The Regional Manager, Ghaziabad V. DCIT (TDS), Ghaziabad

ITA 1912/DEL/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7527 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 11-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 28-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J P CHANDRAKAR
• Keywords: Recovery proceedings; Principle of natural justice; Reasonable cause
• Section: 194C; 28; 10

Judgement Text

ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES H NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER ITA NO.1910/DEL/2010 & ITA NO.1912/DEL/2010 ASSTT.YEAR: 2008-09 & 2009-10 THE REGIONAL MANAGER, VS DY.COMMISSIONER OF INCOME TAX UPSRTC (GHAZIABAD DEPOT), (TDS), GHAZIAB AD. 26, NAVYUG MARKET, GHAZIABAD. (PAN: AAATU3009M) ITA NO.51/DEL/2012 & ITA NO. 52/DEL/2012 ASSTT.YEAR: 2008-09 & 2009-10 ADDL.CIT(TDS), VS THE REGIONAL MANAGER, GHAZIABAD. UPSRTC, GHAZIABAD. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI J.P. CHANDRAKAR, SR. DR RESPONDENT BY:S/SHRI RAKESH GARG AD V., MRIDUL ,AGGRAWAL, CA O R D E R PER BENCH THESE APPEALS HAVE BEEN FILED BY THE REVENUE AGAIN ST THE ORDER OF THE CIT(A)-GHAZIABAD, IN APPEAL NO. 168 & 169/2008-09/G ZB FOR AY 2008-09 AND 2009-10 RESPECTIVELY, BOTH DATED 18.01.2010. ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 2 2. THE ASSESSEE HAS RAISED SIMILAR GROUNDS IN BOTH THE APPEALS WHICH READ AS UNDER:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD ASSESSING OFFICER ERRED IN TREATING THE HIRING O F BUSES AS HIRING OF MACHINERY U/S 194 I OF THE I. T. ACT 1961 BY COMPLETELY IGNORING THE FACT THAT ALL THE HIRED BUS ES WERE GOVERNED UNDER THE CONTRACTS AND 'CARRYING OUT A WO RK' AS EXPLAINED IN SECTION 194 C OF THE I T ACT 1961. IN FACT NO FIX RENTAL WAS PAID BUT THE PAYMENT MADE TO THE CONTRAC TORS WAS ON THE MILEAGE BASIS. 2. THE ORDER OF LD ASSESSING OFFICER IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AS BEFORE DECLARING T HE APPELLANT AS 'ASSESSEE IN DEFAULT' U/S 201 OF THE IT ACT 196 1, LD ASSESSING OFFICER DID NOT TRIED TO VERIFIED WHETHER THE CONTRACTORS/DEDUCTEES HAVE DULY PAID THE TAXES ON T HEIR INCOME. IN FACT THE LD ASSESSING ORDER DID NOT PASS ANY ORDER U/S 201 OF THE I T ACT 1961. 3. THAT IT SEEMS WHILE PASSING AN ORDER THE LD ASSE SSING OFFICER, IGNORED A FACT THAT APPELLANT IS A STATE O WNED CORPORATION AND ITS MAIN MOTIVE IS NOT PROFIT BUT A PUBLIC UTILITY AND THEREFORE IT HAS NO MALAFIDE INTENTION IN DEDUCTING THE TAX AT SOURCE ON LOWER RATES. 3. APROPOS THESE GROUNDS, WE HAVE HEARD ARGUMENTS O F BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON R ECORD. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE AO ERRED IN TREATING TH E HIRING OF BUSES AS HIRING OF MACHINERY U/S 194 I OF THE I. T. ACT 1961 BY COMPLE TELY IGNORING THE FACT THAT ALL THE HIRED BUSES WERE GOVERNED UNDER THE CONTRACTS A ND 'CARRYING OUT A WORK' AS EXPLAINED IN SECTION 194C OF THE I T ACT 1961. LD. COUNSEL FURTHER EXPLAINED THAT IN FACT NO FIXED RENTAL WAS PAID BUT THE PAYME NT MADE TO THE CONTRACTORS WAS ON THE MILEAGE BASIS. LD. COUNSEL FURTHER POINTED OUT THAT THE AO PASSED AN ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 3 ORDER AGAINST THE PRINCIPLES OF NATURAL JUSTICE AS BEFORE DECLARING THE ASSESSEE/APPELLANT AS ASSESSEE IN DEFAULT U/S 201 OF THE ACT, THE AO DID NOT EVEN TRY TO VERIFY THE FACT THAT WHETHER THE CONTRA CTORS/DEDUCTEES HAVE DULY PAID THE TAXES ON THEIR RESPECTIVE INCOME. LD. COUNSEL ALSO CONTENDED THAT IN FACT THE AO DID NOT PASS ANY ORDER U/S 201 OF THE ACT AS PER STATUTORY PROVISIONS OF THE ACT. LD. COUNSEL FINALLY CONTENDED THAT THE AO IGN ORED A VERY IMPORTANT FACT THAT THE ASSESSEE IS A STATE OWNED CORPORATION AND ITS MAIN MOTIVE TO NOT TO EARN PROFIT BUT TO FACILITATE PUBLIC AT LARGE FOR TRANSP ORTATION AND, THEREFORE, IT CANNOT BE EVEN PRESUMED THAT THE ASSESSEE HAD ANY MALAFIDE INTENTION DEDUCTING THE TAX AT SOURCE ON LOWER RATES U/S 194C OF THE ACT. 4. LD. COUNSEL HAS DRAWN OUR ATTENTION TOWARDS PAGE NO. 163 TO 165 OF THE PAPER BOOK AND SUBMITTED THAT ON SIMILAR ISSUE, ITA T DELHI BENCH F IN ITA NO. 5235 AND 5236/DEL/2010 FOR SIMILAR ASSESSMENT Y EARS I.E. 2008-09 AND 2009-10 IN THE CASE OF ITO VS REGIONAL MANAGER, UPS RTC, SAHARANPUR, HAS HELD THAT THE PAYMENTS MADE BY THE ASSESSEE WOULD F ALL UNDER THE CATEGORY OF CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE OF TR ANSPORT OTHER THAN RAILWAYS AND NOT UNDER RENT. THEREFORE, PROVISIONS OF SECTI ON 194C OF THE ACT WILL BE APPLICABLE. LD. COUNSEL PARTED HIS ARGUMENTS WITH A FINAL SUBMISSION THAT THE MAIN ISSUE IN BOTH THE APPEALS IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT F BENCH DELHI IN FAVOUR OF T HE ASSESSEE. ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 4 5. LD. COUNSEL ALSO PLACED RELIANCE ON VARIOUS DECI SIONS INCLUDING DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN T HE CASE OF ACIT VS LOTUS VALLEY EDUCATION SOCIETY DATED 17.5.2014 AND SUBMIT TED THAT TDS U/S 194C OF THE ACT APPLIES ON BUS RENT PAID BY THE ASSESSEE SC HOOL TO THE TRANSPORTER FOR CARRYING STUDENTS. ON THE SAME ISSUE, LD. COUNSEL HAS ALSO PLACED RELIANCE ON THE DECISION OF ITAT DELHI IN THE CASE OF ACIT(TDS) VS M/S IDEA CELLULAR LTD. IN ITA NO. 4913/DEL/11 FOR AY 2008-09 AND SUBMITTED TH AT TDS ON TRANSPORTATION CHARGES IS DEDUCTIBLE U/S 194C OF THE ACT AND NOT U /S 194I OF THE ACT. 6. REPLYING TO THE ABOVE, LD. DR SUPPORTING THE ORD ERS OF THE AUTHORITIES BELOW SUBMITTED THAT THE ASSESSEE HAD HIRED BUSES F OR COMMERCIAL PURPOSE AND, THEREFORE, THE AO RIGHTLY OBSERVED THAT THE SAME WE RE COVERED UNDER THE TERM OF COMMERCIAL VEHICLES. LD. DR FURTHER CONTENDED THAT THE ASSESSEE MADE PAYMENT ON ACCOUNT OF USE OF MACHINERY/EQUIPMENT/PLANT WHIC H IS COVERED U/S 194I OF THE ACT AND INCLUDED IN THE RENT, HENCE, TDS ON SUC H PAYMENT WAS REQUIRED TO BE DEDUCTED @10% AND, THEREFORE, THE ASSESSEE WRONG LY TOOK SHELTER OF SECTION 194C OF THE ACT FOR MAKING TDS AT THE LOWER RATE AN D, THUS, THE AO WAS VERY WELL WITHIN HIS JURISDICTION IN PASSING ORDER U/S 2 01(1A) OF THE ACT. 7. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS AND CONTENTIONS AND CAREFUL PERUSAL OF THE ORDERS/DECISIONS AS RELIED B Y THE LD. COUNSEL OF THE ASSESSEE, AT THE OUTSET, WE OBSERVE THAT ITAT F B ENCH DELHI IN THE CASE OF ITO ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 5 VS REGIONAL MANAGER, UPSRTC, SAHARANPUR (SUPRA) DEA LING WITH THE SAME ISSUE HAS HELD AS UNDER:- 5.1 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE MATERIAL AVAILABLE ON RECORD. IN THE CASE BEFOR E US THE ASSESSEE HAD TAKEN THE BUSES ON HIRE ON PAYMENT MAD E ON KILOMETER RUNNING BASIS. THE OWNER WAS RESPONSIBLE FOR RUNNING COST, MAINTENANCE, DRIVER COST AND OTHER IN CIDENTAL CHARGES LIKE ACCIDENT ETC. THEREFORE, THE ASSESSEE HAS NOT TAKEN THE PLANT OR MACHINERY ON RENT. UNDER SECTION 194-C OF THE ACT ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RE SIDENT FOR CARRYING OUT ANY WORK IN PURSUANCE OF A CONTRACT BE TWEEN THE CONTRACTOR AND A SPECIFIED PERSON SHALL AT THE TIME OF CREDIT OF SUCH SUM WITH THE ACCOUNT OF THE CONTRACTOR OR AT T HE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF CHEQUE OR DR AFT OR BY ANY MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQ UAL TO 2 PER CENT WHERE SUCH PAYMENT IS BEING MADE OR CREDIT IS GIVEN TO A PERSON OTHER THAN INDIVIDUAL OR A HUF OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN. EXPLANATION III DEFINES THE WORD WORK READS AS UNDER: EXPLANATION III.FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION WORK SHALL ALSO INCLUDE (A) ADVERTISING; (B) BROADCASTING AND TELECASTING INCLUDING PRODUCT ION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING; (C) CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE O F TRANSPORT OTHER THAN BY RAILWAYS; (D) CATERING. 5.2 FROM PLAIN READING OF DEFINITION OF WORD WORK IT IS CLEAR THAT IT INTER ALIA INCLUDES CARRIAGE OF GO ODS OR PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY R AILWAYS. ON THE OTHER HAND, SECTION 194I IS APPLICABLE TO SU MS PAID BY WAY OF RENT. EXPLANATION (I) OF SECTION 194I DEFINE S THE TERM RENT AND INTER-ALIA INCLUDES FOR PAYMENT IN RESPE CT OF MACHINERY OR PLANT OR EQUIPMENT. IN THE INSTANT CAS E, THE ASSESSEE HAS ENTERED INTO AN AGREEMENT FOR HIRING O F BUSES ON ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 6 KILOMETER SCHEME BASIS. THE PAYMENT THUS MADE WOULD FALL UNDER THE CATEGORY OF CARRIAGE OF GOODS AND PASSENG ERS BY ANY MODE OF TRANSPORT OTHER THAN RAILWAYS AND NOT UNDER RENT. THEREFORE, PROVISIONS OF SECTION 194-C OF THE ACT W ILL BE APPLICABLE. 8. WE FURTHER NOTE THAT THE HONBLE JURISDICTIONAL HIGH COURT OF ALLAHABAD IN THE CASE OF ACIT VS LOTUS VALLEY EDUCATION SOCIE TY (SUPRA) HAS HELD THAT THE TRIBUNAL DID NOT COMMIT ANY ERROR IN LAW IN INVOKIN G SECTION 194C OF THE ACT WHICH CLEARLY PROVIDES UNDER EXPLANATION III TO SUB -SECTION (2) OF SECTION 194C OF THE ACT THAT WORK INCLUDES CARRIAGE OF GOODS O R PASSENGERS AND BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS. THE RELE VANT OPERATIVE PART OF THIS ORDER READS THUS:- WE HAVE EXAMINED THE REASONING GIVEN BY AO, CIT AND THE DELHI HIGH COURT (SUPRA), AND FIND THAT WOR D 'RENT' IN THE EXPLANATION TO 194-1 INCLUDES 'PLANT' BUT THAT 'PLANT' HAS NOT BEEN DEFINED UNDER DEFINITION CLAUSE OF SECTION 2 OF THE ACT, WHICH IS GENERAL DEFINITION CLAUSE UNDER THE I NCOME TAX ACT. 9. IN THE PRESENT CASE, THE WORD' RENT' HAS NOT BEE N DEFINED IN SECTION 2 OF THE ACT. THE DEFINITION OF THE WORD' PLANT' UNDER SUB SECTION (3) OF SECTION 43, FALLS I N CHAPTER IV - COMPUTATION OF TOTAL INCOME, WHICH IS NEITHER RELAT ABLE NOR APPLICABLE TO THE CHAPTER XVII, RELATING TO COLLECT ION AND RECOVERY OF TAX. EVEN OTHERWISE, IT IS DIFFICULT TO BELIEVE THAT THE WORD' PLANT' DEFINED IN CHAPTER IV - COMPUTATIO N OF TOTAL INCOME, FALLING UNDER SECTION 43 OF THE ACT, INCLUD ES BUSES HIRED BY THE EDUCATIONAL INSTITUTIONS. THE DEFINITI ON OF' PLANT' IN SUB SECTION (3) OF SECTION 43 OF THE ACT CLEARLY STATES THAT PLANT' INCLUDES SHIPS, VEHICLES, BOOKS, SCIENTIFIC APPARATUS AND SURGICAL EQUIPMENT USED FOR THE PURPOSES OF THE BUS INESS OR PROFESSION. A PLAIN AND GENERAL INTERPRETATION OF ' PLANT' IN CHAPTER-IV OF SUB SECTION (3) OF SECTION 43 OF THE ACT WOULD SHOW THAT IT HAS INCLUDED THE USE OF SHIPS, VEHICLE S, BOOKS, ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 7 SCIENTIFIC APPARATUS AND SURGICAL EQUIPMENT FOR THE PURPOSES OF SECTION 28 TO 41. WE ARE NOT PERMITTED TO ADD OR SUBTRACT ANYTHING FROM IT, NOR CAN WE READ IT AS AN INCLUSIV E DEFINITION TO BE USED FOR THE PURPOSE OF SECTIONS IN CHAPTER X VII - COLLECTION & RECOVERY OF TAX AT SOURCE. 10. WE FURTHER FIND THAT SECTION 194-C OF THE ACT PROVIDES FOR COLLECTION AND DEDUCTION OF TAX AT SOU RCE IN RESPECT OF THE PAYMENTS MADE TO CONTRACTORS AND SUB CONTRACTORS. 11. ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO AN Y RESIDENT FOR CARRYING OUT ANY WORK IS LIABLE TO DED UCT AN AMOUNT EQUAL TO ONE PERCENT WHERE THE PAYMENT IS BE ING MADE OR CREDIT IS BEING GIVEN TO AN INDIVIDUAL OR A HIND U UNDIVIDED FAMILY AND AT TWO PERCENT, WHERE THE PAYMENT IS BE MADE OR CREDIT IS BEING GIVEN TO A PERSON OTHER THAN AN IND IVIDUAL OR A HINDU UNDIVIDED FAMILY. THE DEFINITION CLAUSES FOR THE PURPOSE OF SECTION 194-C PROVIDES THAT THE TERM' WORK' SHAL L INCLUDE (A) ADVERTISING; (B) BROADCASTING AND TELECASTING INCLU DING PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING: (C) CARRIAGE OF GOODS OR PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS; (D) CATERING; (E) MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO T HE REQUIREMENT OR SPECIFICATIONS OF A CUSTOMER BY USIN G MATERIAL PURCHASED FROM SUCH CUSTOMER 12. THE TRIBUNAL DID NOT COMMIT ANY ERROR OF LAW IN INVOKING SECTION 194-C, WHICH CLEARLY PROVIDES UNDE R EXPLANATION-III TO SUB SECTION (2) OF SECTION 194-C THAT WORK' INCLUDES CARRIAGE OF GOODS AND, PASSENGERS BY ANY M ODE OF TRANSPORT OTHER THAN BY RAILWAYS. 9. ON THE BASIS OF FOREGOING DISCUSSION AND IN VIEW OF THE RATIO OF THE DECISIONS RELIED BY THE LD. COUNSEL OF THE ASSESSEE , WE ARE INCLINED TO HOLD THAT BOTH THE APPEALS OF THE ASSESSEE ARE SQUARELY COVER ED BY THE DECISION OF ITAT DELHI F BENCH IN THE CASE OF ITO VS REGIONAL MANA GER, UPSRTC, SAHARANPUR (SUPRA) AND WE HOLD THAT THE DEFINITION OF WORD WO RK IS CLEAR IN EXPLANATION ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 8 III (C) ATTACHED TO SUB-SECTION (2) OF SECTION 194- C OF THE ACT WHICH MAKES IT CLEAR THAT IT INCLUDES CARRIAGE OF GOODS OR PASSENG ERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS. THEREFORE, PAYMENT MADE BY THE ASSESSEE WOULD CERTAINLY FALL UNDER THE CATEGORY OF CARRIAGE OF GO ODS AND PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN RAILWAYS AND THE SAME DOES NOT FALL UNDER THE DEFINITION OF RENT RELATED TO SECTION 194I OF THE A CT. WE ALSO NOTE THAT THE REVENUE HAS NOT DISPUTED THIS VERY FACT THAT THE AS SESSEE IS MAKING PAYMENT ON KILOMETRE RUNNING BASIS WITHOUT HAVING ANY RESPONSI BILITY FOR RUNNING COST, MAINTENANCE COST, DRIVER COST AND OTHER IDENTICAL C HARGES AND LIABILITIES, THEREFORE, IT CAN SAFELY BE PRESUMED THAT ASSESSEE HAS NOT TAKEN THE PLANT OR MACHINERY ON RENT BUT ASSESSEE IS MAKING PAYMENT TO WARDS HIRING CHARGES PAID TO THE TRANSPORTER FOR CARRIAGE OF GOODS AND PASSEN GERS BY ANY MODE OF ROAD TRANSPORT. ACCORDINGLY, GROUND NO. 1, 2 AND 3 IN B OTH THE APPEALS ARE ALLOWED. ITA 51 & 52/DEL/2012 OF THE REVENUE 10. THESE APPEALS HAVE BEEN FILED BY THE REVENUE AG AINST COMMON ORDERS OF THE CIT, GHAZIABAD DATED 17.10.2011 IN APPEAL NO. 1 79 AND 180/2010-11/GZB FOR AY 2008-09 AND 2009-10 BY WHICH THE CIT(A) DELE TED THE PENALTY IMPOSED BY THE AO U/S 271(1)(C) OF THE ACT. THE REVENUE HA S RAISED SIMILAR GROUNDS IN BOTH THE APPEALS WHICH READ AS UNDER:- ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 9 1. THAT THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN CANCELLING THE PENALTY ORDER U/S 271C DATED 11.08.2 010 PASSED BY THE ADDL.CIT(TDS),GHAZIABAD AND IN HOLDING THAT THE DEFAULTING THE SHORT DEDUCTION OF TAX BY THE REGIONAL MANAGER UPSRTC, GHAZIABAD DEPOT, 26, NAVYUG MARKET, DISTT. GHAZIABA D IS BONAFIDE ONE AND THERE IS REASONABLE CAUSE FOR THE SAME, IGNORING THE FACTS OF THE CASE THAT THE DEDICATOR CORPORATIO N IS LIABLE TO DEDUCT THE TAX U/S 1941 AND U/S 194J AT THE RATE OF 10% FOR HIRING THE BUSES AND FOR MAKING THE PAYMENT FOR PASSENGERS . 2. THAT THE ORDER OF THE LD. CIT (A) DESERVES TO B E CANCELLED AND THE ORDER OF THE AO BE RESTORED. 11. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND C AREFULLY PERUSED THE MATERIAL PLACED ON RECORD. AT THE OUTSET, LD. COUN SEL OF THE ASSESSEE HAS DRAWN OUR ATTENTION TOWARDS VARIOUS DECISIONS OF THE TRIB UNAL AND HONBLE JURISDICTIONAL HIGH COURT OF ALLAHABAD IN THE CASE OF ACIT(TDS) VS LOTUS VALLEY (SUPRA) SUBMITTED THAT WHEN SECTION 194C OF THE ACT IS APPLICABLE TO THE PAYMENT MADE BY THE ASSESSEE AND PAYMENTS ARE CERTA INLY OUT OF THE AMBIT OF SECTION 194I AND 194J OF THE ACT, THEN THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT IS NOT SUSTAINABLE AND THE SAME WAS RIGHTLY DEL ETED BY THE CIT(A) BY PASSING THE IMPUGNED ORDERS. 12. LD. DR FAIRLY ACCEPTED THAT IF QUANTUM APPEAL O F THE ASSESSEE IS BEING ALLOWED, THEN PENALTY ON THE SAME ISSUE IS NOT SUST AINABLE. HOWEVER, LD. DR PRESSED HIS ARGUMENTS BY SUBMITTING THAT THE ASSESS EE DEDUCTED TDS ON THE ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 10 LOWER RATE U/S 194C OF THE ACT INSTEAD OF SECTION 1 94I OF THE ACT, THEREFORE, PENALTY WAS LEVIED BY THE AO ON JUSTIFIED GROUND WH ICH WAS DELETED BY THE CIT(A) WITHOUT REASONABLE AND JUSTIFIED BASIS. 13. ON CAREFUL CONSIDERATION OF ABOVE, FROM BARE RE ADING OF THE OPERATIVE PART OF THE IMPUGNED ORDER, WE OBSERVE THAT THE CIT(A) G RANTED RELIEF FOR THE ASSESSEE DELETING THE PENALTY WITH FOLLOWING OBSERV ATIONS AND CONCLUSION:- 5.1 AS CAN BE OBSERVED FROM THE FACTUAL DEVELOPMEN TS IN THE CASES INVOLVING DISPUTE AS TO WHETHER SECTIO N 194C OR 194J IS APPLICABLE ON THE PAYMENTS MADE FOR HIRING OF BUSES; I FIND THAT ALMOST ALL CASES, THE CITS (A) AS WELL AS JURISDICTIONAL IT A T HAVE TAKEN THE VIEW THAT IT IS SECTION 194C (AND NOT SECTION 1941) WHICH IS APPLICABLE ON THE PAYMENTS, UNDER CONSIDERATION VIZ. PAYMENT MADE FOR HIRING OF BUSES /TRANSPORT FOR CARRIAGE OF EMPLOYEES. SUCH FAVOURABLE CASE LAW S ARE LISTED ABOVE IN APPELLANT'S SUBMISSION. FOLLOWING T HOSE CASES, EVEN THE UNDERSIGNED HAS ALREADY TAKEN A SIMILAR VI EW IN UMPTEEN NUMBER OF CASES; FOR EXAMPLE, IN THE CASES OF M/S LOTUS VALLEY EDUCATIONAL SOCIETY, KOTHARI INTERNATI ONAL SCHOOL AND ALSO IN APPELLANT'S CASE FOR ALIGARH DEP OT WHEREIN IT HAS BEEN HELD THAT APPELLANT HAS CORRECTLY DEDUC TED TDS USING PROVISIONS OF SECTION 194C TO SUCH PAYMENT. 5.2 IN THE WAKE OF SUCH FAVOURABLE VIEWS, PENALTY U/S 271C HAS ALSO BEEN CANCELLED IN SOME OF THESE CASES; FOR EXAMPLE, IN CASE OF M/S LOTUS VALLEY EDUCATIONAL SOCIETY FOR A. Y. 2008-09 & 2009-10, APPEAL NO. 299 & 300 OF 2010-11. 5.3 IN THE PRESENT CASE ALTHOUGH MY PREDECESSOR CIT (A) HAS CONFIRMED THE AO'S VIEW OF APPLYING SECTION 194J AN D THE APPELLATE ORDER OF ITAT, DELHI IS AWAITED; I AM SAT ISFIED THAT THIS IS A CASE OF DIFFERENCE IN LEGAL INTEROPERATIO N, TILTING HEAVY IN FAVOUR OF APPELLANT. IN ANY CASE, NO ANGLE OF CO NCEALMENT OR CONCEALING ANY MATERIAL FACTS ARISES. ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 11 5.4 THUS, FOLLOWING MY OWN DECISION IN THE CASES ME NTIONED ABOVE, I HOLD THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271 C AND, HENCE, THE SAME IS CANCELLED. 14. IN VIEW OF ABOVE, SINCE BY THE EARLIER PART OF THIS ORDER, WE HAVE ALLOWED APPEAL OF THE ASSESSEE FOR THE SAME ASSESSMENT YEAR S WHICH ARE UNDER CONSIDERATION IN THESE APPEALS, WE HAVE TAKEN A VIE W THAT THE PAYMENT MADE BY THE ASSESSEE TO THE TRANSPORTERS FOR CARRYING OF PA SSENGERS BY ROAD TRANSPORT FALLS WITHIN THE AMBIT OF SECTION 194C OF THE ACT AND THE ASSESSEE WAS RIGHT IN DEDUCTING THE TDS U/S 194C OF THE ACT, THEREFORE, T HE PENALTY IMPOSED BY THE AO ON ACCOUNT OF LOWER RATE DEDUCTION OF TDS IS CER TAINLY NOT SUSTAINABLE. WE ARE IN AGREEMENT WITH THE CONCLUSION OF THE CIT(A) THAT THE CASE IS SQUARELY COVERED BY THE DECISION OF LOTUS VALLEY EDUCATIONAL SOCIETY IN FAVOUR OF THE ASSESSEE, THEREFORE, PENALTY U/S 271(1)(C) OF THE A CT IS NOT LEVIABLE ON THE ASSESSEE. THUS, WE REACH TO A CONCLUSION THAT WE A RE UNABLE SEE ANY AMBIGUITY , PERVERSITY OR ANY OTHER VALID REASON TO INTERFERE W ITH THE IMPUGNED ORDER AND WE UPHOLD THE SAME. ACCORDINGLY, SOLE GROUND IN BOTH THE APPEALS OF THE REVENUE BEING DEVOID OF MERITS IS DISMISSED. 15. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED AND APPEALS OF THE REVENUE ARE DISMISSED AS INDICATED ABOVE. ITA NO. 1910, 1912/D/2010 ITA 51 & 52/D/2012 AYS 2008-09, 2009-10 12 ORDER PRONOUNCED IN THE OPEN COURT ON 22.12.2014. SD/- SD/- (J.S. REDDY) (CHANDRAMOHA N GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 22ND DECEMBER, 2014 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER AS STT. REGISTRAR