Income Tax Appellate Tribunal - Delhi
M/S. Saan Global, Noida vs Ito (Tds), Noida on 20 August, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES 'G', NEW DELHI
Before Sh. Amit Shukla, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
ITA No. 4487/Del/2016 : Asstt. Year : 2010-11
ITA No. 4488/Del/2016 : Asstt. Year : 2011-12
ITA No. 4489/Del/2016 : Asstt. Year : 2012-13
ITA No. 4490/Del/2016 : Asstt. Year : 2013-14
ITA No. 4491/Del/2016 : Asstt. Year : 2014-15
ITA No. 4492/Del/2016 : Asstt. Year : 2015-16
M/s Saan Global, Vs Income Tax Officer(TDS),
C-56/18, Institutional Area, Noida
Sector-62, G.B. Nagar,
Noida-201301
(APPELLANT) (RESPONDENT)
PAN No. AAHFS7473A
Assessee by : Sh. S. Krishnan, Adv.
Revenue by : Sh. S. S. Rana, CIT DR
Date of Hearing: 19.08.2019 Date of Pronouncement: 20.08.2019
ORDER
Per Bench:
The appeal s are ti me barred by a peri od of 11 days. It wa s submi tted that the order of the l d. CIT(A) dated 31.05.2016 has been recei ved on 13.06.2016 and appe al s have been fil ed on 23.08.2016. The assessee has fil ed recti fi cati on appli cati on u/s 154 before the ITO for correcti on of the amount of tax demanded. It was submi tted that the assessee was under
bonafi de belief that the appeal to Tri bunal does not li e at the stage and hence the del ay. We fi nd that the del ay i s due to bonafi de reasons and the assesse e has not de ri ved or sought t o 2 ITA Nos. 4487 to 4492/Del/2016 Saan Global deri ved new benefit by fili ng bel ated appeal by 11 days. Hence, the del ay i s hereby condoned.
2. The common grounds are rai sed in all these appeal s are as under:
"That on the facts and in the circumstances of the case and in law the learned CIT(A) erred in-
(i) confirming the order passe d by the Assessing Officer u/s 201(1) and 201(1A) of the Income-tax Act, 1961 read w ith section 194C of the Act;
(ii) denying the benefit of section 194 C(6) of the Income-tax Act, 1961 by wrongly invoking Section 194C(7) of the Act without providing due and adequate opportunity of the Appellant."
3. The issue revolves around examining the provisions of Section 194C, 194C (6), 194C(7) and 201(1A) read with provisions of Section 44AE of the Act.
4. The deductor assessed is a partnership concern engaged in the business of trading in chemicals and indenting on commission basis. The Assessing Officer observed that the deductor had made following payments to the transporters which are liable to deduct the tax:
Financial Year Amount paid to
the
2009-10 6645923
2010-11 7832963
2011-12 7754312
2012-13 7414348
2010-14 11979813
2014-15 10601416
3 ITA Nos. 4487 to 4492/Del/2016
Saan Global
5. Before the Assessing Officer, it was submitted that the deductor is not deducting TDS on payments made to the transporters on the grounds that the provisions of section 194C (6) are applicable to these payments and therefore TDS on these payments are not made once the transporter submits his PAN to the deductor.
6. The Assessing Officer held that sub section (6) of Section 194C relates to only small transport operators who do not own more than 2 goods carriages. He further held that the intention of the legislature was to keep small transport operator outside the scope of T.D.S. and hence to apply the same on Medium and large transport operators was not intention of the legislature, hence any payment made to such transport operators is still within the ambit of section 194C(6) and any assessee making payment to such transport operators is liable to deduct tax at source in accordance with the provisions of section 194C(6) of the Income Tax Act.
7. The ld. CIT(A) relying on the Circular No. 5 of 2010 dated 03/06/2010 and on the Finance Act, 2015 amended the provision of sub- section 6 of section 194C w.e.f. 01/06/2015 and held that the stand taken by the Id. A.O. is not sustainable in the eyes of the law.
8. However, ld. CIT(A) held that the assessee failed to comply with the provisions of sub section 7 of section 194C which were brought on the statue by the Finance Act No.2 of 2009 and hence assessee is not eligible for the benefit of Section 194C(6) of the Act.
9. Before us, the ld. AR argued relying on the Circular No. 5 of 2010 dated 03.06.2010 para no. 49.3 which states "(A) Under section 194C, tax is required to be deducted on payments to transport contractors engaged in the business of plying, hiring or leasing goods carriages. However if they furnish a statement that they do not own 4 ITA Nos. 4487 to 4492/Del/2016 Saan Global more than two goods carriages, tax is not to be deducted at source. Transport operators are reporting, problem in obtaining TDS certificates as these are not issued immediately by clients and they are not able to approach the client again as they may have to move across the country for their business.
(B) It is, therefore, the Act has been amended to exempt payments to transport operators (as defined in section 44AE) from the purview of TDS. However, this would only apply in cases where the operator furnishes his Permanent Account Number (PAN) to the deductor. Deductors who make payments to transporters without deducting TDS (as they have quoted PAN) will be required to intimate these PAN details to the Income-tax Department in the prescribed format.
(C) Applicability - This amendment has been made applicable with effect from 1st October, 2009 and will accordingly, apply in relation to the assessment year 2010-11 and subsequent assessment years."
10. Further, we find that Section 44AE prescribes that this Section is applicable to an assessee who owns not more than 10 goods carriages at any time during the previous year and is engaged in the business of plying, hiring or leasing of such goods carriages.
11. The ld. DR, without disputing the provisions of the Act argued that the factum of the matter whether the amounts paid by the assessee to various transporters without deducting the TDS are covered under the provisions of Section 44AE of the Act or not need to be examined.
12. Hence, keeping in view, provisions of the Act, we hereby remand the matter back to the file of the Assessing Officer for the limited purpose of examining whether the payments have been made to transport contractors covered under the provisions of Section 44AE of the Act are 5 ITA Nos. 4487 to 4492/Del/2016 Saan Global not. The Assessing Officer directed to take a decision as per the provisions mentioned above after due examination. Regarding the applicability of 194C(7) of the Act since the matter is being referred back to the file of the Assessing Officer no separate adjudication on this issue is required.
13. In the result, the appeals of the assessee are allowed for statistical purpose.
(Order Pron ounced i n the Open Court on 20/08/2019).
Sd/- Sd/-
(Amit Shukla) (Dr. B. R. R. Kumar)
Judicial Member Accountant Member
Dated: 20/08/2019
*Subodh*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
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