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

Khivraj & Co., Chennai vs. DCIT Non Corporate Circle 5, Chennai

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

ITA 3234/CHNY/2017[2011-12]Status: DisposedITAT Chennai02 Jan 2019AY 2011-12

Bench: Shri Abraham P.George & Shri Duvvuru R.L.Reddyआयकर अपील सं./I.T.A. No.3234/Chny/2017 िनधा"रण वष" /Assessment Year: 2011-12 M/S. Khivraj & Co., Vs. The Deputy Commissioner Of No. 12, General Muthiah Mudali Street, Income Tax, Sowcarpet, Chennai 600 079. Non Corporate Circle 5, Chennai 600 006. [Pan: Aaafk2848L] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से/ Appellant By : Shri Ajit Kumar Choradia, C.A. ""थ" की ओर से /Respondent By : Shri R. Clement Ramesh Kumar, Addl. Cit सुनवाई की तारीख/Date Of Hearing : 26.11.2018 घोषणा की तारीख /Date Of Pronouncement : 02.01.2019 आदेश / O R D E R Per Duvvuru R.L.Reddy: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 5, Chennai, Dated 26.10.2017 Relevant To The Assessment Year 2011-12. The Assessee Has Raised The Following Grounds: “1. The Order Of The Ld. Ao & Ld. Cit(A) Is Wrong On Facts & In Law. 2. The Ld. Ao & Ld. Cit(A) Erred In His Observation That The Appellant Had Agreed For The Disallowances. 3. The Ld. Ao & Ld. Cit(A) Erred In Disallowing The Appellant'S Claim For Deduction U/S 80-La Of The Income-Tax Act, 1961. :- 2 -:

For Appellant: Shri Ajit Kumar Choradia, C.AFor Respondent: Shri R. Clement Ramesh Kumar
Section 30Section 4Section 4(1)(a)Section 40Section 80Section 80I

Arya Roadways Co.Pvt. Ltd., Kolkata vs. ITO, Ward - 3(3), Kolkata [New ITO, Ward - 12(1), Kolkata]

Appeal is allowed

ITA 1454/KOL/2017[2010-11]Status: DisposedITAT Kolkata26 Dec 2018AY 2010-11

Bench: Shri S.S.Godara & Shri, M. Balaganeshassessment Year :2010-11 Arya Roadways Co Pvt V/S. Ito Ward-3(3), [New Ltd., Tivoli Court, Block-B, Ito Ward-12(1)] Aayakar Bhavana, 7Th Flat-93, 1C, Ballygunge Circular Road, Floor, P-7, Chowringhee Kolkata-700 019 Square, Kolkata-69 [Pan No.Aaeca 9139 M] .. अपीलाथ" /Appellant ""यथ"/Respondent Shri Brijesh Kr. Singh, Advocate अपीलाथ" क" ओर से/By Appellant Shri A.K. Singh, Cit-Dr ""यथ" क" ओर से/By Respondent 06-12-2018 सुनवाई क" तार"ख/Date Of Hearing 26-12-2018 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per S.S.Godara:- This Assessee’S Appeal For Assessment Year 2010-11 Arises Against The Commissioner Of Income Tax (Appeals)-15, Kolkata’S Order Dated 21.02.2017 Passed In Case No.385/Cit(A)-15/15-16/3(3)/R&T/Kol Involving Proceedings U/S 143(3) Of The Income Tax Act, 1961; In Short ‘The Act’. Heard Both The Sides. 2. The Assessee Has Raised Two Substantive Grounds In The Instant Appeal. It Firstly Seeks To Reverse Both The Lower Authorities’ Action Disallowing / Adding Its Freight Charges Of ₹11,68,46,218/- As Well As Loading / Unloading Charges Of ₹10,87,385/- Paid To Various Parties On

Section 139Section 143(3)Section 192Section 201(1)Section 40

M/S Sangita Construction Co., Kolkata vs. ITO, WD-26(1), Kolkata

Appeal is allowed in above terms

ITA 354/KOL/2016[2010-2011]Status: DisposedITAT Kolkata30 Nov 2018AY 2010-2011

Bench: Shri S.S.Godara & Dr. A.L. Sainiassessment Year :2010-11 M/S Sangita V/S. Income Tax Officer, Construction Co. Pujali Ward-26(1), Ayakar Budge Budge, Bhawan Dakshin 2, Kolkata-700138 Gariahat Road (South), [Pa No.Aavfs 7245 L] Kolkata-68 .. अपीलाथ" /Appellant ""यथ"/Respondent Shri A.K. Tibrwal, Fca अपीलाथ" क" ओर से/By Appellant Shri Sandeep Lakra, Addl. Cit-Sr-Dr ""यथ" क" ओर से/By Respondent 22-11-2018 सुनवाई क" तार"ख/Date Of Hearing 30-11-2018 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per S.S.Godara:- This Assessee’S Appeal For Assessment Year 2010-11 Challenges Correctness Of Commissioner Of Income Tax (Appeals)-7 Kolkata’S Order Dated 14.12.2015, Passed In Case No.262Cita-7R/Range-26/14-15, In Proceedings U/S. 143(3)/144 Of The Income Tax Act, 1961; In Short ‘The Act’. Heard Both The Parties. Case File Perused. 2. The Assessee’S First Substantive Ground Seeks To Challenge Correctness Of Both The Lower Authorities’ Action Disallowing / Adding Its Transport Charges Of ₹28,12,459/- On Account Of Non-Deduction Of Tds. The Cit(A)’S Appeal Discussion Qua The Instant Issue Reads As Under:- “2.0 Ground No.2 Is Related To The Addition Of Rs.28,12,459/-. During The Course Of Assessment Proceedings The Assessing Officer Found That The Appellant Made Purchases Of Rs.16,60,901/- From Mr. Dinesh Gupta & Rs.11,51,558/- From M/S S. P Enterprise. The Enquiries Conducted By The A.O Revealed That The M/S S.P Enterprise Was Found To Be Non-Existent. Summons

Section 131Section 143(3)Section 40