ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, BHARATPUR V. M/S ARIHANT TRADING CO., BHARATPUR

ITA 1113/JPR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1414 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 26-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 40(a)(ia); 194C; 234E; 13; 119; 20

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1113/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2015-16 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE- BHARATPUR CUKE VS. M/S ARIHANT TRADING CO. PAHARI, TEHSIL-PAHARI DISTT.- BHARATPUR (RAJ.) LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABAFA5260D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI K. C. GUPTA (JCIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P. C. PARWAL (CA) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 04/02/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 19/03/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)- 22, ALWAR DATED 24.07.2018 WHEREIN THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS U/S 40(A )(IA) R.W.S 194C OF THE IT ACT ON ACCOUNT OF FREIGHT EXPENSES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING EXPENDITURE IN RESPECT OF FREIGHT CHARGES AS PROVISIONS OF SECTION 194C(6) AND SECTION 194C(7 ) ARE INTERCONNECTED AND ASSESSEE HAS NOT COMPLIED WITH T HE PROVISIONS OF SECTION 194C OF THE IT ACT. ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSER VED THAT THE ASSESSEE HAS INCURRED AN AMOUNT OF RS. 14,37,81,491/- UNDER THE HEAD FREIGHT EXPENSES AND THE ASSESSEE WAS ASKED TO EXPLAIN WHE THER IT HAS DONE TDS ON SUCH PAYMENT. IN ITS REPLY, THE ASSESSEE REFERRI NG TO THE PROVISION OF SECTION 194C STATED THAT IT HAS NOT DEDUCTED TDS AS PROVISIONS OF SECTION 194C(6) PROVIDES THAT NO DEDUCTION IS REQUIRED TO B E MADE ON SUM PAID OR CREDITED WHERE THE TRANSPORTERS HAVE FURNISHED THEI R RESPECTICVE PANS TO THE ASSESSEE. THE ASSESSING OFFICER REFERRING TO TH E PROVISIONS OF SECTION 194C(6) AND 194C(7) STATED THAT WHILE THIS PROVISIO N GRANTS RELIEF TO TRANSPORTERS, IT PUTS AN ONUS ON THE PERSON PAYING OR CREDITING SUCH SUM, TO FURNISH THIS INFORMATION IN THE PRESCRIBED FORM TO THE PRESCRIBED INCOME TAX AUTHORITY. THE ASSESSING OFFICER HELD THAT FOR AVAILING THE BENEFIT OF SECTION 194C(6) AND 194C(7) AND INTER ALIA NOT TO A TTRACT THE DISALLOWANCE ENVISAGED U/S 40(A)(IA), THE ASSESSEE FIRM WAS BOUN D BY LAW TO FURNISH THE INFORMATION, IN RESPECT OF THE TRANSPORTERS WHOSE S ERVICES IT HAD AVAILED, TO THE PRESCRIBED INCOME TAX AUTHORITY. THIS CONDITIO N CANNOT BE CONSTRUCTED TO BE TECHNICAL CONDITION, SINCE THE VERY ETHOS OF THESE PROVISIONS OF TDS ENVISAGES CROSS-LINKING OF INFORMATION REGARDING TR ANSPORTERS WITH THEIR PANS SO THAT NO INCOME ACCRUING TO SUNDRY TRANSPORT ERS ESCAPES ASSESSMENT. THE ASSESSING OFFICER FURTHER HELD THAT THE LEEWAY GIVEN IN SECTION 194C (6) IS ACTUALLY MEANT TO BE FOR THE BE NEFIT OF THE SMALL AND MEDIUM TRANSPORTERS, WHO HAD TO PROVIDE A DECLARATI ON TO THE DEDUCTOR PRIOR TO 01.10.2009, I.E., BEFORE AMENDMENT TO THE PROVISIONS OF SECTION 194C. HENCE, THE ONUS WAS UPON THE ASSESSEE FIRM TO FURNISH THE INFORMATION IT WAS ENTRUSTED TO COLLECT ON BEHALF O F THE INCOME TAX DEPARTMENT FROM THE TRANSPORTERS, TO REMAIN FREE FR OM THE CLUTCHES OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE ASS ESSING OFFICER HELD THAT THE ASSESSEE FIRM COULD NOT FURNISH THE REQUISITE I NFORMATION I.E. PAN OF THE ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 3 TRANSPORTER WHOSE SERVICES IT HAD AVAILED ALONG WIT H THE OTHER APPLICABLE TDS RETURNS WITHIN THE PRESCRIBED TIME OR EVEN TILL DATE. IT CANNOT BE ASCERTAINED AS TO WHEN THE PANS WERE OBTAINED BY IT FROM THE TRANSPORTERS, WHETHER IT OBTAINED PAN PRIOR TO MAKING PAYMENTS TO TRANSPORTERS, OR AT THE TIME OF FURNISHING THE REPLY TO QUERY RAISED BY THIS OFFICE AND THE LATTER IS CIRCUMSTANTIALLY TRUE. THE ASSESSEE FIRM HAS ALS O NOT FILED TDS RETURN AS REPLIED BY THE AR ON 27.12.2017. HENCE, IT CAN SAFE LY BE INFERRED THAT THE ASSESSEE FAILED TO DEDUCT TAX AT SOURCE AGAINST PAY MENTS MADE/CREDITED BY IT TO THE SPECIFIC TRANSPORTERS AGGREGATING TO RS. 14,37,81,491/- AND DISALLOWANCE U/S 40(A)(IA) OF THE ACT @ 30% OF RS. 14,37,81,491/- AMOUNTING TO RS. 4,31,34,447/- WAS MADE AND ADDED B ACK TO THE INCOME OF THE ASSESSEEE. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A). REGARDING OBTAINING PAN DETAILS OF ALL SUCH TRANSPORTERS AT THE TIME OF MAKING PAYMENT, THE LD. CIT(A) HELD THAT THE ASS ESSEE HAS FILED THE REQUISITE DETAILS ABOUT THE PAN OF THE TRANSPORTERS AT THE TIME OF PAYMENT OF FREIGHTS. THE AO HAS MENTIONED ABOUT THE PROBABI LITY OF SUCH PAN DETAILS HAVING BEEN PROCURED LATER AND NOT AT THE TIME OF M AKING THE PAYMENT TO SUCH TRANSPORTERS. HOWEVER, THE FACT IS THAT THE AO HAS NOT DISPUTED THE VERACITY OF SUCH PAN DETAILS. ONLY QUESTION HE HAS RAISED IS WHETHER SUCH PAN DETAILS WERE RECEIVED AT THE TIME PAYMENT OF FR EIGHTS OR NOT. THE LD. CIT(A) HAS THEREAFTER GIVEN A FINDING THAT IN ABSEN CE OF CONTRARY EVIDENCE, THE APPELLANTS SUBMISSION THAT SUCH PAN DETAILS WE RE PROVIDED BY THE TRANSPORTERS AT THE TIME OF THE PAYMENT OF FREIGHTS HAS TO BE ACCEPTED. THE LD. CIT(A) FURTHER HELD THAT IN TERMS OF PROVISIONS OF SECTION 194(C)(6) OF THE ACT, ONCE THE TRANSPORTERS HAVE PROVIDED THE PA N DETAILS TO THE DEDUCTOR THEN NO DEDUCTION IS REQUIRED TO BE MADE O N FREIGHT PAYMENT TO SUCH TRANSPORTERS AS PER SECTION 194C(6) OF THE ACT . REGARDING NON FILING OF ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 4 TDS RETURN AND WHETHER IT WOULD ATTRACT PROVISION O F SECTION 40(A)(IA) OF THE ACT, REFERRING TO THE PROVISION OF SECTION 40(A )(IA) OF THE ACT, THE LD. CIT(A) HELD THAT NO TAX REQUIRED TO BE DEDUCTIBLE O N PAYMENT MADE TO THE TRANSPORTERS IF THE CONDITION PRESCRIBED IN SECTION 194C(6) IS SATISFIED AND THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICA BLE. REGARDING PROVISION OF SECTION 194C(6) & 194C(7) AND WHETHER THEY ARE I NTERDEPENDENT OR CAN BE APPLIED INDEPENDENTLY, THE LD. CIT(A) REFERRED T O THE DECISION OF CO- ORDINATE BENCH IN CASE OF SOMA RANI GHOSH VS. DCIT, KOLKATA (ITA NO. 1420/KOL/2015) HELD THAT THE PROVISIONS OF SECTION 194C(6) AND 19 4C(7) ARE INDEPENDENT OF EACH OTHER AND WHEN CONDITIONS A S MENTIONED IN SECTION 194C(6) HAVE BEEN SATISFIED, THEN NO DEDUCTION OF T AX U/S 194C OF THE ACT IS REQUIRED TO BE MADE BY THE PAYEE. THE LD. CIT(A) FINALLY HELD THAT THE AO WAS NOT JUSTIFIED IN APPLYING THE PROVISIONS OF SEC TION 40(A)(IA) FOR NON DEDUCTION OF TAX AS THE CONDITIONS MENTIONED IN SEC TION 194C(6) HAVE BEEN SATISFIED AND AS FAR AS ASSESSEES NON-COMPLIANCE W ITH THE PROVISION OF SECTION 194C(7) OF THE ACT ARE CONCERNED, THERE ARE PENAL PROVISIONS AS PER SECTION 234E OF THE ACT AND 271H WHICH WILL HAVE TO BE FOLLOWED AS PER LAW BY THE A.O. 4. AGAINST THE AFORESAID FINDINGS OF THE LD CIT(A), THE REVENUE IS IN APPEAL BEFORE US. DURING THE COURSE OF HEARING, TH E LD. DR VEHEMENTLY ARGUED THE MATTER AND SUBMITTED THAT PROVISIONS OF SECTION 194C(6) AND 194C(7) ARE INTER-DEPENDENT AND GIVEN THE NON-COMPL IANCE OF FILING OF TDS RETURNS BY THE ASSESSEE, THE AO HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. FURTHER, HE RELIED O N THE FINDING OF THE ASSESSING OFFICER. 5. PER CONTRA, THE LD. AR SUPPORTED THE DECISION OF THE LD. CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE THE LD CIT(A ). THE LD AR SUBMITTED ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 5 THAT PROVISIONS OF SECTION 194C(6) AND 194C(7) ARE NOT INTER-DEPENDENT AND GIVEN THE NON-COMPLIANCE OF FILING OF TDS RETURNS B Y THE ASSESSEE, THE AO THE ASSESSING OFFICER HAS ALREADY ISSUED A SHOW CAU SE U/S 234E /271H DATED 28.01.2019. THE LD AR FURTHER SUBMITTED THAT AS THE ASSESSEE COMPLIES WITH THE PROVISIONS OF SECTION 194C(6), TH E PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE AND THE SAME HAS RIGHT LY BEEN HELD BY THE LD CIT(A). THE LD. AR FURTHER RELIED ON THE DECISION OF THE CO-ORDINATE BENCH IN CASE OF SOMA RANI GHOSH VS. DCIT, KOLKATA (SUPRA ) WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A) AND THE DECISION OF THE CO-ORDINATE BENCH IN CASE OF M/S MANGLAM HOUSING & DEVELOPERS VS. ACIT, JAIPUR (ITA NO. 324/JP/2018 DATED 04.06.2018). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LIMITED DISPUTE UNDER CONS IDERATION IS WHETHER FOR THE PURPOSES OF SECTION 40(A)(IA) NOT GETTING ATTRA CTED, THE COMPLIANCE OF THE TDS PROVISIONS HAVE TO BE READ LIMITED TO PROVI SIONS OF SECTION 194C(6) OR HAVE TO BE READ TOGETHER IN TERMS OF SECTION 194 C(6) AND SECTION 194C(7) OF THE ACT. THE RELEVANT PROVISIONS READ AS UNDER: 81 194C. 82 (1) ANY PERSON RESPONSIBLE FOR PAYING ANY SUM 83 TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE CONTRACTOR 83 ) FOR CARRYING OUT ANY WORK 83 (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN TH E CONTRACTOR AND A SPECIFIED PERSON SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF TH E CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTH ER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO ( I ) ONE PER CENT WHERE THE PAYMENT IS BEING MADE OR CRE DIT IS BEING GIVEN TO AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY; ( II ) TWO PER CENT WHERE THE PAYMENT IS BEING MADE OR CRE DIT IS BEING GIVEN TO A PERSON OTHER THAN AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 6 OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN. (2) WHERE ANY SUM REFERRED TO IN SUB-SECTION (1) IS CREDITED TO ANY ACCOUNT, WHETHER CALLED 'SUSPENSE ACCOUNT' OR BY ANY OTHER NAME, IN THE BOOKS OF ACCOUNT OF THE PERSON LIABLE TO PAY SUCH INCOME, SUCH CREDITING SHALL BE DEEMED TO BE CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE AND THE PROVISIONS OF THIS SECTION SHALL APPLY ACCORDINGLY. (3) WHERE ANY SUM IS PAID OR CREDITED FOR CARRYING OUT ANY WORK MENTIONED IN SUB-CLAUSE (E) OF CLAUSE (IV) OF THE EXPLANATION, TAX SHALL BE DEDUCTED AT SOURCE ( I ) ON THE INVOICE VALUE EXCLUDING THE VALUE OF MATERIA L, IF SUCH VA LUE IS MENTIONED SEPARATELY IN THE INVOICE; OR ( II ) ON THE WHOLE OF THE INVOICE VALUE, IF THE VALUE OF MATERIAL IS NOT MENTIONED SEPARATELY IN THE INVOICE. (4) NO INDIVIDUAL OR HINDU UNDIVIDED FAMILY SHALL B E LIABLE TO DEDUCT INCOME-TAX ON THE SUM CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACT OR WHERE SUCH SUM IS CREDITED OR PAID EXCLUSIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUA L OR ANY MEMBER OF HINDU UNDIVIDED FAMILY. (5) NO DEDUCTION SHALL BE MADE FROM THE AMOUNT OF A NY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID TO THE ACCOUNT OF, OR TO, THE C ONTRACTOR, IF SUCH SUM DOES NOT EXCEED 84 [THIRTY] THOUSAND RUPEES : PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SU MS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR EX CEEDS 85 [ONE LAKH] RUPEES, THE PERSON RESPONSIBLE FOR PAYING SUCH SUMS REFERRED TO IN SUB -SECTION (1) SHALL BE LIABLE TO DEDUCT INCOME-TAX UNDER THIS SECTION. (6) NO DEDUCTION SHALL BE MADE FROM ANY SUM CREDITE D OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE PREVIOUS YEAR TO THE ACCOUNT OF A C ONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAG ES, 86 [WHERE SUCH CONTRACTOR OWNS TEN OR LESS GOODS CARRIAGES AT ANY TIME DURING THE PREV IOUS YEAR AND FURNISHES A DECLARATION TO THAT EFFECT ALONG WITH] HIS PERMANENT ACCOUNT NU MBER, TO THE PERSON PAYING OR CREDITING SUCH SUM. (7) THE PERSON RESPONSIBLE FOR PAYING OR CREDITING ANY SUM TO THE PERSON REFERRED TO IN SUB-SECTION (6) SHALL FURNISH, TO THE PRESCRIBED IN COME-TAX AUTHORITY OR THE PERSON AUTHORISED BY IT, SUCH PARTICULARS, IN SUCH FORM AN D WITHIN SUCH TIME AS MAY BE PRESCRIBED. 7. THE PROVISIONS OF SUB-SECTION (6) OF SECTION 194 C HAS BEEN AMENDED BY THE FINANCE ACT, 2015 AND THE UN-AMENDED PROVISI ONS, AS RELEVANT FOR THE IMPUNGED ASSESSMENT YEAR READS AS UNDER: (6) NO DEDUCTION SHALL BE MADE FROM ANY SUM CREDITE D OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE PREVIOUS YEAR TO THE ACCOUNT OF A CONTRA CTOR DURING THE COURSE OF BUSINESS OF PLYING, ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 7 HIRING OR LEASING GOODS CARRIAGES, AND FURNISHES HI S PERMANENT ACCOUNT NUMBER, TO THE PERSON PAYING OR CREDITING SUCH SUM. 8. ON PERUSAL OF THE ABOVE PROVISIONS, IT IS CLEAR THAT ALL THAT IS REQUIRED FOR NON-DEDUCTION OF TDS ON PAYMENT TO THE TRANSPOR TER IS THAT THE LATTER FURNISHES HIS PAN NUMBER TO THE PERSON RESPONSIBLE FOR PAYING OR CREDITING THE AMOUNT TO HIM. THE PRIMARY ONUS IS THUS ON THE RECIPIENT TO FURNISH HIS PAN TO THE PAYER AND THE PAYER, ON RECEIPT OF SUCH PAN NUMBER, IS UNDER STATUTORY OBLIGATION NOT TO DEDUCT TDS ON SUCH PAYM ENTS. FURTHER, THE PAYER IS ALSO UNDER A STATUTORY OBLIGATION TO FURNI SH THE SAID INFORMATION IN PRESCRIBED FORMS TO THE INCOME TAX AUTHORITY. TO O UR MIND, THE STATUTORY OBLIGATION TO FURNISH THE INFORMATION REGARDING REC EIPT OF PAN AND NON- DEDUCTION OF TDS IS A FALL OUT OF AND CONSEQUENT OF THE FIRST STATUTORY OBLIGATION TO NOT DEDUCT TDS ON RECEIPT OF PAN. HO WEVER, MERELY BECAUSE THERE IS NON-COMPLIANCE ON PART OF THE ASSESSEE TO FURNISH THE PRESCRIBED INFORMATION TO THE REVENUE AUTHORITIES, THE SAME CA NNOT LEAD TO A CONCLUSION THAT THE ASSESSEE HAS NOT COMPLIED WITH THE FIRST STATUTORY OBLIGATION. THERE ARE SEPARATE PENAL PROVISIONS FOR NON-COMPLIANCE THEREOF AND THE AO HAS INFACT INVOKED THOSE PENAL PROVISION S WHEREBY SHOW-CAUSE HAS BEEN ISSUED TO THE ASSESSEE U/S 234E /271H DATE D 28.01.2019. IN THE INSTANT CASE, ONCE THE ASSESSEE IS IN RECEIPT OF PA N AND HAS NOT DEDUCTED TDS, IT HAS COMPLIED WITH THE FIRST STATUTORY OBLIG ATION CAST UPON HIM AND THE ASSESSEE CANNOT BE PENALIZED FOR NON-DEDUCTION OF TDS. THE PROVISIONS OF SECTION 40(A)(IA) WHICH ARE DEEMING FICTION RELA TING TO NON-DEDUCTION OF TDS HAVE TO BE READ IN THE LIMITED CONTEXT OF NON-D EDUCTION OF TDS AND THE SAME CANNOT BE EXTENDED TO ENSURE THAT EVEN WHERE T HE ASSESSEE COMPLIES WITH HIS STATUTORY OBLIGATION NOT TO DEDUCT TDS ON RECEIPT OF PAN, MERELY BECAUSE THE SUBSEQUENT OBLIGATION IN TERMS OF FILIN G OF PRESCRIBED FORMS HAS NOT BEEN COMPLIED WITH, THE ASSESSEE SHOULD SUFFER THIRTY PERCENT OF ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 8 DISALLOWANCE OF THE EXPENDITURE. A SIMILAR VIEW HA S BEEN HELD BY THE CO- ORDINATE BENCH IN CASE OF SOMA RANI GHOSH (SUPRA) W HEREIN IT WAS HELD AS UNDER: 25. NEXT GROUND OF DISALLOWANCE STATED BY THE LEARNED CIT IS THAT SEC. 194C(6) AND 194C(7) ARE TO BE READ TOGETHER, AND IF AFTER OBTAINING PAN FROM T HE TRANSPORTERS, THE REQUISITE PARTICULARS SO OBTAINED FROM THE TRANSPORTERS ARE NOT FURNISHED TO THE PRESCRIBED AUTHORITY AS PROVIDED U/S 194C(7), DEDUCTION AND FOR THAT MATTER DISALLOWANCE , U/S 194C AND 40(A)(IA) WOULD GET ATTRACTED. ON THIS ASPECT, AS INDICATED ABOVE A READING OF PRO VISIONS OF SECTION 194C (6), PRIOR TO THE AMENDMENT OF BY FINANCE ACT, 2015 (W.E.F. 1-06-2015 ), MAKES IT CLEAR THAT THAT DURING THE RELEVANT ASSESSMENT YEAR, IF THE SUB-CONTRACTORS HA VE SUPPLIED THEIR PAN TO THE PERSON MAKING PAYMENTS IN RESPECT OF HIRING/LEASING/OF VEHICLES D URING THE COURSE OF HIS BUSINESS, THEN SUCH PERSON MAKING SUCH PAYMENT SHALL NOT DEDUCT ANY TDS . IT IS ONLY BY WAY OF SUBSEQUENT AMENDMENT BY FINANCE ACT, 2015 (W.E.F. 1-06-2015), THE EXPRESSION 'WHERE SUCH CONTRACTOR OWNS TEN OR LESS GOODS CARRIAGES AT ANY TIME DURING THE PREVIOUS YEAR AND FURNISHES A DECLARATION TO THAT EFFECT ALONG WITH' WAS SUBSTITUTED IN THE PLACE OF 'ON FURNISHING OF' THEREBY INTRODUCING THE REQUIREMENT OF THE DECLARATION TO THE EFFECT INDICA TED BY THE AMENDMENT. THEREFORE, UNDER SEC. 194C(6), AS IT STOOD PRIOR TO THE AMENDMENT IN 2015 IN ORDER TO GET IMMUNITY FROM THE OBLIGATION OF TDS, FILING OF PAN OF THE PAYEE-TRANSPORTER ALON E IS SUFFICIENT AND NO CONFIRMATION LETTER AS REQUIRED BY THE LEARNED CIT IS REQUIRED. 26. ON THE ASPECT OF OBSERVATION OF THE LEARNED CIT TH AT SECTIONS 194C(6) AND SECTION 194C(7) HAVE TO BE READ TOGETHER TO EXTEND THE IMMU NITY FROM TDS, OUR ATTENTION IS DRAWN TO THE FACT THAT THOUGH THE FINANCE ACT, (N0.2) 200 9 INTRODUCED, INTER ALIA, SEC. 194C(6) AND 194C(7), SIMILAR AND ANALOGOUS PROVISION HAD BE EN VERY MUCH IN EXISTENCE UNDER PROVISO 2 AND 3 TO SECTION 194C(3) OF THE ACT. PLAC ING SUCH PROVISIONS IN JUXTAPOSITION IN THE FOLLOWING CHART MAKES IT CLEAR THAT THEY ARE VE RY MUCH ANALOGOUS AND THE DIFFERENCE IS THAT ONLY IN RESPECT OF REQUIREMENT OF A DECLARATIO N AND FURNISHING THE PARTICULARS TO THE TO THE PRESCRIBED INCOME-TAX AUTHORITIES UNDER THE PRO VISOS 2 AND 3 OF PRE-AMENDED SECTION 194C(3) IS BEING REPLACED BY THE PERMANENT ACCOUNT NUMBER UNDER PRESENT SECTIONS 194C(6) AND (7) RESPECTIVELY. 194C PRIOR TO AMENDMENT BY FINANCE ACT, (N0.2) 2009 ) 194C AS AMENDED BY FINANCE ACT, (N0.2) 2009 194C(3) NO DEDUCTION SHALL BE MADE UNDER SUB-SECTION (1) OR SUB- SECTION (2) (6) NO DEDUCTION SHALL BE MADE FROM ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 9 FROM PROVIDED THAT . PROVIDED FURTHER THAT NO DEDUCTION SHALL BE MADE UNDER SUB- SECTION (2), FROM THE AMOU NT OF ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE PREVIOUS YEAR TO THE ACCOUNT OF THE SUB- CONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAGES, ON PRODUCTION OF A DECLARATION TO THE PERSON CONCERNED PAYING OR CREDITING SUCH SUM, IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND WITHIN SUCH TIME AS MAY BE PRESCRIBED, IF SUCH SUB- CONTRACTOR IS AN INDIVIDUAL WHO HAS NOT OWNED MORE THAN TWO GOODS CARRIAGES AT ANY TIME DURING THE PREVIOUS YEAR: PROVIDED ALSO THAT THE PERSON RESPONSIBLE FOR PAYING ANY SUM AS AFORESAID TO THE SUB- CONTRACTOR REFERRED TO IN THE SECOND PROVISO SHALL FURNISH TO THE PRESCRIBED INCOME- TAX AUTHORITY OR THE PERSON AUTHORISED BY IT SUCH PARTICULARS AS MAY BE PRESCRIBE D IN SUCH FORM AND WITHIN SUCH TIME AS MAY BE PRESCRIBED; OR] DURING THE PREVIOUS YEAR TO THE ACCOUNT OF A CONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING, HIR ING OR LEASING GOODS CARRIAGES, 1 ['WHERE SUCH CONTRACTOR OWNS TEN OR LESS GOODS CARRIAGES AT ANY TIME DURING THE PREVIOUS YEAR AND FURNISHES A DECLARATION TO THAT EFFECT ALONG WITH'], HIS PERMANENT ACCOUNT NUMBER, TO THE PERSON PAYING OR CREDITING SUCH SUM. (7) THE PERSON RESPONSIBLE FOR PAYING OR CREDITING ANY SUM TO THE PERSON REFERRED TO IN SUB- SECTION (6) SHALL FURNISH, TO THE PRESCRIBED INCOME- TAX AUTHORITY OR THE PERSON AUTHORISED BY IT, SUCH PARTICULARS, IN SUCH FORM AND WITHIN SUCH TIME AS MAY BE PRESCRIBED. 27. FROM THE ABOVE, IT COULD BE OBSERVED THAT ONLY SLI GHT MODIFICATION HAD BEEN INTRODUCED AS TO THE PROCEDURE BY REPLACING 'DECLAR ATION' WITH THE WORDS 'PERMANENT ACCOUNT NUMBER' AS THE THING TO BE OBTAINED FROM TH E TRANSPORTER. WE ARE, THEREFORE, INCLINED TO HOLD THAT THE PROVISIONS OF SECTION 194 C(6) AND 194C(7) ARE SIMILAR TO THE PROVISO (2) AND (3) OF THE PRE-AMENDED SECTION 194C (3), AND ON THIS PREMISE WE SHALL PROCEED TO EXAMINE WHETHER SECTION 194C(6) AND 194C (7) ARE TO BE READ TOGETHER TO INVOKE PROVISIONS UNDER SECTION 40(A)(IA) OF THE AC T. 28. AFTER DRAWING AN ANALOGY BETWEEN THE PRE-AMENDED P ROVISO BETWEEN CLAUSE (2) AND CLAUSE (3) OF SECTION 194C(3) AND THE PRESENT AMEND ED SECTION 194C(6) AND 194C(7), LEARNED AR SUBMITTED THAT EVEN ON EARLIER OCCASIONS WHEN THE DECLARATION OBTAINED IN FORM 15I ( REQUIREMENT SIMILAR TO THE PAN PARTICULA RS UNDER SEC. 194C(6)) OBTAINED FROM THE TRANSPORTER UNDER SECOND PROVISO IS NOT SUBMITT ED IN FORM 15J TO THE COMMISSIONER OF INCOME TAX IN FORM 15J (REQUIREMENT SIMILAR AS I S PROVIDED UNDER THE THIRD PROVISO AND EQUIVALENT TO THE REQUIREMENT SEC. 194C(7), THE DEPARTMENT MADE ATTEMPTS TO MAKE ADDITIONS, BUT SUCH ADDITIONS HAVE BEEN DELETED AND RENDERED INVALID. HE SUBMITTED THAT THE COURTS AND TRIBUNALS CONSISTENTLY HELD THAT ON OBTAINING OF EITHER THE DECLARATION CONTEMPLATED UNDER SECOND PROVISO TO THE PRE-AMENDE D SECTION 194C(3) OR THE PAN ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 10 DETAILS UNDER THE PRESENT SECTION 194C(6), THE ASSE SSEE WAS NOT REQUIRED TO MAKE ANY DEDUCTION AT SOURCE ON THE PAYMENTS MADE TO THE CON TRACTOR OR SUB-CONTRACTOR, IRRESPECTIVE OF THE FACT WHETHER OR NOT SUCH INFORM ATION WAS FURNISHED TO THE AUTHORITIES AS PRESCRIBED UNDER THIRD PROVISO TO THE AMENDED SECTI ON 194C(3) OR THE PRESENT SECTION 194C(7). 29. IN CIT V. VALIBHAI KHAMBHAI MANKAD [2013] 216 TAXMAN 18/[2012] 28 TAXMANN.COM 119 (GUJ.) , IT IS HELD BY THE HON'BLE GUJARAT HIGH COURT AT A HMEDABAD THAT : '(6) SECTION 194C, AS ALREA DY NOTICED, MAKES PROVISION WHERE FOR CERTAIN PAYME NTS, LIABILITY OF THE PAYEE TO DEDUCT TAX AT SOURCE ARISES. THEREFORE , IF THERE IS ANY BREACH OF SUCH REQUIREMENT, QUESTION OF APPLICABILITY OF SECTION 4 0(A)(IA) WOULD ARISE. DESPITE SUCH CIRCUMSTANCES EXISTING, SUB- SECTION (3) MAKES EXCLUSION IN CASES WHERE SUCH LIA BILITY WOULD NOT ARISE. WE ARE CONCERNED WITH THE FURTHER PROVIS O TO SUB- SECTION (3), WHICH PROVIDES THAT NO DEDUCTION UNDER SUB- SECTION (2) SHALL BE MADE FROM THE AMOUNT OF ANY SU M CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID T O THE SUB- CONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAG ES, ON PRODUCTION OF A DECLARATION TO THE PERSON CONCERNED PAYING OR CREDITING SUCH SUM IN TH E PRESCRIBED FORM AND VERIFIED IT IN THE PRESCRIBED MANNER WITHIN THE TIME AS MAY BE PRESCRI BED, IF SUCH SUB- CONTRACTOR IS AN INDIVIDUAL WHO HAS NOT OWNED MORE THAN TWO GOODS CA RRIAGES AT ANY TIME DURING THE PREVIOUS YEAR. (7) THE EXCLUSION PROVIDED IN SUB - SECTION (3) OF SECTION 194 C FROM THE LIABILITY TO DEDUCT TAX AT SOURCE UNDER SUB- SECTION (2) WOULD THUS BE COMPLETE THE MOMENT THE R EQUIREMENTS CONTAINED THEREIN ARE SATISFIED. SUCH REQUIREMENTS, PRINCIPALLY, ARE THAT THE SUB- CONTRACTOR, RECIPIENT OF THE PAYMENT PRODUCES A NECESSAR Y DECLARATION IN THE PRESCRIBED FORMAT AND FURTHER THAT SUCH SUB - CONTRACTOR DOES NOT OWN MORE THAN TWO GOODS CARRIAG ES DURING THE ENTIRE PREVIOUS YEAR. THE MOMENT, SUCH REQUIREMENTS ARE FULFILLED, THE LIABILITY OF THE ASSESSEE TO DEDUCT TAX ON THE PAYMENTS MADE OR TO B E MADE TO SUCH SUB- CONTRACTORS WOULD CEASE. IN FACT HE WOULD HAVE NO AUTHORITY TO MAKE A NY SUCH DEDUCTION. (8) THE LATER PORTION OF SUB - SECTION (3) WHICH FOLLOW THE FURTHER PROVISO IS A R EQUIREMENT WHICH WOULD ARISE AT A MUCH LATER POINT OF TIME. SUCH REQUIREMENT IS THAT THE PERSON RESPONSIB LE FOR PAYING SUCH SUM TO THE SUB - CONTRACTOR HAS TO FURNISH SUCH PARTICULARS AS PRESC RIBED. WE MAY NOTICE THAT UNDER RULE 29D OF THE RULES, SUCH D ECLARATION HAS TO BE MADE BY THE END OF JUNE OF THE NEXT ACCOUNTING YEAR IN QUESTION. (9) IN OUR VIEW, THEREFORE, ONCE THE CONDITIONS OF FURT HER PROVISO OF SECTION 194C(3) ARE SATISFIED, THE LIABILITY OF THE PAYEE TO DEDUCT TAX AT SOURCE WOULD CEASE. THE REQUIREMENT OF SUCH PAYEE TO FURNISH DETAILS TO THE INCO ME TAX AUTHORITY IN THE PRESCRIBED FORM WITHIN PRESCRIBED TIME WOULD ARISE LATER AND ANY INFRACTIO N IN SUCH A REQUIREMENT WOULD NOT MAKE THE REQUIREMENT OF DEDUCTION AT SOURCE APPLICABLE U NDER SUB- SECTION (2) OF SECTION 194C OF THE ACT. IN OUR VIEW, THEREF ORE, THE TRIBUNAL WAS PERFECTLY JUSTIFIED IN TAKING THE VIEW IN THE IMPUGNED JUDGMENT. IT MAY BE THAT FAILURE TO COMPLY SUCH REQUIREMENT BY THE PAYEE MAY ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 11 RESULT INTO SOME OTHER ADVERSE CONSEQUENCES IF SO P ROVIDED UNDER THE ACT. HOWEVER, FULFILMENT OF SUCH REQUIREMENT CANNOT BE LINKED TO THE DECLARATION OF TAX AT SOURCE. ANY SUCH FAILURE THEREFORE CANNOT BE VISUALIZED BY ADVE RSE CONSEQUENCES PROVIDED UNDER SECTION 40(A)(IA) OF THE ACT. (10) WHEN ON THE BASIS OF THE RECORD IT IS NOT DISPUTED THAT THE REQUI REMENTS OF FURTHER PROVISO WERE FULFILLED, THE ASSESSEE WAS NOT REQUIRED TO MA KE ANY DEDUCTION AT SOURCE ON THE PAYMENTS MADE TO THE SUB- CONTRACTORS. IF THAT BE OUR CONCLUSION, APPLICATION OF SECTION 40(A)(IA) WOULD NOT ARISE SINCE, AS ALREADY NOTICED , SEC TION 40(A)(IA) WOULD APPLY WHEN THERE IS A REQUIREMENT OF DEDUCTION OF TAX AT SOURC E AND SUCH REQUIREMENT IS EITHER NOT FULFILLED OR HAVING DEDUCTED TAX AT SOURCE IS NOT D EPOSITED WITHIN PRESCRIBED TIME'. 30. IN CIT V. MARIKAMBA TRANSPORT CO. [2015] 379 ITR 129/231 TAXMAN 84/57 TAXMANN.COM 273 , HON'BLE KARNATAKA HIGH COURT HAS FORMULATED A QUE STION AS TO WHETHER NON-FILING OF FORM NO. 15I/J WITHIN THE PRE SCRIBED TIME IS ONLY A TECHNICAL DEFAULT OR THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT A RE ATTRACTED? AND PROCEEDED TO ANSWER THE SAME AS UNDER: 'SECTION 40 (A)(IA) AND SECTION 194C(3) OF THE ACT READS THUS: 'SECTION 40(A)(IA) : ANY INTEREST, COMMISSION OR BR OKERAGE, RENT, ROYALTY, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB-CONTRACTOR, BEING RE SIDENT, FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WO RK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XII-B AND SUCH TAX HAS NOT BEE N DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFI ED IN SUB- SECTION(I) OF SECTION 139'. SECTION 194C/3): NO DEDUCTION SHALL BE MADE UNDER S UB-SECTION (1) OR SUB- SECTION(2) FROM - (I) THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKEL Y TO BE CREDITED OR PAID TO THE ACCOUNT OF OR TO THE CONTRACTOR OR SUB-CONTRACTOR, IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES: PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR EXCEEDS FIFTY THOUSAND RUPEES, THE PERSON RESPONSIBLE FOR PAYING SUCH SUMS REFERRE D TO IN SUB-S.(L) OR AS THE CASE MAY BE SUB-S.(2) SHALL BE LIABLE TO DEDUCT INCOME-T AX UNDER THIS SECTION: PROVIDED FURTHER THAT NO DEDUCTION SHALL BE MADE UN DER SUBS. (2) FROM THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED O R PAID DURING THE PREVIOUS YEAR TO THE ACCOUNT OF THE SUB-CONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING HIRING OR LEASING GOODS CARRIAGES, ON PRODUCTION OF A DECLARA TION TO THE PERSON CONCERNED PAYING OR CREDITING SUCH SUM IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND WITHIN SUCH TIME AS MAY BE PRESCRIBED, I F SUCH SUB-CONTRACTOR IS AN INDIVIDUAL WHO HAS NOT OWNED MORE THAN TWO GOODS CA RRIAGES AT ANY TIME DURING THE PREVIOUS YEAR. ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 12 PROVIDED ALSO THAT THE PERSON RESPONSIBLE FOR PAYIN G ANY SUM AS AFORESAID TO THE SUB- CONTRACTOR REFERRED TO IN THE SECOND PROVISO SHALL FURNISH TO THE PRESCRIBED IT AUTHORITY OR THE PERSON AUTHORISED BY IT SUCH PARTI CULARS AS MAY BE PRESCRIBED IN SUCH FORM AND WITHIN SUCH TIME AS MAY BE PRESCRIBED: OR (II) ANY SUM CREDITED OR PAID BEFORE THE 1ST DAY OF JUNE, 1972; OR (III) ANY SUM CREDITED OR PAID BEFORE THE 1ST DAY O F JUNE, 1973, IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND A CO-OPERATIVE SOCIETY OR IN PURSUANCE OF A CONTRACT BETWEEN SUCH CONTRACTOR AND THE SUB-CONTRA CTOR IN RELATION TO ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WO RK) UNDERTAKEN BY THE CONTRACTOR FOR THE CO-OPERATIVE SOCIETY. 4. THE COMBINED READING OF THESE TWO PROVISIONS MAK E IT CLEAR THAT IF THERE IS ANY BREACH OF REQUIREMENTS OF SECTION 194C(3), THE QUES TION OF APPLICABILITY OF SECTION 40(A)(IA) ARISES. THE EXCLUSION PROVIDED IN SUB-SEC TION(3) OF SECTION 194C FROM THE LIABILITY TO DEDUCT TAX AT SOURCE UNDER SUB-SECTION (2) WOULD BE COMPLETE, THE MOMENT THE REQUIREMENTS CONTAINED THEREIN ARE SATISFIED. O NCE, THE DECLARATION FORMS ARE FILED BY THE SUBCONTRACTOR, THE LIABILITY OF THE ASSESSEE TO DEDUCT TAX ON THE PAYMENTS MADE TO THE SUB-CONTRACTOR WOULD NOT ARISE. AS WE HAVE E XAMINED, THE SUB-CONTRACTORS HAVE FILED FORM NO. 1SL BEFORE THE ASSESSEE. SUCH BEING THE CASE, THE ASSESSEE IS NOT REQUIRED TO DEDUCT TAX UNDER SECTION 194C(3) OF THE ACT AND TO FILE FORM NO.15]. IT IS ONLY A TECHNICAL DEFECT AS POINTED OUT BY THE TRIBU NAL IN NOT FILING FORM NO.15J BY THE ASSESSEE. THIS MATTER WAS EXTENSIVELY CONSIDERED BY THE ITAT, AHMEDABAD BENCH IN VALIBHAI KHANBHAI MANKAD'S CASE (SUPRA) AND THE SAID JUDGMENT HAS BEEN UPHELD BY THE HIGH COURT OF GUJARAT REPORTED IN (2013) 216 TAXMAN 18 (GUJ) WHEREIN IT IS HELD THAT ONCE THE CONDITIONS OF SECTION 194C(3) WE RE SATISFIED, THE LIABILITY OF THE PAYEE TO DEDUCT TAX AT SOURCE WOULD CEASE AND ACCOR DINGLY, APPLICATION OF SECTION 40(A)(IA) WOULD ALSO NOT ARISE. THE TRIBUNAL, PLACI NG RELIANCE ON THE JUDGMENT OF THE ITAT, AHMEDABAD BENCH, HAS DISMISSED THE APPEAL FIL ED BY THE REVENUE. WE AGREE WITH DIE SAID PROPOSITIONS AND HOLD THAT FILING OF FORM NO.15I/J IS ONLY DIRECTORY AND NOT MANDATORY.' 31. A COORDINATE BENCH OF THIS TRIBUNAL IN ITA NO. 86/ VIZ/2013 IN THE CASE OF ITO V. KOLLI BROS, DATED 11.12.2013 FOLLOWED THE DECISION OF THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF VALIBHAI KHANBHAI MANKAD (SU PRA). IN THE CASE OF MAHALAXMI CARGO MOVERS V. ITO [IT APPEAL NO. 6191 (MUM) OF 20 13, DATED 09.12.2015], ANOTHER COORDINATE BENCH OF THIS TRIBUNAL REACHED THE SAME CONCLUSION WHILE FOLLOWING THE DECISION OF THE COORDINATE BENCH IN THE CASE OF VAL IBHAI KHANBHAI MANKAD (SUPRA) AND SRI MARIKAMBA TRANSPORT CO. (SUPRA). 32. IT IS WORTH NOTICING THAT IN ACIT V. MOHAMMED SUHA IL, KURNOOL [IT APPEAL NO. 1536 (HYD.) OF 2014, DATED 13.02.2015], THE COORDINATE B ENCH OF THIS TRIBUNAL SPECIFICALLY HELD THAT THE PROVISIONS OF SECTION 194C(6) ARE INDEPEND ENT OF SECTION 194C(7), AND JUST BECAUSE THERE IS VIOLATION OF PROVISIONS OF SECTION 194C(7), DISALLOWANCE UNDER SECTION 40(A)(IA) DOES NOT ARISE IF THE ASSESSEE COMPLIES W ITH THE PROVISIONS OF SECTION 194C(6). 33. IN VIEW OF THE ABOVE AND RESPECTFULLY FOLLOWING TH E JUDICIAL REASONING DELINEATED IN THE ABOVE JUDGMENTS, WE FIND THAT IF THE ASSESSEE COMPL IES WITH THE PROVISIONS OF SECTION 194C(6), DISALLOWANCE UNDER SECTION 40(A)(IA) DOES NOT ARISE JUST BECAUSE THERE IS VIOLATION OF PROVISIONS OF SECTION 194C(7) OF THE A CT. ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 13 34. FROM OUR ABOVE DISCUSSION IT FOLLOWS THAT, ( I ) IN THE CONTEXT OF SECTION 194C(1), PERSON UNDERTAKI NG TO DO THE WORK IS THE CONTRACTOR AND THE PERSON SO ENGAGING THE CONTRACTOR IS THE CONTRA CTEE; ( II ) THAT BY VIRTUE OF THE AMENDMENT INTRODUCED BY FINAN CE ACT (NO.2) 2009, THE DISTINCTION BETWEEN A CONTRACTOR AND A SUB- CONTRACTOR HAS BEEN DONE AWAY WITH AND CL. (III) OF EXPLANATION UNDER 194C(7) NOW CLARIFIES THAT 'CONTR ACT' SHALL INCLUDE SUB-CONTRACT; ( III ) SUBJECT TO COMPLIANCE WITH THE PROVISIONS OF SECTIO N 194C(6), IMMUNITY FROM TDS UNDER SEC. 194C(1) IN RELATION TO PAYMENTS TO TRANSPORTERS, AP PLIES TRANSPORTER AND NON- TRANSPORTER CONTRACTEES ALIKE; ( IV ) UNDER S EC. 194C(6), AS IT STOOD PRIOR TO THE AMENDMENT IN 2015, IN ORDER TO GET IMMUNITY FROM THE OBLIGATION OF TDS, FILING OF PAN OF THE PA YEE - TRANSPORTER ALONE IS SUFFICIENT AND NO CONFIRMATION LETTER AS REQUIRED BY THE LEARNED CIT IS REQUIRED; ( V ) SECTIONS 194C(6) AND SECTION 194C(7) ARE INDEPENDENT OF EACH OTHER, AND CANNOT BE READ TOGETHER TO ATTRACT DISALLOWANCE U/S 40(A)(IA) READ WITH SECTION 194C OF THE ACT; AND ( VI ) IF THE ASSESSEE COMPLIES WITH THE PROVISIONS OF SEC TION 194C(6), NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS PERMISSIBLE, EVEN THERE IS VIOLATION OF THE PROVISIONS OF SECTION 194C(7) OF THE ACT. 35. CONSEQUENT TO OUR FINDINGS IN THE PRECEDING PARAGR APHS, WE REACH A CONCLUSION THAT THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN TREATING THE EXPENSE INCURRED BY THE ASSESSEE FOR CARRIAGE INWARD AND CARRIAGE OUTWARD AS DISALLOWABL E UNDER SECTION 40(A)(IA) OF THE ACT, AND ADDING BACK RS.1,63,78,648/- CLAIMED AS EXPENSE TOWARDS CARRIAGE INWARD AND RS.1,13,00,980/- CLAIMED AS EXPENSE TOWARDS CARRIAG E OUTWARD, AND SUCH ADDITIONS SHALL STAND DELETED. 9. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIRET Y OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DONT SEE ANY INFIRMI TY IN THE ORDER OF THE LD CIT(A) AND THE SAME IS HEREBY CONFIRMED. THE GROUND S OF APPEAL TAKEN BY THE REVENUE ARE DISMISSED. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 1113/JP/2018 ACIT, BHARATPUR VS. M/S ARIHANT TRADING CO. PAHARI , BHARATPUR 14 PRONOUNCED IN THE OPEN COURT ON 19/03/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19/03/2019 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ACIT, CIRCLE- BHARATPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S ARIHANT TRADING CO. PAHARI, BHA RATPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1113/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR