ITAT remitted case for verification of Transporter’s declaration u/s 194C(6)

ITAT remitted case for verification of Transporter’s declaration u/s 194C(6) and decide the issue of addition on account of non deduction of TDS afresh

In a recent judgment, ITAT Patna has remitted the issue of disallowance u/s 40(a)(ia) to CIT(A) for verification of Transporter declaration u/s 194C(6) and decide the issue of addition on account of non deduction of TDS afresh.

ABCAUS Case Law Citation:
ABCAUS 4162 (2024) (07) ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming disallowance of 30 percent of amount of Freight paid to the transporters for non compliance of Section 194C(6) of the Income Tax Act, 1961 (the Act).

The assessee was an individual and. His case was selected for scrutiny followed by validly serving notice u/s. 143(2) and 142(1) of the Act. Assessee replied to the questionnaire and also furnished tax audit report.

The Assessing Officer (AO) completed the assessment making inter alia an addition u/s 40(a)(ia) of the Act @ 30% of the amount of freight paid to the transporter for non-deduction of TDS u/s 194C of the Act.

Before the Tribunal the assessee submitted that the details were filed before the lower authorities and since the payments were made to the truck owners having goods carriage not exceeding ten in number and have furnished the declaration along with the PAN, no TDS was required to deducted as per section 194C(6) of the Act. However, the CIT(A) did not consider these details and confirmed the action of the AO.

However, the assessee referring to the impugned order and also the remand report stated that he had furnished complete details u/s 194C(6) of the Act but also admitted that the details were not furnished in the prescribed format u/s 194C(7) of the Act and not furnishing of information u/s. 194C(7) attract penal provisions and that has to be considered separately.

The Tribunal observed that the assessee was required to furnish party wise details of freight payment along with the declaration that the parties receiving such payment do not have more than ten trucks and they hold valid PAN. On one hand, the assessee stated that he had filed the details but on the other hand, CIT(A) had stated that details have not been filed.

The Tribunal further noted that before the Bench also, assessee had not furnished any details except the ledger account but that will not serve the purpose for getting immunity for not deducting tax at source u/s 194C(6) of the Act.

However, considering the prayer of the Counsel for the assessee, the Tribunal remitted the matter to the file of the CIT(A) and the assessee was directed to file party wise details of aforesaid payment of freight along with declaration as prescribed in the law and copy of PAN of each of such payee. On examination of such details and after affording reasonable opportunity of being heard the CIT(A) shall decide in accordance with law. 

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