section 44AE. The provision refers to an assessee who 'owns not more than ten goods carriages,' creating a statutory tension: a purposive reading supports inclusion of operators who carry on hiring/plying/leasing using leased vehicles, while a strict textual reading limits the benefit to owners. Return forms requiring registration number and ownership status reflect this ambiguity. Practical resolution depends on facts and risk appetite; taxpayers should consider filing under general provisions, seek professional advice, or obtain an authoritative ruling for certainty.