TaxTMI 
TaxTMI 
2016 (1) TMI 1447
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....stified 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 despite the fact tax is not required to be deducted on payments made to the 'Transporter Society', since they are contractors engaged in plying, hiring or leasing of goods carriages since covered by Sec. 194(6) of the Act. 3. That on the facts and circumstances of the case, the Ld. CIT(Appeals) was not justified and grossly erred in holding that the 'Transporter Society' is not engaged in the business of plying, hiring or leasing of goods carriages as contemplated in Sec. 194C(6). 2. Briefly 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') was conducted on 13.9.2013 at Gagal unit. The Assessing officer issued a notice u/s 131 on 13.9.2013 and the assessee was asked to produce, among ot....
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....ods carriage'. Clause (a) of Explanation to sub-section (7) of section 44AE defines 'goods carriage' and clause (b) defines 'deemed ownership' It was emphatically stated that clause (a) is applicable to both sections 194C and 44AE, however,, clause (b) is applicable only to section 44AE, since for the benefit of presumptive taxation, the assessee should not own more than ten 'goods carriages'. Accordingly, it was submitted that the contention of the ITO (TDS) that for the purpose of claiming benefit of sub section (6) to section 194C, the assessee is also required to satisfy the ownership criteria as mentioned in clause (b) to Explanation to sub section (7) of section 44AE is not as per law and, hence, untenable. 4. The Ld. CIT(A) did not accept the assessee's contentions stating that the Cooperative Society was acting as agency for procuring transport business for its members having separate juristic entity was not in the business of plying, hiring and leasing goods carriages. According to him, in fact the members, who were separate assessee, were in the business of plying goods carriages. He therefore, held that the Assessing officer was justified to treat the deductor as assess....
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....e purposes of this section, - ---------------- ` (ii) "goods carriage" shall have the meaning assigned to it in the Explanation to sub-section (7) of section 44AE;" "44AE. Special provision for computing profits and gains of business of plying, hiring or leasing goods carriages. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of 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....
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....ing Officer that for the purposes of claiming the benefit of sub-section (6) of section 194C, the appellant is required to satisfy the ownership criteria mentioned in Explanation-(b) below section 44AE(7) is not correct. 5.4 In view of the above, it is held that the Assessing Officer was not right in treating the person responsible as 'assessee in default' for 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,....