INCOME TAX ACT, 1961

Section 194C

Tax deduction at source - under section 194C - Non-deduction of TDS on payment to transporter -

AO made addition on account of payment made to transporter without deduction of tax at source. Assessee submitted that non-deduction of TDS while making deposit to transporter providers on declaration of PAN Number which came into effect from 1-10-2009. The amended provision laid down under section 194C(6) is operative with effect from 1-6-2015 and payment to the transporter disallowed by AO under section 40(a)(ia) on account of non-deduction of TDS was pertaining to financial year 2010-2011. Therefore, amended provision of sub-section (6) of section 194C could not be applied retrospectively for making addition. Held: Amendment was inserted by Finance Act, 2015 to sub-section (6) of section 194C which was held as operative w.e.f. 1-6-2015, which disentitle assessee from benefit of first limb of sub-section (6) of section 194C “where such contractor owns ten or less goods carriage at any time during the previous year and furnishes a declaration to that effect along with”. Present case pertained to payment of amount to contractor by assessee relates to assessment year 2011-12 and contention of Revenue that amended sub-section (6) of Section 194C can be placed into service against assessee for assessment year 2011-12 could not be accepted as it is ampley clear from the Finance Act, 2015 that said amended provision was given effect from 1-6-2015 which falls within the ambit of financial year 2015-16. Therefore, AO was directed to delete the addition

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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