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Income Tax Appellate Tribunal, CUTTACK ‘SMC’ BENCH, CUTTACK
Before: SHRI CHANDRA MOHAN GARG
This is an appeal filed by the assessee against the order of the
CIT(A),1, Bhubaneswar dated 12.6.2019 for the assessment year 2011-12.
The sole ground raised by the assessee is that the ld CIT(A) is not
justified in confirming the addition of Rs.5,00,000/- made u/s.40(a)(ia) of
the Act.
Ld A.R. of the assessee submitted that non-deduction of TDS while
making deposit to transporter providers on declaration of PAN Number
which came into effect from 1.10.2009. ld A.R. further submitted that the
amended provisions laid down u/s.194C(6) of the I.T.Act, 1961 (in short
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the ‘Act’) is operative w.e.f. 1.6.2015 and payment of Rs.5 lakhs to the
transporter disallowed by the AO u/s,. 40(a)(ia) of the Act on account of
non-deduction of TDS is pertaining to financial year 2010-2011 relevant to
assessment year 2011-12. Therefore, amended provision of sub-section(6)
of Section 194C of the Act cannot be applied retrospectively for making
addition. Ld A.R. submitted that since the amended provision is applicable
from 1.6.2015 i.e. from financial year 2015-16 relevant to assessment year
2016-17 onwards, therefore, the findings of the CIT(A) in para 3.2 of the
order are not sustainable. Hence, the AO may kindly be directed to delete
the addition.
Replying to above, ld D.R. submitted that in pursuance to the order
of Pr. CIT, Bhubaneswar u/s.263 of the Act dated 14.3.2016, the AO was
directed to frame denovo assessment order and in pursuance thereto, the
Assessing Officer passed reassessment order u/s.263/143(3) on 23.12.2016.
Ld D.R. submitted that on the date of passing order, the amendment
inserted by the legislature was operative and effective and, therefore, the
AO was right in making the addition and ld CIT(A) was also correct in
confirming the same. However, on being asked by the bench, ld D.R. could
not controvert that the amendment inserted by Finance Act,2015 to sub-
section(6) of Section 194C has been given effect from 1.6.2015 and there is
no mandate or direction of the legislature to apply the same retrospectively
which may cover assessment year under consideration i.e. 2011-12.
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On careful consideration of the rival submissions, first of all, I may
point out that the amendment has been inserted by Finance Act, 2015 to
sub-section(6) of Section 194C of the Act, which has been held as effective
w.e.f. 1.6.2015, which disentitle the assessee from benefit of first limb of
sub-section (6) of section 194C of the Act as the legislature in its wisdom
added words “where such contractor owns ten or less goods carriage at any
time during the previous year and furnishes a declaration to that effect
along with”. In my humble understanding, the purpose of insertion of said
provisions of sub-section(6) to section 194C was that the legislature in its
wisdom wanted to give relaxation of this provision only in a case where the
contractor owns ten or less goods carriage at any time during the previous
year and furnishes a declaration to that effect alongwith his Permanent
Account Number, to the person paying or crediting such sum” on which
TDS u/s.194C was required to be made.
In my humble understanding, the present case under consideration is
pertaining to payment of amount to contractor by the assessee relates to
assessment year 2011-12 and I am unable to agree with the contention of
ld D.R. that the amended sub-section(6) of Section 194C can be placed into
service against the assessee for assessment year 2012-12 as it is ample
clear from the Finance Act, 2015 that said amended provisions has been
given effect from 1.6.2015 which falls within the ambit of financial year
2015-16. I therefore, hold that the basis taken by the AO and conclusion
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drawn by the CIT(A) in para 3.2 in his order cannot be held as sustainable
and justified and thus, I dismiss the same. The AO is directed to delete the
addition of Rs.5,00,000/-. Hence, the sole ground of the assessee is
allowed.
In the result, appeal of the assessee is allowed.
Order pronounced on 4 /11/2019.
Sd/- (Chandra Mohan Garg) JUDICIAL MEMBER
Cuttack; Dated 4 /12/2019 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Oruganti Sowbhagyam , Balaji Weight Bridge Utkal Ashram Road, near Ganjamkala Parishad, Berhampur
The Respondent. DCIT , Berhampur 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT- 1, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//
By order
Sr.Pvt.secretary ITAT, Cuttack
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