TaxTMI 
TaxTMI 
2016 (9) TMI 1250
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....1/201(lA)of the Act? 2. Whether on the facts and circumstances of the case, the Ld.CIT (A) is justified in not appreciating that the phrase in section 194C (6) "during the course of plying, hiring and leasing of goods carriages" does not apply to contractor only but to both the parties i.e. Principal as well as contractor? 3. Whether on the facts and circumstances of the case, the Ld.CIT(A) is justified in holding that only contractor should be in the line of business of plying, hiring and leasing of goods carriages whereas the section 194C(6) nowhere mention that only contractor should be in the business of plying, hiring and leasing of goods carriages? 4. Whether on the facts and circumstances of the case the Ld.CIT(A) is justified ....
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....egistered under the Companies Act, 1956 and is engaged in the business of manufacturing of Cotton Yarn, Denim Fabrics and allied activities having its manufacturing facilities at Yavatmal and Captive power plant. The transportation of raw material and consumables from vendors to factory premises are made through various road transporters. The company has not deducted tax at source (TDS) from the payments made to such transporters who have furnished their Permanent Account Number (PAN) in view of provisions of sub-section (6) of section 194C of the Act. 4. There was a survey in the assessee's premises and it was enquired as to why TDS has not been deducted at source from payments made to the transport operators. The assessee responded as un....
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....x on transport contractor who has submitted Permanent Account Number. Thus there is no noncompanies of TDS provisions by us while making payments to transport contractor u/s 194C of the Income-tax Act, 1961." However, the AO was not satisfied. He held that the deductor should be in the business of plying, hiring or leasing goods carriage for the benefit of section 194C(6) to be available. The Assessing Officer concluded as under : " Section 194C(6) has been introduced from 01.10.2009 replacing the second Proviso to Section 194C(3)(i) of the Income Tax Act, 1961. Prior to the amendment the position was that, if any person during the course of plying, hiring or leasing goods carriages makes payment to a subcontractor, then TDS need not be ....
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....wns ten or less goods carriage at any time during the previous year and furnishes a declaration to that effect along with". The amendment does not alter any position with regards to status of transport operator as a recipient of transport charges for 6.8 With this amendment and clarification it is abundantly clear that nondeduction of tax while making payment to transport operators for transport charges w.e.f. 1-10-2009 is absolutely as per the provisions of section 194C (6) and there cannot be any default in this regard if the PAN of transporter has been collected and reported by the deductor. 6.9 Therefore, the interpretation of Ld. ITO while treating the appellant as "assessee in default" for non deduction of tax while making freight p....
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....s CIT 293 ITR 226, JagranPrakashan Ltd Vs. DCIT 21 taxmann.com 489 and Agra ITAT judgment in the case of Allahabad Bank Vs. ITO bearing ITA Nos.448 to 454/ Agra /2011." 6. Against the above order the Revenue is in appeal before the ITAT. 7. I have heard both the counsel and perused the records. In this regard I may gainfully refer to section 194C(6) as under : " No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, [where such contractors own ten or less goods carriages at any time during the previous year and furnish a declaration to that effect along with] his Permanent....