ORUGANTI SOWBHAGYAM,GANJAM vs. DCIT, BERHAMPUR

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.

justified in confirming the addition of Rs.5,00,000/- made u/s.40(a)(ia) of

the Act.

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.

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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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.

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.

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

By order

Sr.Pvt.secretary ITAT, Cuttack

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