2015 (10) TMI 2320

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....(1A) of the I.T. Act. 2. Brief facts of the case are that the assessee is a Municipal Corporation. The assessee was deducting the TDS u/s 194C in respect of all contract payments as per the rates applicable. However, during the year under consideration, the GHMC Municipal Commissioner issued a circular on 12.11.2008 directing the DDOs of all the zones to deduct the TDS only on the contract margin of the contractors and not on the gross bills paid to the sanitation contractors. In view of the circular, the DDOs have not deducted the TDS on the amounts paid to the sanitation contractors. During the inspection conducted by the TDS Officers on the GHMC, these particulars were noticed. The AO held that as per the provisions of section 194C of t....

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....act amount liable for deduction of tax at source u/s 194C of the Act. He submitted that due to failure of the assessee to deduct tax at source and remit the same to the government account, assessee has been rightly treated as "assessee in default" u/s 201 and is also liable for interest u/s 201(1A) of the I.T. Act. 5. The ld Counsel for the assessee, on the other hand, submitted that the assessee has been engaging the members of the SHGs for carrying out sanitation work and the payments made to the SHG is nothing but the consolidated amount of all the workers put together and is not a payment made to any contractor for the work. The ld Counsel for the assessee has filed before us paper book which consists of proceedings of the assessee all....