Section 194C of the Income Tax Act

Income-tax Act, 2025: s.393

Section 194C of the Income-tax Act, 1961 corresponds to section 393 (Tax to be deducted at source) of the Income-tax Act, 2025.

Read section 393 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 194C is Hindustan Coca Cola Beverage Pvt. Ltd. v. CIT (293 ITR 226), cited in 576 of the 2,696 judgments on BharatTax that turn on this section.

Leading authorities on Section 194C

Hindustan Coca Cola Beverage Pvt. Ltd. v. CIT
293 ITR 226 · 2007 · Supreme Court
576
citing judgments

The deductor cannot be treated as an assessee-in-default under Section 201(1) if the deductee has already paid the tax or offered the impugned receipts in their return of income. However, interest under Section 201(1A) for delayed deposit of tax can still be levied up to the date of filing of the return of income by the deductee.

Allied Motors (P) Ltd. v. CIT
224 ITR 677 · 1997 · Supreme Court
398
citing judgments

Amendments to the Income-tax Act that are curative, clarificatory, or beneficial in nature apply retrospectively from the date the original statutory provision was introduced, even if not explicitly stated.

Nikunj Eximp Enterprises v. CIT
216 Taxmann 171 · 2013 · High Court
325
citing judgments

Purchases may be treated as genuine even if the purchase parties are untraceable or not available for verification, as long as there is no specific evidence from the parties themselves denying the transactions or proving them to be bogus.

CIT v. Eli Lily & Co.
312 ITR 225 · 2009 · Supreme Court
221
citing judgments

Section 195 of the Income Tax Act, which mandates tax withholding on payments to non-residents, applies only to sums that are otherwise chargeable to tax under the Act. Tax withholding provisions are not charging provisions.

CIT v. Ralson Industries Ltd. 5
288 ITR 322 · 2007 · Supreme Court
153
citing judgments

The Supreme Court affirmed that lower authorities are bound by decisions of higher authorities due to judicial discipline. It also clarified that the Commissioner, in exercising revisional power under Section 263, can conduct necessary inquiries to determine if an assessment is prejudicial to the Revenue.

Goodyear v. State of Haryana
188 ITR 402 · 1991 · Supreme Court
94
citing judgments

A reasonable construction of a taxing statute should be followed, and a literal construction should be avoided if it defeats the manifest purpose and object of the Act.

Maruti Udyog v. DCIT
92 ITD 119 · 2005 · ITAT
87
citing judgments

The onus is on the revenue to establish the nexus between expenses incurred and exempt income before making a disallowance under section 14A.

CIT v. Vector Shipping Services (P) Ltd.
357 ITR 642 · 2013 · High Court
87
citing judgments

Section 40(a)(ia) of the Income-tax Act, 1961, applies only when an amount is payable (accrued) and not when the amount has already been disbursed or paid.

Carborandum Co. v. CIT
108 ITR 335 · 1977 · Supreme Court
87
citing judgments
Sodex SVC India (P) Ltd. v. DCIT (TDS) 2(2)
92 Taxmann.com 260 · 2018 · ITAT
86
citing judgments

A statutory provision is not construed to have retrospective operation unless such a construction is explicitly stated in the Act or arises by necessary and distinct implication.

Judgments on Section 194C

M/S. Shree Shyamjee Constructions Private Limited, Bagdehi vs. ITO (TDS), Sambalpur

In the result, appeal of the assessee is allowed

ITA 215/CTK/2023[2017-18]Status: DisposedITAT Cuttack23 Apr 2024AY 2017-18

Bench: Shri George Mathan & Shri Manish Agarwalआयकर अऩीऱ सं/Ita No.215/Ctk/2023 (ननधाारण वषा / Assessment Year : 2017-2018) Shree Shyamji Constructions Vs Income Tax Officer(Tds), Pvt. Ltd., Sambalpur Main Road, Bagdehi, District : Jharsuguda-768220 Pan No. :Aajcs 0480 J (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) .. ननधााररती की ओर से /Assessee By : Shri M.K.Kedia, Ar राजस्व की ओर से /Revenue By : Shri S.C.Mohanty, Sr. Dr सुनवाई की तारीख / Date Of Hearing : 23/04/2024 घोषणा की तारीख/Date Of Pronouncement : 23/04/2024 आदेश / O R D E R Per Bench : This Is An Appeal Filed By The Assessee Against The Order Dated 07.04.2023, Passed By The Cit(A)-2, Bhubaneswar In Din & Document No.Itba/Apl/S/91/2023-24/1051928453(1) For The Assessment Year 2017-2018 2. It Was Submitted By The Ld. Ar That The Assessee Is In Construction Business Has Purchased Cement & Bricks From Ocl India Ltd. & Shivkashi Enterprises, Respectively. It Was Submitted That The Purchases Were On For Sales Meaning That The Bill, Purchase Cost Included The Cost Of Transportation. It Was The Submission That For The Purpose Of Billing The Supplier Had Shown Freight Separately But The Assessee Has Paid Consolidated Amount For The Purchase Of The Material. The Assessee Has Not Undertaken The Transportation Of The Cement Or Bricks On Its Own. It 2 Was The Submission That The Ao On The Ground That The Assessee Has Shown The Transportation Cost As Per The Bills Separately In Its Account, Had Held That The Assessee Had Not Deducted Tds As Per The Provisions Of Section 194C Of The Act & Consequently Levied A Liability U/S.201 Of The Act. It Was The Submission That This Liability Was Upheld By The Ld. Cit(A). Ld. Ar Placed Before Us A Copies Of The Bill For The Purchases, Which Are As Follows :-

For Appellant: Shri M.K.Kedia, ARFor Respondent: Shri S.C.Mohanty, Sr. DR
Section 194CSection 201