TaxTMI 
TaxTMI 
2016 (2) TMI 1280
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....rrying out transportation work. 2. That on the facts and circumstances of the case, the Ld. CIT(Appeals) was not justified and grossly erred in confirming the action of the ITO(TDS) in treating the appellant as assessee in default for non deduction of tax u/s 194C on payments made to the Himachal Pradesh Road Transport Corporation (HRTC) without appreciating the fact that the same is a trust registered u/s 12A of the I.T. Act. 4. Briefl y stated, the facts of the case are that the assessee is a Public Limited Company engaged, inter alia, in the business of manufacture and sale of cement and as a part thereof is also engaged in generation of power and developing, operating and maintaining infrastructure facilities. In these cases, TDS survey / inspection u/s 133A of the Income-tax Act, 1961 (in short 'the Act') u/s 133A of the Act was conducted against the assessee vide notice 5.10.2014. Thereafter, spot inspection / verification us/ 133A was conducted on 7.12.2012 at Suli and Rauri unit. A Summon u/s 131 of the Act was issued to the assessee requiring it to produce details and evidence of expenses on which it was liable to deduct tax. Subsequentl y, a show cause notice w....
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....l, Ld. Counsel for the assessee pointed out that the issue is squarel y covered in favour of the assessee by the decision of this Bench of the Tribunal dated 29.01.2016 passed in the case of M/s ACC Limited, Barmana v ITO, Palampur in ITA Nos. 634 to 637/Chd/2014 relating to assessment years 2010-11 to 2013-14 . He, therefore, submitted that in view of the order of the Tribunal referred to above, the order of CIT(A) may be set aside and the appeal of the assessee be allowed. 6. On the other hand, Shri Jatinder Kumar, Ld. DR strongl y supported the orders of the lower authorities. 7. After considering the rival submissions, we may observe here that this Bench had occasion to decide a similar issue in the case of M/s ACC Limited, Barmana Vs. ITO, Palampur in ITA Nos. 634 to 637/Chd/2014 relating to assessment years 2010-11 to 2013-14 vide order dated 29.1.2016, observing as under:- "5. We have heard the rival submissions. It is relevant to observe here that we had decided a similar issue in the case of ACIT (TDS), Chandigarh Vs. M/s ACC Limited (Chandigarh Sales unit), Chandigarh in ITA Nos. 651 & 652/Chd/2015 vide order dated 29.10.2015 for the assessment years 2012-13 and 2013-....
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....f an assessee, who owns not more than ten goods carnages at any time during the previous year and who is engaged in the business of plying, hiring or leasing such goods carriages, the income of such business chargeable to tax under the head "Profits and gains of business or profession" shall be deemed to be the aggregate of the profits and gains, from all the goods carnages owned by him in the previous year, computed in accordance with the provisions of sub-section (2). --------------- Explanation - For the purposes of this section,- (a) the expression "goods carriage" shall have the meaning assigned to it in section 2 of the Motor Vehicles Act, 1988 (59 of 1988); (b) an assessee, who is in possession of a goods carriage, whether taken on hire purchase or on installments and for which the whole or part of the amount payable is still due, shall be deemed to be the owner of such goods carriage." 5.1 From the above provisions, it is evident that for claiming benefit of provisions to section 194C(6), following conditions have to be satisfied: * The contractor should be in the business of plying, hiring or leasing of goods carriage. * The term 'goods carriage' is a....
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....or not deducting tax on the payments made to the Society and the demand created u/s 201(1)/ (1A) is accordingly deleted. Grounds of appeal taken by the appellant are allowed." 6. The Revenue challenged the order of CIT(A) Chandigarh in appeal before this Bench of the Tribunal and the Tribunal vide its order dated 29.10.2105 upheld the order of the CIT(A), observing as under:- "6. We have heard the rival submissions and have also perused the materials available on record. The Ld. CIT(A) has reproduced the provisions of section 194C(6) read with Explanation (ii) to section 194C of the Act in his order. On perusal of these provisions it is clear that following conditions are required to be satisfied for claiming the benefit of section 194C(6) of the Act:- i) The contractor should be engaged in the business of plying, hiring or leasing goods carriage. ii) The contractor shall furnish its PAN No. to the deductor iii) The deductor furnishes before the I.T. Authorities the details of amount paid to the contractor iv) Goods Carriage shall have the same meaning as assigned in Section 2(14) of the Motor Vehicle Act, 1988 Before us, the assessee has submitted a photocopy of the ....
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....t made to transport contractors would be applicable only if the transport contractor owns ten or less goods carriages at any time of the previous year and a declaration to this effect is furnished. In our opinion, the Legislature has intentionally inserted the ownership condition for claiming the benefit of non deduction of tax which was not existing in the erstwhile section 194C(6) of the Act. In view of the above discussion, the assessee (Person responsible) cannot be treated as 'assessee in default' for not deducting tax on the payments made to the Bilaspur District Truck Operators Co-operative Society thus, we do not find any infirmity in the order of CIT(A) and accordingly we uphold the same. The appeal of the Revenue is dismissed." 7. The facts of the present case are similar to that of M/s ACC Limit (Chandigarh Sales Unit), Chandigarh. It is observed that the CIT(A) Chandigarh while deciding the case of M/s ACC Cement Ltd (Chandigarh Sales Unit), Chandigarh (supra) has deleted the demand created by the Assessing officer u/s 201 and 201(1A) of the Act. However, the CIT(A), Shimla while deciding the assessee's case relating to Gagal Cement Works has upheld the de....
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....mption u/s 11 and since the HRTC income is exempted, on their request the TDS u/s 194C was not done. The appellant has also drawn attention the provisions of section 190 (1) of the Act which creates a charge for deduction of tax at source. The appellant submitted that TDS is required to be deducted from any income on which the tax is payable since the income of HRTC is exempt so the question of deduction of tax does not arises. 6.3 After considering the rival submissions it is noted that the appellant's submissions is contrary to the provisions of section 190(1) and misplaced, The section nowhere provides that tax is not deductible at source in case of any exempt income. The provision u/s 190(1) is that the tax on income shall be payable by deduction at source. It does not say that tax is to be deducted on 'taxable income'. Further, the taxability of income or exemption u/s 11 is subject to various conditions and subject to assessment of income by the Assessing Officer. So the deductor cannot assume that since HRTC is registered as a trust for charitable purpose its income is non-taxable. The only provision available for lower rate of deduction or no tax deduction is ....