Deputy Commissioner of Income tAx Circle-2(1), Davangere V. M/s Muurugarajendra oil Industry Pvt Ltd , Chitradurga

ITA 2094/BANG/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6816 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 31-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN
• Keywords: TDS
• Section: 40(a)(ia); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO. 2094/BANG/2017 ASSESSMENT YEAR : 2012-13 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), DAVANGERE VS. M/S. MURUGARAJENDRA OIL INDUSTRY PVT. LTD., MATADA KURUBARA HATTI, DAVANGERE ROAD, CHITRADURGA [PAN: AACCS4678K] APPELLANT RESPONDENT APPELLANT BY : SHRI PRADEEP KUMAR, CIT RESPONDENT BY : SHRI V. SRINIVASAN, ADVOCATE DATE OF HEARING : 24-04-2019 DATE OF PRONOUNCEMENT : 26-04-2019 O R D E R PER N V VASUDEVAN, VICE PRESIDENT : THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DA TED 20-04-2017 OF THE COMMISSIONER OF INCOME TAX (APPEAL S)- DAVANGERE, RELATING TO ASSESSMENT YEAR 2012-13. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THI S APPEAL BY THE REVENUE IS AS TO WHETHER THE CIT(A) WAS JUSTIFIED IN PARTLY DELETING THE ADDITION MADE BY THE AO U/S. 40( A)(IA) OF : 2 : ITA NO. 2094/BANG/2017 THE INCOME TAX ACT, 1961 (ACT). THE GRIEVANCE OF THE R EVENUE IN THIS REGARD IS PROJECTED IN THE FOLLOWING GROUNDS RAISED BY THE REVENUE IN ITS APPEAL: I. THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APP EALS), DAVANGERE IS OPPOSED TO THE LAW AND NOT ON THE FACTS AND CIRC UMSTANCES OF THE CASE. II. THE LD.CIT(A) ERRED IN ALLOWING THE CLAIM OF FR EIGHT CHARGES PAYABLE WITHOUT EXAMINING WHETHER THE DETAILS OF PA YEES ARE FURNISHED BEFORE THE PRESCRIBED INCOME-TAX AUTHORIT Y IN THE PRESCRIBED FORM AND WITHIN THE PRESCRIBED TIME AS P ER SECTION 194(7). III. THE LD.CIT(A) ERRED IN TAKING INTO ACCOUNT ADD ITIONAL EVIDENCE RELATING TO FREIGHT CHARGES DETAILS UPLOADED IN C ONTRAVENTION OF RULE 46A OF THE INCOME TAX RULES. IV. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED U PON, THE ORDER OF THE CIT(A) MAY BE REVERSED AND THAT ASSESSMENT ORDE R BE RESTORED. V. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OTHER GROUNDS ON OR BEFORE HEARING OF THE APPEAL. 3. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF MANUFACTURE AND DEALER IN EDIBLE AND NON-EDIBLE OIL S AND ITS BY PRODUCTS. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAD MADE PAYMENT OF A SUM OF RS.6,62,65,573/- TO VARIOUS TRANSPORTERS AND THE EXPE NDITURE INCURRED IN THIS REGARD WAS CLAIMED AS DEDUCTION IN C OMPUTING INCOME FROM BUSINESS OF THE ASSESSEE. THE DETAILS O F WHICH ARE AS FOLLOWS: : 3 : ITA NO. 2094/BANG/2017 DETAILS OF FREIGHT: CARRIAGE INWARD 2,29,93,188.00 CARRIAGE OUTWARD 1,73,65,367.00 CONSIGNMENT FREIGHT 2,58,67,855.00 6,62,26,410.00 4. ADMITTEDLY, THE ASSESSEE DID NOT DEDUCT TAX AT SOURC E ON THE PAYMENTS MADE TO THE TRANSPORTERS. THE AO WAS OF THE VIEW THAT UNDER THE PROVISIONS OF SECTION 194C OF THE A CT, PAYMENT IN QUESTION WAS A PAYMENT FOR CARRYING OUT OF WORKS FOR WHICH ASSESSEE OUGHT TO HAVE DEDUCTED TAX AT SOURC E ON SUCH PAYMENT. SINCE THE ASSESSEE FAILED TO DEDUCT TAX A T SOURCE, THE AO WAS OF THE VIEW THAT THE AMOUNT CLAIMED AS DEDUCTION WHILE COMPUTING INCOME ON ACCOUNT OF TRANSPOR T CHARGES SHOULD BE DISALLOWED AND ADDED TO TOTAL INCOME OF ASSESSEE U/S. 40(A)(IA) OF THE ACT. 5. THE ASSESSEE SUBMITTED THAT IT HAD OBTAINED DECLARATION FROM ALL THE TRANSPORTERS WHO WERE ENGAGED FOR THE PURP OSE OF TRANSPORTATION TO THE EFFECT THAT THE SUM IN QUESTION WAS P AID TO THEM IN THE COURSE OF THEIR BUSINESS OF PLYING GOOD S CARRIAGES ALONG WITH THEIR PAN. ACCORDING TO THE PR OVISIONS OF SECTION 194C(6) OF THE ACT, IF SUCH A DECLARATION IS OB TAINED, A PERSON MAKING PAYMENT NEED NOT DEDUCT TAX AT SOURCE. A FTER THE AMENDMENT BY FINANCE ACT, 2015 W.E.F. 1.6.2015, TH E DECLARATION TO BE GIVEN BY THE CONTRACTOR SHOULD BE THAT HE OWNS 10 OR LESS GOODS CARRIAGES DURING THE RELEVANT PREVIOUS YEAR. SUCH DECLARATION IS NOT REQUIRED FOR THE AY 2012 -13 : 4 : ITA NO. 2094/BANG/2017 WHICH IS THE ASSESSMENT YEAR IN THIS APPEAL. IN THIS AP PEAL, A MERE DECLARATION BY THE TRANSPORTER THAT HE IS IN THE BU SINESS OF PLYING GOODS CARRIAGES IS ENOUGH. IT IS UNDISPUTED THAT THAT SUCH DECLARATION WAS OBTAINED BY THE ASSESSEE. U/S. 19 4C(7) OF THE ACT, THE ASSESSEE WHO IS A PERSON MAKING PAYMEN T HAS TO FURNISH TO THE PRESCRIBED INCOME TAX AUTHORITY, A DECLARATION GIVING PARTICULARS OF CERTIFICATE OBTAINED F ROM THE CONTRACTOR U/S.194C(6). IT IS ALSO ADMITTED THAT THE ASSESS EE DID NOT FURNISH TO THE PRESCRIBED AUTHORITY THE DECL ARATION OBTAINED FROM THE CONTRACTOR. THE ASSESSEE, NEVERTHELES S, PLEADED BEFORE THE AO THAT NO DISALLOWANCE U/S. 40(A) (IA) CAN BE MADE BECAUSE OF THE PROVISIONS OF SECTION 194C(6) OF THE ACT. 6. THE AO DID NOT AGREE WITH THE CLAIM OF ASSESSEE FOR THE REASON THAT SEC.194(6) OF THE ACT WAS APPLICABLE ONLY TO CONTRACTORS ENGAGED IN TRANSPORTATION AND NOT TO ASSESS EE. HE HELD THAT THE ASSESSEE DID NOT COMPLY WITH PROVISIONS O F SECTION 194C(7) OF THE ACT AND THEREFORE THE PROVISIONS OF SEC.40(A)(IA) OF THE ACT ARE APPLICABLE IN THE CASE O F THE ASSESSEE. HENCE THE AO DISALLOWED THE SUM OF RS.6,6 2,26,410 AND ADDED THE SAID SUM TO THE INCOME RETURNED BY THE ASSESSEE. 7. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) DELETE D THE ADDITION MADE BY THE AO EXCEPT IN RESPECT OF A SUM OF RS.99,04,607, FOR THE FOLLOWING REASONS. : 5 : ITA NO. 2094/BANG/2017 6B. I HAVE CAREFULLY PERUSED THE SUBMISSIONS AND B OARDS CIRCULAR NO. 19/2015. DURING THE APPEAL PROCEEDINGS BEFORE ME, THE AR STRESSES ON THE STATEMENT OF FACTS AND RELIED ON CB DT CIRCULAR NO. 19/2015 DATED 27/11/2015. THE DETAILS SUBMITTED AR E PERUSED AND CONSIDERED. DETAILS OF LORRY FREIGHT UPLOADED/NOT U PLOADED IS TABULATED AS UNDER: PARTICULARS AMOUNT (RS) AMOUNT (RS) FREIGHT PAID AS PER ORDER 6,62,65,573 LESS: BELOW RS. 75,000 H S ROAD LINES, MUMBAI 72,695 LAKSHMI TRANSPORTS, MNG 63,729 LATHA NARAYANA TRANSPORTS 69,552 NEHA ROADLINES 55,720 SREE GURU TRANSPORTS 47,195 UNIVERCEL LOGISTICS 64,860 3,73,751 LORRY FREIGHT DETAILS TO BE UPLOADED 6,58,91,822 LESS: LORRY FREIGHT DETAILS UPLOADED 5,59,87,215 BALANCE DETAILS NOT UPLOADED 99,04,607 6C. IN THE INSTANT CASE, THE APPELLANT IS NOT CARRY ING ON TRANSPORTATION BUSINESS, FURTHER CBDT VIDE CIRCULAR NO. 19/2015 DA TED 27/11/2015 HAS CLARIFIED THAT, DEDUCTOR DOING ANY B USINESS CAN MAKE PAYMENT TOWARDS PLYING/HIRING/LEASING OF TRANS PORT VEHICLE WITHOUT DEDUCTING TAX BY OBTAINING PAN. FOLLOWING BOARDS CIRCULAR, IT IS HELD THAT TDS SH OULD HAVE BEEN MADE ON TRANSPORTATION CHARGES OF RS.99,04,607 /- WHOSE DETAILS HAVE NOT BEEN UPLOADED IN THE E-TDS STATEME NT. THEREFORE, DISALLOWANCE U/S. 40(A)(IA) TO THE EXTENT OF RS.99, 04,607/- OUT OF RS.6,62,65,573/- IS SUSTAINED. THUS, THE GROUND IS PARTLY ALLOWED. 8. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE REVEN UE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. : 6 : ITA NO. 2094/BANG/2017 9. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LEARNED DR RELIED ON THE ORDER OF THE AO. THE LEARNED COUNSEL F OR THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A) AND DECISI ON OF ITAT BANGALORE IN THE CASE OF M/S.FINE BLANKING PVT.LTD. (I NFRA). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT IDENTICAL ISSUE HAD COME UP FOR CONSIDERATION BEFORE ITAT BANGALORE BENCH IN THE CASE OF M/S. FINE BLANKING PV T. LTD., VS. THE JOINT COMMISSIONER OF INCOME TAX, IN ITA NO.393/BANG/2016 ASSESSMENT YEAR : 2012-13 ORDER DATE D 15.02.2019, WHEREIN THIS TRIBUNAL DEALT WITH IDENTICA L STAND OF THE REVENUE ON TDS ON TRANSPORTATION CHARGES AND THIS TRIBUNAL FOLLOWING THE DECISION OF THE ITAT CALCUTTA BE NCH OF THE TRIBUNAL IN THE CASE OF SOMA RANI GHOSH V. DCIT, 74 TAXMANN.COM 90 (KOLKATA TRIB.) DELETED THE ADDITION MAD E U/S.40(A)(IA). THE FOLLOWING ARE THE OBSERVATIONS OF THE KOLKATA ITAT IN THE CASE OF SOMA RANI GHOSH (SUPRA): 21. NOW COMING TO THE CONTENTION THAT UNDER SEC. 194C(6) AS IT STANDS NOW, PROVIDING FOR IMMUNITY FROM TDS UNDE R SEC. 194C(1) IN RELATION TO PAYMENTS TO TRANSPORTERS, AP PLIES ONLY TO A TRANSPORTER MAKING PAYMENT TO ANOTHER SUB-CONTRAC TOR SUBMITTING HIS PAN TO THE FORMER, SECTION 194C(6) D OES NOT GIVE ANY SUCH INDICATION. SECTION 194C(6) READS AS FOLLOWS: '(6) NO DEDUCTION SHALL BE MADE FROM ANY SUM CREDIT ED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE PREVIOUS YEAR TO THE ACCOUNT OF A CONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING, HIRING OR LEASING GOO DS CARRIAGES, WHERE SUCH CONTRACTOR OWNS TEN OR LESS G OODS : 7 : ITA NO. 2094/BANG/2017 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.' 22. PRIOR TO THE AMENDMENT BY FINANCE ACT, 2015 (W.E.F . 01-06-2015, IT WAS READING AS FOLLOWS: '(6) NO DEDUCTION SHALL BE MADE FROM ANY SUM CREDIT ED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE PREVIOUS YEAR TO THE ACCOUNT OF A CONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING, HIRING OR LEASING GOO DS CARRIAGES, ON FURNISHING OF HIS PERMANENT ACCOUNT NUMBER, TO THE PERSON PAYING OR CREDITING SUCH SUM. ' 23. A PLAIN READING OF THE ABOVE SUB-SECTION MAKES IT AMPLY CLEAR THAT ON THE CONTRACTOR UNDERTAKING TRANSPORT OF GOODS IN COURSE OF HIS TRANSPORT BUSINES S, FURNISHING PAN TO THE PERSON MAKING SUCH PAYMENT/CREDIT, THE PAYEE SHALL NOT BE REQUIRED TO EFFEC T TDS FROM SUCH PAYMENT TO THE TRANSPORTER. ON FURNISHING THE PAN NO. FROM THE RECIPIENT TRANSPORTER- CONTRACTOR, THE IMMUNITY FROM MAKING TDS UNDER SEC. 194C(1) SHALL BE AVAILABLE TO ALL PAYERS BY VIRTUE OF 194C(6), IN RELATION TO ALL GOOD S TRANSPORT CHARGES IRRESPECTIVE OF THE FACT, WHETHER I T WAS UNDER A CONTRACT OR A SUB-CONTRACT. 24. WE WISH TO REFER PROFITABLY TO PARA NO. 49.3 OF CBDT CIRCULAR NO. 05 2010 F.NO.142/13/2010-S0 (TPL), DATED 3 RD JUNE, 2010 (EXPLANATORY NOTES ON FINANCE ACT (NO.2) 2009), WHERE UNDER THE PAN BASED IMMUNITY AND EXEMPTION FROM MAKING TDS TO TRANSPORTERS WAS EXTENDED IN ALL TRANSPORT CONTRACTS. '49.3 PROVISIONS FOR PAYMENTS AND TAX DEDUCTED AT SOURCE TO TRANSPORTERS UNDER SECTION 194C, TAX IS REQUIRED TO BE DEDUCTED ON PAYMEN TS TO TRANSPORT CONTRACTORS : 8 : ITA NO. 2094/BANG/2017 ENGAGED IN THE BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAGES. HOWEVER IF THEY FURNISH A STATEMENT THAT THEY DO NOT OWN 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 E XEMPT 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 WIL L ACCORDINGLY APPLY IN RELATION TO THE ASSESSMENT YEAR 2010- 2011 AND SUBSEQUENT ASSESSMENT YEARS.' THE CIRCULAR, WHILE REFERRING TO THE AMENDMENT IN SE C. 194C(6) MADE IT PLAINLY CLEAR THAT FROM THE A.Y. 2010-1 1 ONWARDS, BY VIRTUE THEREOF WHEN TRANSPORT OPERATORS FURNISH THEIR PAN TO THE PERSON RESPONSIBLE FOR MAKING PAYMENTS TO THEM, THE TRANSPORT OPERATORS WOULD BE OUTSIDE THE PURVIEW OF TDS U/S 194C. NEEDLESS TO SAY THAT SUBJECT TO COMPLIANCE WITH THE PROVISIONS OF SECTION 194C(6), IMMUNITY FROM TDS UNDER SEC. 194C(1) IN RELATION TO PAYMENTS TO TRANSPORTERS, AP PLIES TRANSPORTER AND NON-TRANSPORTER CONTRACTEES ALIKE. : 9 : ITA NO. 2094/BANG/2017 25. NEXT GROUND OF DISALLOWANCE STATED BY THE LEARNED CIT IS THAT SEC. 194C(6) AND 194C(7) ARE TO BE READ TOGETHE R, AND IF AFTER OBTAINING PAN FROM THE 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 PROVISIONS OF SECTION 19 4C (6), PRIOR TO THE AMENDMENT OF BY FINANCE ACT, 2015 (W.E.F . 01- 06-2015), MAKES IT CLEAR THAT THAT DURING THE RELEVANT ASSESSMENT YEAR, IF THE SUB-CONTRACTORS HAVE SUPPLIED THEIR PAN TO THE PERSON MAKING PAYMENTS IN RESPECT OF HIRING/LEASING/OF VEHICLES DURING 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. 01-06-2015), TH E EXPRESSION 'WHERE SUCH CONTRACTOR OWNS TEN OR LESS GO ODS 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 EF FECT INDICATED 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, FILI NG OF PAN OF THE PAYEE-TRANSPORTER ALONE IS SUFFICIENT AND N O 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 IMMUNITY FROM TDS, OUR ATTENTION IS DRAWN TO THE FACT THAT THOUGH THE FINANCE ACT, (NO.2) 2009 INTRODUCED, INTER ALIA, SEC. 194C(6) AND 194C(7), SI MILAR AND ANALOGOUS PROVISION HAD BEEN VERY MUCH IN EXISTE NCE UNDER PROVISO 2 AND 3 TO SECTION 194C(3) OF THE ACT. PLACING SUCH PROVISIONS IN JUXTAPOSITION IN THE FOLLOW ING CHART MAKES IT CLEAR THAT THEY ARE VERY MUCH ANALOGOUS AND THE DIFFERENCE IS THAT ONLY IN RESPECT OF REQUIREME NT OF A DECLARATION AND FURNISHING THE PARTICULARS TO THE TO THE PRESCRIBED INCOME-TAX AUTHORITIES UNDER THE PROVISOS 2 AND : 10 : ITA NO. 2094/BANG/2017 3 OF PRE-AMENDED SECTION 194C(3) IS BEING REPLACED B Y THE PERMANENT ACCOUNT NUMBER UNDER PRESENT SECTIONS 194C(6) AND (7) RESPECTIVELY. 194C PRIOR TO AMENDMENT BY FINANCE ACT, (NO.2) 2009 ) 194C AS AMENDED BY FINANCE ACT, (NO.2) 2009 194C(3) NO DEDUCTION SHALL BE MADE UNDER SUB-SECTION (1) OR SUB- SECTION (2) FROM PROVIDED THAT . PROVIDED FURTHER THAT NO DEDUCTION SHALL BE MADE UNDER SUB- SECTION (2), FROM THE AMOUNT 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 T IME 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 REFERR ED TO IN THE SECOND PROVISO SHALL FURNISH TO THE PRESCRIBED INCOME- TAX AUTHORITY OR THE PERSON AUTHORISED BY IT SUCH PARTICULARS AS MAY BE PRESCRIBED IN SUCH FORM AND WITHIN SUCH TIME AS MAY BE PRESCRIBED; OR] (6) NO DEDUCTION SHALL BE MADE FROM ANY SUM CR EDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE PREVIOUS YEAR TO THE ACCOUNT OF A CONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING, HIRING 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) S HALL 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. : 11 : ITA NO. 2094/BANG/2017 27. FROM THE ABOVE, IT COULD BE OBSERVED THAT ONLY SLI GHT MODIFICATION HAD BEEN INTRODUCED AS TO THE PROCEDURE BY REPLACING 'DECLARATION' WITH THE WORDS 'PERMANENT ACCOU NT NUMBER' AS THE THING TO BE OBTAINED FROM THE TRANSPORTER. WE ARE, THEREFORE, INCLINED TO HOLD THAT THE PROVISIONS OF SECTION 194C(6) AND 194C(7) ARE SIMILAR TO THE PROVISO (2) AND (3) OF THE PRE-AMENDED SECTION 194C(3), AND ON TH IS 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 ACT. 28. AFTER DRAWING AN ANALOGY BETWEEN THE PRE-AMENDED PROVISO BETWEEN CLAUSE (2) AND CLAUSE (3) OF SECTION 194C(3) AND THE PRESENT AMENDED SECTION 194C(6) AND 194C(7), LEARNED AR SUBMITTED THAT EVEN ON EARLIER OCCASIONS WHEN THE DECLARATION OBTAINED IN FORM 15 I ( REQUIREMENT SIMILAR TO THE PAN PARTICULARS UNDER SEC.194C(6)) OBTAINED FROM THE TRANSPORTER UNDER SECON D PROVISO IS NOT SUBMITTED IN FORM 15J TO THE COMMISSIONER OF INCOME TAX IN FORM 15J (REQUIREMENT SIMILAR AS IS 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 TH E DECLARATION CONTEMPLATED UNDER SECOND PROVISO TO THE PR E- AMENDED SECTION 194C(3) OR THE PAN DETAILS UNDER THE PRESENT SECTION 194C(6), THE ASSESSEE WAS NOT REQUIRED TO MAKE ANY DEDUCTION AT SOURCE ON THE PAYMENTS MADE TO THE CONTRACTOR OR SUB-CONTRACTOR, IRRESPECTIVE OF THE FAC T WHETHER OR NOT SUCH INFORMATION WAS FURNISHED TO THE AUTHORITIES AS PRESCRIBED UNDER THIRD PROVISO TO THE AMENDED SECTION 194C(3) OR THE PRESENT SECTION 194C(7). THE TRIBUNAL AFTER REFERRING TO THE FOLLOWING DECISIO NS, CIT V. VALIBHAI KHAMBHAI MANKAD [2013] 216 TAXMAN 18/[2012] 28 TAXMANN.COM 119 (GUJ.), CIT V. MARIKAMBA : 12 : ITA NO. 2094/BANG/2017 TRANSPORT CO. [2015] 379 ITR 129/231 TAXMAN 84/57 TAXMANN.COM 273 (KARNATAKA) AND ULTIMATELY CONCLUDED A S FOLLOWS: 33. IN VIEW OF THE ABOVE AND RESPECTFULLY FOLLOWIN G THE JUDICIAL REASONING DELINEATED IN THE ABOVE JUDGMENT S, WE FIND THAT IF THE ASSESSEE COMPLIES WITH THE PROVISI ONS OF SECTION 194C(6), DISALLOWANCE UNDER SECTION 40(A)(I A) DOES NOT ARISE JUST BECAUSE THERE IS VIOLATION OF PROVIS IONS OF SECTION 194C(7) OF THE ACT. 11. IT IS THUS CLEAR FROM THE AFORESAID DECISION OF T HE TRIBUNAL THAT THE TWO REASONS ASSIGNED BY THE AO FOR N OT ACCEPTING THE PLEA OF THE ASSESSEE TO INVOKE THE PROVISI ONS OF SEC.40(A)(IA) OF THE ACT IN THIS CASE WAS HELD TO BE UNSUSTAINABLE. THE FIRST REASON GIVEN BY THE AO WAS THAT THE PROVISIONS OF SEC.194C(6) ARE APPLICABLE ONLY TO TRAN SPORT CONTRACTORS AND NOT TO ANY OTHER PAYEE AND THAT REASON HA S BEEN HELD TO BE NOT CORRECT IN THE AFORESAID DECISION IN WHICH IT WAS HELD SEC. 194C(6) MADE IT PLAINLY CLEAR THAT FROM THE A.Y. 2010-11 ONWARDS, BY VIRTUE THEREOF WHEN TRANSPORT OPER ATORS FURNISH THEIR PAN TO THE PERSON RESPONSIBLE FOR MAKIN G PAYMENTS TO THEM, THE TRANSPORT OPERATORS WOULD BE OUTSIDE THE PURVIEW OF TDS U/S 194C AND THAT IMMUNITY FROM TDS U/S. 194C(1) IN RELATION TO PAYMENTS TO TRANSPORTER S, APPLIES TRANSPORTER AND NON-TRANSPORTER CONTRACTEES ALIKE. THE SECOND REASON GIVEN BY THE AO WAS THAT THE ASSESSEE FAILED TO COMPLY WITH THE PROVISIONS OF SEC.194C(7) OF THE ACT AND THAT REASON HAS ALSO BEEN HELD TO BE NOT CORRECT IN THE AFORESAID DECISION AND THE VIEW TAKEN IS THAT IF THE ASSESSEE : 13 : ITA NO. 2094/BANG/2017 COMPLIES 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 AC T. 12. IN THE LIGHT OF THE AFORESAID DECISION OF THE TRIBU NAL, WE ARE OF THE VIEW THAT THE CIT(A) WAS JUSTIFIED IN DELETIN G THE ADDITION MADE BY THE AO. WE FIND NO GROUNDS TO INTERF ERE WITH THE ORDER OF CIT(A) AND CONSEQUENTLY DISMISS THIS APP EAL BY THE REVENUE. 13. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF APRIL, 2019 SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEV AN) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 26 TH APRIL, 2019 TNMM : 14 : ITA NO. 2094/BANG/2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE