DCIT, MADURAI vs. ONTIME TRANSPORT COMPANY LIMITED, RAJAPALAYAM

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-1, Madurai, dated 20.10.2016 and pertains to assessment year 2010-11.

Sh.D. Prabhu Mukunth Arun Kumar, Jr. Standing Counsel for Revenue, submitted that the Assessing Officer disallowed ₹36,35,13,737/- under Section 40(a)(ia) of the Income-tax Act, 1961 (in short 'the Act') for non-deduction of tax. Referring to Section 194C(6) of the Act, the Jr. Standing Counsel submitted that there shall not be any deduction while crediting or paying the amount to the contractor for plying, hiring or leasing goods carriages, wherever the contractor owns ten or more goods carriages at any time during the previous year and also files declaration to that effect alongwith his Permanent Account Number. Referring to Section 194C(7) of the Act, the Jr. Standing Counsel submitted that the person responsible for paying or crediting the amount to the person referred to clause (6) or (7) of Section 194C of the Act, is independent to each other, therefore, the CIT(Appeals) is not justified in allowing the claim of the assessee.

On the contrary, Shri V. Jagadisan, the Ld. representative for the assessee, submitted that Section 194C(6) & 194C(7) of the Act are independent sections. According to the Ld. representative, just because there was violation of Section 194C(7) of the Act, there cannot be any disallowance under Section 40(a)(ia) of the Act, if the assessee complies with the requirement of Section 194C(6) of the Act. Moreover, according to the Ld. representative, the CBDT notified the form only on 15.10.2010, therefore, there was no prescribed form for notification. Hence, according to the Ld. representative, the CIT(Appeals) has rightly deleted the addition. 4. We have considered the rival submissions on either side and perused the relevant material available on record. Section 194C(7) of the Act requires that the assessee has to furnish information in the prescribed form. It is not in dispute that the CBDT notified the form only on 15.10.2010 which is admittedly applicable for the quarterly statement due on 15.10.2010 and not before that. Therefore, the CIT(Appeals) has rightly deleted the addition, hence, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

In the result, the appeal filed by the Revenue is dismissed.