2018 (2) TMI 1457

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....that the assessee has failed to comply the cumulative conditions specified in sections 194C(6) and 194C(7) of the Act. 3. The brief facts of the case are that the assessee, engaged in the business of trading in aromatic and other chemicals, filed its return of income on 29.09.2011 declaring income of Rs. 14,02,350/-. The assessment was completed under Section 143(3) of the Act on 24.03.2014 determining the income at Rs. 94,46,466/-. The AO, while computing the income of the assessee, disallowed Rs. 80,23,971/- representing payment made to transport agencies. According to the AO the assessee made payments to transport contractors without fulfilling the conditions laid down in sections 194(6) and 194(7) of the Act and both these provisions....

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....counsel submits that the assessee has complied with the provisions of Section 194C(6) by submitting the PAN of the contractors before the AO and there was no prescribed format or authority under the provisions of Section 194C(7) at that point of time to furnish the details. The learned counsel, referring to the notification No. 16/2011 dated 24.03.2011 submitted that the format and the prescribed authority to whom the details were to be submitted has been notified only by the above said notification and such notification was not available at the time of the payments made by the assessee. The learned counsel also relied upon the decision of the Kolkata Bench in the case of Soma Rani Ghosh vs. DCIT in ITA No. 1420/Kol/2015 dated 09.09.2016 an....

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.... has been taken by the Koklata Bench in the case of Kali Kinkar Roy (supra) wherein it has been held that sections 194C(6) and 194C(7) are independent of each other and cannot be read together to attract disallowance under Section 40(a)(ia) of the Act. While holding so the Kolkata Bench observed as under: - "8. Heard rival submissions and perused the material available on record. It is an admitted fact that since all the payees submitted their Permanent Account Numbers in the assessment proceedings. The provision contemplated in Sec 194C(6) permits no deduction of TDS shall be made u/s. 194C(1) if the payee furnishes PAN to the payer. We find that the requirement of Section 194C(6) of the Act submission of Permanent Account Number ....

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....ccordingly, the impugned addition made thereon shall go and thus, ground no's 2 and 3 raised by the Assessee are allowed." 8. Similar view has been taken by the Nagpur Bench in the case of Manikgarh Cement (supra). It has been held that if the assessee complies with the provisions of Section 194C(6) disallowance under Section 40(a)(ia) does not arise just because there is violation of provisions of Section 194C(7) of the Act. Respectfully following the said decision we hold that both the sections, i.e. Section 194C(6) and Section 194C(7) are independent of each other and cannot be read together to attract disallowance under Section 40(a)(ia) r.w.s. 194C of the Act. 9. On a perusal of the assessment order we find that the assessee made....