The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that mere non-compliance to furnish transportation details could not be said to be the non-compliance of Section 194C(6) of the Income Tax Act, 1961 for making disallowance under Section 40(a)(ia) of the Act.
The assessee, Chandigarh Freight Carrier was a transport company operator and filed its return of income for the year under consideration on 26.09.2015 declaring income. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee.
Assuming jurisdiction conferred upon him by the provision of Section 263 of the Income Tax Act, the PCIT was not convinced with the contention of the assessee and was of the firm belief that since the assessee has not furnished the declaration as per the provision of Section 194C (7) of the Income Tax Act, the AO should have invoked the provision of Section 40(a)(ia) of the Income Tax Act and should have made the appropriate disallowances.
Manish Jain, on behalf of the assessee contended that, that is, all required was to obtain PAN from the parties to whom the payments of freight were made and since the assessee had obtained the PAN from the parties, he had complied with the provision of Section 194C(6) of the Income Tax Act.
Sapna Bhatia, on behalf of the revenue contended that, assessee had not furnished the declaration as per the provision of Section 194C (7) of the Income Tax Act, the AO should have invoked the provision of Section 40(a)(ia) of the Income Tax Act
The two-member Bench of N.K. Billaiya, (Accountant Member), and Anubhav Sharma, (Judicial Member) allowed the appeal, observing that the provisions Section 194(6) of the Income Tax Act had been amended with effect from 01.06.2015 and therefore not applicable for the year under consideration and the only obligation on the assessee was that to obtain the PAN number of the payees which he had obtained.
The Bench further held that the assessee’s failure to provide the required information to the Revenue authorities cannot be used to infer that the assessee has not met with the first statutory requirement, which is to collect the payees’ PANs.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
