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

Gopinathan, Cumbum vs. Income Tax Officer, Theni

In the result, the appeal filed by the assessee is allowed

ITA 25/CHNY/2022[2012-13]Status: DisposedITAT Chennai24 Aug 2022AY 2012-13

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. No. 25/Chny/2022 िनधा"रण वष"/Assessment Year:2012-13 Shri Gopinathan, The Income Tax Officer, No. 37/4, L.F. Road, Opp. To Vs. Ward 1, Government Hospital, Cumbum, Theni. Theni District 625 516. [Pan:Ardpg2494G] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri G. Gopalan (Irs) Ret. Jcit ""थ" की ओर से/Respondent By : Shri Ar V Sreenivasan, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 19.07.2022 घोषणा की तारीख /Date Of Pronouncement : 24.08.2022 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), New Delhi, Dated 12.11.2021 Relevant To The Assessment Year 2012-13. Besides Challenging Confirmation Of Addition Of ₹. 4,66,455/- On Account Of Alleged Infringement Of Section 194C Of The Income Tax Act, 1961 [“Act” In Short], The Assessee Has Also Challenged The Rectification Order Passed Under Section 154 Of The Act On The Pretext

For Appellant: Shri G. Gopalan (IRS) Ret. JCITFor Respondent: Shri AR V Sreenivasan, Addl. CIT
Section 142(1)Section 143(2)Section 143(3)Section 147Section 148Section 154Section 194CSection 194C(6)Section 194C(7)Section 40