TaxTMI 
TaxTMI 
2020 (11) TMI 648
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....er for violation of provisions of section 197(1) of the Act by the assessee. ii) That the Ld. CIT(A) erred in law and facts by basing his decision on a case involving section 195(1) of the Act whereas the instant case deals on the applicability of section 197(1) of the Act. iii) For that the appellant craves leave to add, alter, amend any / all of the grounds of appeal before or during the course of the hearing of the appeal." 3. Brief facts qua the issue are that during the assessment year under consideration, the assessee made payments to members of Scheduled Tribes whose incomes were exempted from payment of Income tax u/s 10(26) of the Act. The assessee also made some payments to Non-scheduled Tribes whose incomes were not exempted from payment of Income tax u/s 10(26) of the Act. During the assessment proceedings, the assessee submitted that since the Tribal Payees were not liable for income- tax, hence there was no occasion for deduction of tax at source, therefore no any addition should be made under section 40(a)(ia) of the Act. However, the assessing officer rejected the contention of the assessee and made addition under section 40(a)(ia) of the Act to....
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....o assessable, there is no question of tax at source to be deducted. The payer is not required to deduct tax at source if the amount paid is not chargeable to tax under the provisions of the Act. 7. We note that ld CIT(A) deleted the addition in respect of payments made to individuals who are specified as Schedule Tribes. The findings of the ld CIT(A) are as follows: "5.3 I have carefully considered the matter. As stated earlier, some of the payments weregiven to members of Scheduled Tribes whose incomes are exempt from payment of Income tax u/s 10(26) of the Act. Appellant's contention is that since the Tribal Payees were not liable for income- tax, there was no occasion for deduction of tax at source. However, the AO strongly relied on the decision of Hon'ble Agartala High Court in case of Chandra Mohan Sinku (Supra). Per contra, appellant relied on decision of Hon'ble Jurisdictional Tribunal in the case of Kommorah Limestone Mining Co Ltd'(Supra) and that of decision of Hon'ble Gauhati High Court in the case of Sing Killing (Supra). Hon'ble Jurisdictional Tribunal, Guwahati had occasion to deal with identical question in the case of Kommorrah L....
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.... not so assessable, there is no question of tax at source to be deducted. At reading of the above decision of the Hon'ble Supreme Court shows that the payer is not required to deduct tax at source if the amount paid is not chargeable to tax under the provisions of the Act. In the instant case, the contention of the assessee is that since the payee to whom the payments were made are tribal persons and being exempt from income tax u/s 10(26) of the Income Tax Act, he was not required to deduct tax at source either u/s,194C or u/s 194-1 of the Act from the payments made to them. No materials has been brought on record by the AO to show that the amounts paid by the assessee towards hiring of loader and excavator charges paid to Mr. L.S. Nongrum of Rs. 77,33,101/- and land rent payment of Rs. 17,57,452/- made to SmtRekhila Tynsong and Shri BhisonDokhrat, was chargeable to tax under the provisions of the Act. Therefore, in our considered view the assessee was not liable to deduct tax at source from the payments made and accordingly the AO was not justified in disallowing the payments made u/s.40(a)(ia) of the Act. Hence, we set aside the orders of lower authorities and vacate the dis....
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..../Gau/2020 wherein the grievances raised by the assessee are as follows: "1. That since the payees have disclosed the payment in the return of income there is no scope for disallowance particularly when such fact has not been controverted. 2. The disallowance sustained for Rs. 30,89,162/- due to non-deduction of tax at source may be restricted to 30% of the expenses considering to be the amendment as curative, without prejudice to Ground No.1. 3. That the cross-objector reserves the right to raise additional grounds." 10. Learned Counsel for the assessee, during the course of hearing, informs the Bench that the assessee did not want to press Ground No.2 of the Cross Objections, therefore we dismiss the ground no. 2 of cross-objections, as not pressed. 11. So far ground No.1 of Cross Objection is concerned, the ld. Counsel for the assessee submits before the Bench that the amount received by Non-Schedule Tribes have been included by the Non-Schedule Tribes in their computation of total income and return of income, and the same is getting reflected in their return of income and computation of total income, therefore the assessee should be given an oppo....