INCOME TAX ACT, 1961

Section 194C

Tax deduction at source - Payment of transport expenses - PAN of transporter not furnished to Prescribed Authority within time - Furnishing of PAN to Prescribed Authority in terms of section 194C(7), whether procedural in nature

Assessee was an individual and engaged in business of manufacturing and trading of engineering hardware. Issue was as regards disallowance of transport expenses paid by assessee to transporters on account of non-deduction of tax at source in terms of section 194C. Case of assessee was that in terms of amendment brought with effect from 1-10-2009, payment for the transport expenses after 30-9-2009 could not be disallowed on account of non-deduction of tax at source as assessee obtained the PAN from transporter. Held: A plain reading of provisions of sub-section 6 of section 194C reveals that the assessee shall not deduct any tax at source on payment made to contractor engaged in business of plying, hiring or leasing goods carriages, on furnishing of his PAN to assessee. There was no ambiguity about the fact that contractor furnished its PAN to the assessee and copy of the PAN was placed. As such contractor discharged its liability by furnishing PAN to assessee for non-deduction of TDS under section 194C(6). Further, requirement under sub-section (7) of section 194C for furnishing PAN to the prescribed authority within the prescribed time and form is procedural in nature. If assessee failed to furnish the requisite form to the prescribed authority within the time, he cannot be made subject to the disallowance of transport expenses on account of non-deduction of tax at source.

Followed:Valibhai Khanbhai Mankad v. Dy. CIT (OSD) (2011) 12 Taxmann.com 160 (Ahd) : 2011 TaxPub(DT) 1775 (Ahd-Trib) and Govind Ram Gupta v. Jt. CIT (2013) 32 Taxmann.com 111 (Ctk) : 2013 TaxPub(DT) 1709 (Ctk-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11

INCOME TAX ACT, 1961

Section 36(1)(iii)

SUBSCRIBE FOR FULL CONTENT