Shri Anil Khandelwal, Indore V. THE ITO-5(3), Indore

ITA 299/IND/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4130 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-10-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 04-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Assessee Lawyers: THRIBHUVAN SACHDEVA
• Section: 143(3); 194C; 263; 139

Judgement Text

ANIL KHANDELWAL ITA NO.299/IND/2016 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.299/IND/2016 ASSESSMENT YEAR: 2009-10 REVENUE BY S HRI P.K. MITRA, SR.DR ASSESSEE BY SHRI THRIBHUVAN SACHDEVA ,C.A DATE OF HEARING 0 5 .10 . 2018 DATE OF PRONOUNCEMENT 12 .10 .2018 O R D E R PER MANISH BORAD, AM. THIS APPEAL OF ASSESSEE PERTAINING TO A.Y. 2009-10 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-II, INDORE (IN SHORT CIT(A)), DATED 30.11.2015 WHICH IS ARISING OUT OF THE ORDER U/S 143(3)/263 OF THE INCOME TAX ACT 1961 (HEREINAFTER CALLED AS THE ACT) FRAMED ON 26.03.2014 BY ITO-5( 3), INDORE. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS; SHRI ANIL KHANDELWAL , 113, SUDARSHAN COMPLEX, BHAVARKUAN MAIN ROAD, INDORE VS. ITO 5(3), INDORE ( APPELLANT ) (RESPONDENT ) PAN NO. A CBPK8401C ANIL KHANDELWAL ITA NO.299/IND/2016 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT HAS ERRED IN UPHOLDING THE ADDITION OF RS.22,19,660/- U/S 40( A)(IA) OF THE IT ACT 1961 ON ACCOUNT OF NON DEDUCTION OF TDS. 2. THE LEARNED CIT APPEALS-II AND THE AO HAS FAILED TO APPRECIATE AND OR OVER LOOKED. (I) THAT THE PAYMENTS MADE TO THE TRANSPORTERS ARE NOT IN RESPECT OF A TRANSPORT CONTRACT FOR CARRIAGE OF GOODS. (II) THAT THE PAYMENT MADE ARE IN RESPECT OF HIRE O F TRANSPORT 3. BRIEF FACTS OF THE CASE LIMITED TO THE ISSUE RAI SED BEFORE US ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE B USINESS OF TRANSPORT BOOKING. ASSESSMENT U/S 143(3) OF THE AC T WAS COMPLETED ON 23.12.2011 ASSESSING INCOME OF RS.11,6 3,710/-. SUBSEQUENTLY LD. CIT-II, INDORE UNDER THE POWERS OF SECTION 263 OF ACT PASSED ORDER ON 3.6.2013 DIRECTING THE ASSESSIN G OFFICER TO EXAMINE THE APPLICABILITY OF THE PROVISIONS OF 194C AS WELL AS 194I OF THE ACT ON THE PAYMENTS TO TRUCK OPERATORS. LD. ASSESSING OFFICER COMPLYING TO THE ORDER OF LD.CIT(A) INITIAT ED THE ASSESSMENT PROCEEDINGS AND COMPLETED IT ON 26.3.2014 U/S 143(3 ) R.W..R.T SECTION 263 OF THE ACT AFTER MAKING DISALLOWANCE U/ S 40(A)(IA) OF THE ACT AT RS.22,19,660/- FOR NON DEDUCTION OF TAX AT S OURCE U/S 194C OF THE ACT. LD. ASSESSING OFFICER OBSERVED THAT TH E ASSESSEE WAS NOT DEDUCTING TAX AT SOURCE U/S 194C OF THE ACT ON ACCO UNT OF SECOND ANIL KHANDELWAL ITA NO.299/IND/2016 3 PROVISO TO SECTION 194(3) OF THE ACT IF THE TRUCK O WNER SUBMITS FORM 15I (RULE 29D(1) OF IT RULES). TRUCK OWNERS CAN GI VE THE DECLARATION ON FORM 15I IF THEY DO NOT OWN MORE THAN TWO TRUCKS . HOWEVER IN THE CASE OF TRUCK OWNER NAMELY SHRI KISHORILAL BIRL A WHO WAS OWNER OF THREE TRUCKS THE ASSESSEE FAILED TO DEDUCT TAX A T SOURCE. IT WAS PLEADED BY THE ASSESSEE THAT IT HAD NO MECHANISM TO VERIFY THE CORRECTNESS OF FORM 15I AND AS PER THE SECOND PROVI SO TO SECTION 194C(3) OF THE ACT IF AT THE TIME OF MAKING PAYMENT TO THE TRUCK OWNER FORM 15I (DULY FILLED) IS SUBMITTED TO THE BU YER I.E. THE ASSESSEE, THEN THERE IS NO LIABILITY TO DEDUCT THE TAX AT SOURCE. LD.A.O WAS NOT CONVINCED WITH THIS SUBMISSION AND H E WENT AHEAD MAKING THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT AT RS.22,19,660/-. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD.CIT(A) AND GAVE DETAILED SUBMISSIONS ALONG WITH THE GISTS OF JUDGMENTS BUT LD.CIT(A) WAS NOT CONVINCED AND THE ASSESSEE FA ILED TO GET ANY RELIEF. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 6. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT FORM NO.15I WAS DULY RECEIVED FROM SHRI KISHORILAL BIRLA AND HE DID ANIL KHANDELWAL ITA NO.299/IND/2016 4 NOT MENTIONED ABOUT THE OWNERSHIP OF THREE TRUCKS R ATHER HE GAVE SEPARATE 15I FORMS DURING THE YEAR MENTIONING THAT HE OWNS ONLY ONE TRUCK. FOR THIS REASON THE TAX WAS NOT DEDUCTED AT SOURCE BY THE ASSESSEE. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT IN THE NORMAL COURSE OF BUSINESS THE ASSESSEE RELIE S ON THE GENUINENESS OF THE DOCUMENTS SUBMITTED BEFORE HIM B Y THE PAYEE. IT IS NOT THE ASSESSEES RESPONSIBILITY TO VERIFY T HE DOCUMENTS SUBMITTED TO IT. THE ASSESSEE CANNOT BE PENALIZED FOR ACTION UNDERTAKEN IN GOOD FAITH AND IN NORMAL PRACTICE OF BUSINESS TRANSACTIONS. THE FORM 15I OBTAINED FROM THE ALLEG ED PAYEE WERE OBTAINED IN A BONAFIDE MANNER WITH THE BELIEF THAT THE SAME ARE GENUINE AND CORRECT. THE ASSESSEE CANNOT BE MADE LI ABLE FOR THE FALSE OR WRONG DECLARATION GIVEN BY THE PAYEE AND T HEREFORE TAX CANNOT BE LEVIED ON THE ASSESSEE ON THIS GROUND THA T THE DECLARATION IN FORM 15I ARE INVALID. HE ALSO ADDED THAT NO CRI TERIA WAS AVAILABLE TO THE ASSESSEE TO VERIFY THE GENUINENESS OF THE FORM 15I NOR ASSESSEE HAS A DUTY TO DO SO IN THE NORMAL COUR SE OF CARRYING OUT ITS BUSINESS. IN SUPPORT OF THIS CONTENTION H E REFERRED AND RELIED ON THE FOLLOWING JUDGMENTS; ANIL KHANDELWAL ITA NO.299/IND/2016 5 (I) STEEL AUTHORITY OF INDIA LIMITED V. ADDITIONAL COMMISSIONER OF COMMERCIAL TAX, JABALPUR AND OTHERS (2012) 56 VS T 84 (MP). (II) THE STATE OF MADRAS VS M/S. RADIO AND ELECTRIC ALS LTD (1967) AIR 234, 1966 SCR 198 (S.C) (III) CIT VS VALIBHAI KHANBHAI MANKAD 216 TAXMAN 18 (GUJ.) (IV) CIT VS SHRI MARIKAMBA TRANSPORT CO. 379 ITR 12 9 (KAR.) (V) CIT VS UNITED RICE LAND LTD 322 ITR 0594 (P&H) (VI) CIT VS POOMPUHAR SHIPPING CORPORATION LTD 282 ITR 0003 (MAD) (VII) CIT-II, INDORE PASSED U/S 263 7. ON THE OTHER HAND LD. DEPARTMENTAL REPRESENTATIV E SUPPORTED THE ORDER OF LOWER AUTHORITIES. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE SOLE ISSUE RAISED BY THE ASS ESSEE IS THAT BOTH THE LOWER AUTHORITIES ERRED IN CONFIRMING THE ADDIT IONS/DISALLOWANCE U/S 40(A)(IA) OF THE ACT AT RS.22,19,660/- ON ACCOU NT OF NON DEDUCTION OF TAX AT SOURCE U/S 194C OF THE ACT. WE FIND THAT THE IMPUGNED DISALLOWANCE WAS MADE FOR THE REASON THAT THE ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF TRANSPORT BOOKING , DID NOT DEDUCT TAX AT SOURCE U/S 194C OF THE ACT IN THOSE CASES WH ERE TRUCK OWNERS SUBMITTED FORM 15I (AS PER RULE 29D(II) OF T HE ACT). DURING ANIL KHANDELWAL ITA NO.299/IND/2016 6 THE YEAR UNDER APPEAL ONE OF THE TRUCK OWNER SHRI K ISHORILAL BIRLA RECEIVED PAYMENT FOR PLYING OF TRUCK AT RS.13,35,25 3/-, RS.3,86,301/- AND RS.4,98,016/- ON THREE SEPARATE D ATES. SHRI KISHORILAL BIRLA FILED THREE SEPARATE 15I FORMS ALO NG WITH THE COPY OF TRUCK REGISTRATION DOCUMENTS. IN THE 15I FORM HE H AS MENTIONED DETAIL OF ONE TRUCK FOR WHICH THE PAYMENT WAS RECEI VED. THE ASSESSEE DURING THE COURSE OF BUSINESS WHILE MAKING THE PAYMENT DID NOT DEDUCT TAX AT SOURCE U/S 194C AS THE TRUCK OWNERS PRESENT/SUBMIT FORM 15I MENTIONING THAT HE DO NOT O WN MORE THAN TWO TRUCKS. HOWEVER DURING THE COURSE OF ASSESSMEN T PROCEEDINGS LD.A.O WHILE GOING THROUGH THE LIST OF TRUCKS VIS- -VIS NAME OF TRUCK OWNERS OBSERVED THAT SHRI KISHORILAL BIRLA OWNS THR EE TRUCKS AND HE THEREFORE CANNOT FILE FORM 15I AND THEREFORE THE AS SESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE U/S 194C WHICH HE FAILED TO DO SO AND THEREFORE DISALLOWANCE U/S . 40(A)(IA) WAS MADE. THIS VIEW OF THE ASSESSING OFFICER WAS CONFIRMED BY LD.CIT(A). 9. WE FIND THAT THERE IS NO DISPUTE AT THE END OF R EVENUE ABOUT THE GENUINENESS OF TRANSACTIONS AND THE PAYMENTS MA DE FOR BOOKING/HIRING TRUCK. NOW THE QUESTION BEFORE US I S THAT WHETHER ANIL KHANDELWAL ITA NO.299/IND/2016 7 THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING DISAL LOWANCE U/S 40(A)(IA) OF THE ACT EVEN WHEN THE ASSESSEE HAS REC EIVED DULY FILLED FORM 15I FROM THE TRUCK OWNERS. 10. WE FIND THAT HON'BLE HIGH COURT OF GUJARAT IN T HE CASE OF CIT VS VALIBHAI KHANBHAI MANKAD (SUPRA) ADJUDICATED TH E VERBATIM SIMILAR ISSUES OBSERVING AS FOLLOWS; 3) WE HAVE HEARD THE LEARNED COUNSEL FOR THE REVEN UE AS WELL AS FOR THE ASSESSEE. SECTION 194C OF THE ACT, AS IS WELL KNOWN , PERTAINS TO PAYMENTS TO CONTRACTORS. SUB-SECTION (1) OF SECTION 194C, AS IT STOOD AT THE RELEVANT TIME, REQUIRED THAT ANY PERSON RESPONSIBLE FOR PAYI NG ANY SUM TO ANY RESIDENT, CONTRACTOR FOR CARRYING OUT ANY WORK IN P URSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND THE SPECIFIED ENTITIES, SHALL CREDIT SPECIFIED SUM AS INCOME TAX ON INCOME COMPRISED THEREIN. LIKE WISE, SUB-SECTION (2) OF SECTION 194C REQUIRED A PERSON RESPONSIBLE FOR P AYING ANY SUM TO RESIDENT-SUB-CONTRACTOR TO DEDUCT TAX AT SOURCE UND ER GIVEN CIRCUMSTANCES. IT IS NOT IN DISPUTE THAT ORDINARILY THE ASSESSEE W AS REQUIRED TO MAKE SUCH DEDUCTION ON THE PAYMENTS MADE TO THE SUB-CONTRACTO RS, UNLESS HE WAS COVERED UNDER THE EXCLUSION CLAUSE CONTAINED IN SUB -SECTION (3) OF SECTION 194C OF THE ACT. SUCH PROVISION, AS IT STOOD AT THE RELEVANT TIME, READ AS UNDER:- 'SECTION 194C(3):- NO DEDUCTION SHALL BE MADE UNDER SUB-SECTION(L) OR SUB- SECTION (2) FROM - (I)THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID TO THE ACCOUNT OF, OR TO, THE CONTRACTOR OR SUB-CONTRA CTOR, IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES: ANIL KHANDELWAL ITA NO.299/IND/2016 8 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 P AYING SUCH SUMS REFERRED TO IN SUB-SECTION (1) OR, AS THE CASE MAY BE, SUB-SECTION (2) SHALL BE LIABLE TO DEDUCT INCOME-TAX UNDER THIS SECTION: PROVIDED FURTHER THAT NO DEDUCTION BALL B MADE UNDE R 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 GO ODS CARRIAGES, ON PRODUCTION OF A DECLARATION TO THE PERSON CONCERNED PAYING OR CREDITING SUCH SUM, IN THE PRESCRIBED FORM AND VERIFIED IN TH E 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 CA RRIAGES AT ANY TIME DURING THE PREVIOUS YEAR: PROVIDED ALSO THAT THE PERSON RESPONSIBLE FOR PAYIN G ANY SUM AS AFORESAID TO THE SUB-CONTRACTOR REFERRED TO IN THE SECOND PRO VISO SHALL FURNISH TO THE PRESCRIBED INCOME-TAX AUTHORITY OR THE PERSON AUTHO RISED BY IT SUCH PARTICULARS AS MAY BE PRESCRIBED IN SUCH FORM AND W ITHIN SUCH TIME AS MAY BE PRESCRIBED; OR (II)ANY SUM CREDITED OR PAID BEFORE THE I' DAY OF J UNE, 1972; OR (III)ANY SUM CREDITED OR PAID BEFORE THE 1' DAY OF JUNE, 1973, IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND A CO-OPERA TIVE SOCIETY OR IN PURSUANCE OF A CONTRACT BETWEEN SUCH CONTRACTOR AND THE SUB-CONTRACTOR IN RELATION TO ANY WORK (INCLUDING SUPPLY OF LABOUR FO R CARRYING OUT ANY WORK) UNDERTAKEN BY THE CONTRACTOR FOR THE CO-OPERATIVE S OCIETY. EXPLANATION-FOR THE PURPOSE OF CLAUSE(I), 'GOODS CA RRIAGE' SHALL HAVE THE SAME MEANING AS IN THE EXPLANATION TO SUB-SECTION ( 7) OF SECTION 44AE.' ANIL KHANDELWAL ITA NO.299/IND/2016 9 4) SECTION 40(A)(IA) OF THE ACT, IN TURN, PROVIDES THAT CERTAIN AMOUNTS SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE TO TAX UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION', NAME LY, PAYMENTS MADE TOWARDS INTEREST, COMMISSION OR BROKERAGE ETC., ON WHICH TAX IS DEDUCTIBLE AT SOURCE AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AF TER DEDUCTION, THE SAME HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SP ECIFIED IN SUB-SECTION (1) OF SECTION 139 OF THE ACT. SECTION 40(A)(IA) OF THE ACT, INSOFAR AS IT IS RELEVANT FOR OUR PURPOSE, READS AS UNDER:- 'SECTION 40(A)(I.):- ANY INTEREST, COMMISSION OR BR OKERAGE, [RENT, ROYALTY,] FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICA L SERVICES PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB -CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDING SUPP LY OF LABOR FOR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVU-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUC TION, [HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SEC TION ( 1 ) OF SECTION 139:]' 5) FROM THE ABOVE STATUTORY PROVISIONS, IT CAN BE S EEN THAT UNDER SECTION 40(A)(IA) OF THE ACT, PAYMENTS MADE TOWARDS INTERES T, COMMISSION OR BROKERAGE ETC. WOULD BE EXCLUDED FOR DEDUCTION IN C OMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUS INESS OR PROFESSION', WHERE THOUGH TAX WAS REQUIRED TO BE DEDUCTED AT SOU RCE, IS NOT DEDUCTED OR WHERE AFTER SUCH DEDUCTION, THE SAME BAS NOT BEE N PAID ON OR BEFORE THE DUE DATE. THUS FOR APPLICATION OF SECTION 40(A) (IA) OF THE ACT, THE FOREMOST REQUIREMENT WOULD BE OF TAX DEDUCTION AT S OURCE. 6) SECTION 194C, AS ALREADY NOTICED, MAKES PROVISIO N WHERE FOR CERTAIN PAYMENTS, LIABILITY OF THE PAYEE TO DEDUCT TAX AT S OURCE ARISES. THEREFORE, IF THERE IS ANY BREACH OF SUCH REQUIREMENT, QUESTION O F APPLICABILITY OF SECTION 40(A)(IA) WOULD ARISE. DESPITE SUCH CIRCUMSTANCES E XISTING, SUB-SECTION (3) MAKES EXCLUSION IN CASES WHERE SUCH LIABILITY WOULD NOT ARISE. WE ARE ANIL KHANDELWAL ITA NO.299/IND/2016 10 CONCERNED WITH THE FURTHER . PROVISO TO SUB-SECTION (3), WHICH PROVIDES THAT NO DEDUCTION UNDER SUB-SECTION (2) SHALL BE MADE FR OM THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PA ID TO THE SUB-CONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAGES, ON PRODUCTION OF A DECLARATION TO THE PERSON CONCER NED PAYING OR CREDITING SUCH SUM IN THE PRESCRIBED FORM AND VERIFIED IT IN THE PRESCRIBED MANNER WITHIN THE TIME AS MAY BE PRESCRIBED, IF SUCH SUB-C ONTRACTOR 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 SEC TION 194C FROM THE LIABILITY TO DEDUCT TAX AT SOURCE UNDER SUB-SECTION (2) WOULD THUS BE COMPLETE THE MOMENT THE REQUIREMENTS CONTAINED THER EIN ARE SATISFIED. SUCH REQUIREMENTS, PRINCIPALLY, ARE THAT THE SUB-CO NTRACTOR, RECIPIENT OF THE PAYMENT PRODUCES A NECESSARY DECLARATION IN THE PRE SCRIBED FORMAT AND FURTHER THAT SUCH SUB-CONTRACTOR DOES NOT OWN MORE THAN TWO GOODS CARRIAGES DURING THE ENTIRE PREVIOUS YEAR. THE MOME NT, SUCH REQUIREMENTS ARE FULFILLED, THE LIABILITY OF THE ASSESSEE TO DED UCT TAX ON THE PAYMENTS MADE OR TO BE MADE TO SUCH SUB-CONTRACTORS WOULD CE ASE. IN FACT HE WOULD HAVE NO AUTHORITY TO MAKE ANY SUCH DEDUCTION. 8) THE LATER PORTION OF SUB-SECTION (3) WHICH FOLLO W THE FURTHER PROVISO IS A REQUIREMENT WHICH WOULD ARISE AT A MUCH LATER POINT OF TIME. SUCH REQUIREMENT IS THAT THE PERSON RESPONSIBLE FOR PAYI NG 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 DECLARATION 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 F URTHER PROVISO OF SECTION 194C(3) ARE SATISFIED, THE LIABILITY OF THE PAYEE T O DEDUCT TAX AT SOURCE WOULD CEASE. THE REQUIREMENT OF SUCH PAYEE TO FURNI SH DETAILS TO THE ANIL KHANDELWAL ITA NO.299/IND/2016 11 INCOME TAX AUTHORITY IN THE PRESCRIBED FORM WITHIN PRESCRIBED TIME WOULD ARISE LATER AND ANY INFRACTION IN SUCH A REQUIREME NT WOULD NOT MAKE THE REQUIREMENT OF DEDUCTION AT SOURCE APPLICABLE UND R UB-SECTION (2) OF SECTION 194C OF THE ACT. IN OUR VIEW, THEREFORE, THE TRIBUN AL WAS PERFECTLY JUSTIFIED IN TAKING THE VIEW IN THE IMPUGNED JUDGMENT. IT MAY BE THAT FAILURE TO COMPLY SUCH REQUIREMENT BY THE PAYEE MAY RESULT INT O SOME OTHER ADVERSE CONSEQUENCES IF SO PROVIDED UNDER THE ACT. HOWEVER, FULFILLMENT OF SUCH REQUIREMENT CANNOT BE LINKED TO THE DECLARATION OF TAX AT SOURCE. ANY SUCH FAILURE THEREFORE CANNOT BE VISUALIZED BY ADVERSE C ONSEQUENCES PROVIDED UNDER SECTION 40(A)(IA) OF THE ACT. 10) WHEN ON THE BASIS OF THE RECORD TT IS NOT DISPU TED THAT THE REQUIREMENTS OF FURTHER PROVISO WERE FULFILLED, THE ASSESSEE WAS NOT REQUIRED TO MAKE ANY DEDUCTION AT SOURCE ON THE PAY MENTS MADE TO THE SUB-CONTRACTORS. IF THAT BE OUR CONCLUSION, APPLICA TION OF SECTION 40(A)(IA) WOULD NOT ARISE SINCE, AS ALREADY NOTICED, SECTION 40(A)(IA) WOULD APPLY WHEN THERE IS A REQUIREMENT OF DEDUCTION OF TAX AT SOURCE AND SUCH REQUIREMENT IS EITHER NOT FULFILLED OR HAVING DEDUC TED TAX AT SOURCE IS NOT DEPOSITED WITHIN PRESCRIBED TIME. 11) WITH RESPECT TO THE TRIBUNAL'S EARLIER JUDGMENT IN CASE OF M/S. SHREE PRAMUKH TRANSPORT CO. LTD., NEITHER SIDE COULD THRO W ANY LIGHT WHETHER THE REVENUE HAD CARRIED THE SAME IN APPEAL OR NOT. HOWEVER, WE HAVE EXAMINED THE QUESTION INDEPENDENTLY AND COME TO OUR OWN CONCLUSION RECORDED HEREIN ABOVE. L2} IN THE RESULT, TAX APPEAL IS DISMISSED. 11. PERUSAL OF THE ABOVE JUDGMENTS CLEARLY STATES T HAT ONCE THE CONDITION OF FURTHER PROVISO OF SECTION 194C(3) OF THE ACT ARE ANIL KHANDELWAL ITA NO.299/IND/2016 12 SATISFIED, THE LIABILITY OF THE PAYEE TO DEDUCT TAX AT SOURCE WOULD CEASE. EXAMINING THE FACTS OF THE INSTANT APPEAL W E FIND THAT THE ASSESSEE RECEIVED FORM 15I FROM THE TRUCK OWNER NA MELY SHRI KISHORILAL BIRLA ON VARIOUS DATES IN WHICH DETAIL O F ONLY ONE TRUCK WAS MENTIONED. THE CONDITIONS PROVIDED IN FURTHER PROVISO OF 194C(3) OF THE ACT WAS DULY COMPLIED AS FORM 15I WA S RECEIVED BY THE ASSESSEE FROM THE TRUCK OWNER WHO WAS STATED TO BE A OWNER OF NOT MORE THAN TWO GOODS CARRIERS. DUE TO THIS REA SON THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE ACCEPTING THE DETAILS PROVIDED IN FORM 15I AS GENUINE. IT IS TRUE THAT SHRI KISHORILAL BI RLA OWNED MORE THAN TWO TRUCKS BUT FOR THE WRONG STATEMENT GIVEN B Y HIM IN FORM 15I THE ASSESSEE CANNOT BE PENALIZED. THE ASSESSEE BEING ENGAGED IN TRANSPORT BUSINESS AND COME ACROSS WITH HUNDREDS OF TRUCK OWNERS AND AT THE TIME OF PAYMENT WHEN FORM NO.15I IS RECEIVED HE CANNOT JUST RAISE DOUBTS ABOUT THE GENUINENESS OF T HE DETAILS MENTIONED THEREIN. IF THE TRUCK OWNERS MAKE WRONG STATEMENT THEN THE REVENUE AUTHORITIES ARE FREE TO TAKE ACTION AGA INST THEM AS PER PROVISIONS OF LAW BECAUSE THE DETAILS ON FORM 15I R ECEIVED BY THE ASSESSEE ARE FURNISHED TO THE COMMISSIONER OF INCOM E TAX WITHIN WHOSE AREA OF JURISDICTION THE OFFICE OF THE CONTRA CTOR IS SITUATED. 12. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANC ES OF THE CASE AND RESPECTFULLY FOLLOWING THE HON'BLE HIGH COURT O F GUJARAT IN THE CASE OF CIT VS VALIBHAI KHANBHAI MANKAD (SUPRA) ARE OF THE CONSIDERED VIEW THAT NO DISALLOWANCE WAS CALLED FOR U/S 40(A)(IA) OF THE ACT AT RS.22,19,660/- MADE BY THE ASSESSING OFF ICER. WE ANIL KHANDELWAL ITA NO.299/IND/2016 13 ACCORDINGLY SET ASIDE THE ORDER OF LD.CIT(A) AND AL LOW THE GROUND NO.1 RAISED BY THE ASSESSEE. 13. GROUND NO.2 BECOMES INFRUCTUOUS AS WE HAVE ALRE ADY DELETED THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT. 14. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.10.20 18. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 12 OCTOBER, 2018 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER ASSTT.REGISTRAR,I.T.A.T., INDORE