TDS exemption is available U/S 194C in case of a declaration, even when the transporter is not the owner: ITAT Jodhpur

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TDS exemption is available U/S 194C in case of a declaration, even when the transporter is not the owner: ITAT Jodhpur

 

 

Adhunik Khanan VA Parivahan Theka Sahakari Samiti Limited Vs. ITO (ITA Nos. 177 to 180/Jodh/2023)

Facts:

  1. The petitioner deductor has the business of transportation and logistic services. A survey was executed at the taxpayer’s business premises deductor for verification of compliance with the provisions of Chapter XVII-B of the Income-tax Act, 1961.
  1. At the time of the survey proceedings, it was revealed that the deductor had made transportation payments to distinct individuals without deducting TDS based on declarations obtained from the vehicle owners.
  1. It is seen that in certain cases the transportation charges are paid to an individual other than the owner of the vehicle based on the power of attorney, Sahmati Patra, and TDS has not been deducted.
  1. The AO mentioned that the declaration received via the taxpayer deductor could not be deemed a valid document under the provisions of Section 194C(6) of the Income Tax Act, 1961. Therefore the taxpayer has not fulfilled the basic condition stated under Section 194C(6) of the Income Tax Act. Hence, the taxpayer deductor is an assessee in default and obligated to file interest. CIT(A) affirmed the order.

The ITAT Jodhpur held as below:

  1. The transporters furnish the declaration including their permanent account number (PAN) to the payer to prevent TDS deduction. The Finance Act 2015 has authorized the revision to Section 194C(6) furnishing the deduction of tax at source till the transporter having the business of playing, hiring, or leasing goods carriages, owns not more than the goods carriages and provides the declaration to this effect including a PAN to the payer.
  1. The term owner suggests anyone in possession of the carriage of the goods and not the registered owner. The term ‘who owns” essentially means the one “who possesses,” and the taxpayer has paid the charges to the person who possesses the vehicle and has also filed the declaration.
  1. Thus, the taxpayer is not liable to deduction of TDS U/S 194C of the Income Tax Act.

 

The copy of the order is as under:

 

1708156627-ITA No. 177 to 180-Jodh-2023 Ms Adhunik Khannan & Parivahan Sahakari Samiti Ltd

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