TaxTMI 
TaxTMI 
2010 (4) TMI 852
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee firm is engaged in the business of transportation and it returned a total income of Rs.3,96,540/-. In the course of assessment proceedings, it was noticed that the assessee had paid a sum of Rs.15,98,454/- to Smt. Amirthammal as hire charges and no tax was deducted at source therefrom. The explanation of the assessee was due to his own ill health, the transport orders were executed to his wife, Smt. Amirthammal and therefore, no TDS was deducted. The Assessing Officer did not accept the contention of the assessee and made the impugned disallowance. The CIT(A) noted that the assessee has paid the TDS amount of Rs.22,825/- to the Government on 5.8.2009 and has also filed the copies of challans in support of the same. He therefore,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of sec.194C, relationships did not matter and if the sum was liable to TDS, the same should be deducted. 5. We have duly considered the rival contentions and the material on record. Firstly, we are not able to comprehend the argument of the learned counsel that hiring of vehicles has nothing to do with the business of the partnership. As per the material on record, the assessee firm is a transport contractor. The submission before the Assessing Officer was that Smt. Amirthammal is the wife of one of the partners of the assessee and due to poor health of that partner, the orders were executed by Smt. Amrithammal. In other words, the orders which were supposed to be executed by the assessee firm, were executed by the wife of a partner whi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....commentary of Sampath and Iyengar in paragraph 14 on page 9530 (Vol.6, 10th Edition). It is true that the paragraph starts by saying that sec.194C is not applicable to contracts for mere carriage of goods which do not include any other services like loading or unloading. However, the same paragraph mentions later that before amendment in 1995, sec.194C was not applicable to transport contractors, meaning thereby that after the amendment, it is applicable. Therefore, considering the legal position as it is applicable to the year under consideration, we are of the view that the assessee was liable to deduct tax at source from the payment made to Smt. Amrithammal. 6. Another argument taken by the learned counsel is that where the payee has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of a legal cell and does not deduct tax, no penalty is leviable. For this proposition, the learned counsel has relied on the judgment of the Supreme Court in the case of T. Ashok Pai v. CIT 292 ITR 11. The fact in that case was that the assessee had relied on the legal cell of his banker viz., Syndicate Bank and the advice given by the Bank was found to be incorrect. In this context, inter alia, the Court held that penalty was not leviable. In the present case, admittedly, the assessee did not deduct tax on the basis of the advice given by its own legal cell. Its own legal cell cannot be divorced from the assessee itself and it has to be considered that the assessee itself believe that no tax is deductible. But as mentioned earlier, there....