TaxTMI 
TaxTMI 
2023 (7) TMI 240
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....f the Income Tax Act ("the Act") was amended by the Finance Act, 1995 with effect from 1st July 1995 to include Explanation III wherein for the purpose of the said Section the expression "work" included "carriage of goods and passengers by any mode of transport other than Railways". Section 194 C of the Act as amended reads as follows: "194C (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a) ....... or .................. d) any company; or ..... shall, at the time of credit of such sum to the account of the contractor or at....
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....2006 to read as follows. "rent" means any payment, by whatever name called, under any lease, sublease, tenancy or any other agreement or arrangement for the use of (either separately or together) any, (a) land; or (b) building (including factory building); or (c) land appurtenant to a building (including factory building); or (d) machinery; or (e) plant; or (f) equipment; or (g) furniture; or (h) fittings, whether or not any or all of the above are owned by the payee;" If the above provision was to be applied, the applicable tax to be deducted for the period from 2006 to 2007 would be @ 22.4% and for the period from 2007 to 2009 would be 11.2%. (e) Respondents thereafter adopted the view that the contract of C....
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....ure, fittings or any other machinery attached thereto and not for anything else like ships, transport vehicles (including railways) and freight/charter hire payments thereto. This Court further held that Explanation-III of Section 194-C of the Act, clarifies that the expression "work" means carriage of goods and passengers by any mode of transport other than by railways and for this and other reasons tax from freight payments has to be deducted under this section and not under section 194-I of the Act. The said order dated 29th June 2007 of this Court was challenged by way of a Special Leave Petition (being SLP No. 3753 of 2008) before the Hon'ble Supreme Court by Respondents. The SLP was disposed of by an order dated 14th January 2009 with....
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....ilding (including factory building); or (d) machinery; or (e) plant; or (f) equipment; or (g) furniture; or (h) fittings, whether or not any or all of the above are owned by the payee; ..." (j) In light of the above amendment, i.e., the 2009 IT Amendment, wherein the rate of tax deduction at source under Section 194-I of the Act was revised to 2%, which is the same rate as prescribed under section 194-C of the Act. (k) Therefore, for the periods from 1st October 2009 this Petition has become academic and may be disposed of. We are informed Respondents have granted a certificate for lower deduction of tax at source under Section 194-C of the Act to one of the members of Petitioner No.1 in 2016-17. If that is so, it is cl....
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....duct tax at source but also on third parties with whom the members of Petitioner no. 1 have entered into charter party, who are not even party to this Petition. These third parties who were liable to deduct tax at source could be treated as assessee in default with serious consequences for default in incorrect deduction of tax at source. (n) The period of limitation for proceedings under Section 201(1) of the Act is provided under Section 201(3) of the Act wherein a period of seven years has been prescribed. The said time period has expired and no further proceedings should be commenced or lie. (o) In light of the above, (a) Respondents be directed to clarify that in the abovementioned circumstances, no further proceedings shall be take....