2014 (5) TMI 809

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....the outset, it is noticed that this appeal by revenue is time barred by 47 days and revenue has filed condonation petition supported by affidavit. As the reasons stated in the condonation petition was confronted to Ld. counsel for the assessee and in view of the same he fairly conceded that the delay can be condoned, accordingly, we condone the delay and appeal is admitted for hearing. 3. The only issue in this appeal of revenue is against the order of CIT(A) deleting the disallowance made by AO for non-deduction of TDS u/s. 194C(1) of the Act by applying the provisions of section 40(a)(ia) of the Act. For this, revenue has raised following two grounds: "1. On the facts and in the circumstances of the case, Ld. CIT(A) was not justified ib....

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....t Rs.15,07,810/- by invoking the provisions of section 40(a)(ia) of the Act. 5. Aggrieved, assessee preferred appeal before CIT(A), who after noting the fact that the assessee has made payment per day i.e. at every instance below Rs.20,000/- to each of the labourers and aggregating in a year less than Rs.50,000/- for each of the labourer. He deleted by observing in para 5 as under: "5. I have heard the A/R and perused the assessment order as well as materìals adduced on record. It is evident from the assessment order that the AO on going through the details of payrnent made to the labourers alleged that they were made to labour contractors wìthout deducting tax at source therefrom in violation of provìsions of sec. 19....

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.... or paid or líkely to be credited or paid during the financial year exceeds fifty thousand rupees, the person responsible for paying such sums referred to in sub-section (1) or, as the case may be, sub- section (2) shall be liable to deduct income-tax under this section:" In other words, as per clause (i) of sec,. 194C(3) of the Act, no deduction shall be made under sub-sections (1) or (2) of sec. 194C from the amount of any sum credited or paid or likely to be credìted or paid to the account of, or to, the contractor or sub-contractor, if such sum does not exceed Rs.20,000/-; whereas, as per the first proviso to sec.194C(3) of the Act, where the aggregate of the amounts of such sums credited or paid or credited or likely to ....

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....llant did not have legal liability to deduct tax at source in makjng payments of labour charges and as consequence thereof, the applicability of s. 40(a)(ia) ofthe Act becomes redundant and as such the entire amount of Rs. 15,07,810/- is therefore dìrected to be deleted. Appellant gets relief of Rs.15,07,810/-." Aggrieved, revenue came in appeal before us. 6. We have heard rival submissions and gone through facts and circumstances of the case. At the outset, Ld. counsel for the assessee Shri Somnath Ghosh, Advocate filed a copy of judgment of Hon'ble Gujarat High Court in the case of CIT Vs. Hatish Ramanlal Patel (2013) 35 Taxmann 16 (Guj), wherein it is held that "where no individual payment made to any subcontractor exceeded Rs.20....