Q & A: Non deduction of TDS
P.D.RUNGTA
Query: Non deduction of TDS
Assessee is a partnership firm having transport business and liable to deduct
TDS on lorry hire paid to Truck owners/drivers. assessee collected declarations
in form 15I from payee i.e lorry owners for non deduction of TDS and on that
basis TDS has not been deducted. assessee did not furnish the copies of 15I or
details in 15J on or before 30th june to CIT TDS. whether ITO can make
additions disallowing the related lorry hire payments for non furnishing of the
details of declaration received in 15J. please have group opinion in the
matter.
Reply:1
Dear
Freind,
Since your client was laible to deduct tax u/s 194C, the AO will resort to the
provisions of sec 40(a)(ia) and proceed to make additions to the returned
income. The pre-requisite of obtaining Form 15I and submitting the same to the
concerned CIT (TDS) is mandatory as prescribed in the third proviso to sec
194C(3)(i).
CA Rohit Tulsian
Reply:2
Dear Friend ,
The A.O. can make addition for non submission of
form 15 J within due date before CIT TDS as per provision of law.But however ,
it can be argued that as soon as the forms 15 I
were received by the assessee , his liability to
deduct tax at source ceased and therefore , subsiquent act of non submisssion
of forns 15J should not cast any fresh liability on the assessee and
disallowance should not been made .In my knowledge there is no ITAT or higher
authority judgement. however i have successfully argued this issue before the
CIT and
have got the relief.
paras kochar advocate
10 princep streetkolkata
9831024563
Reply:3
Where a transporter firm has not deducted TDS on payments made to
the Truck owners/ drivers on receipt of Form No. 15I from payees but did not
furnish the copies /details of 15I in Form 15J to the CIT(TDS), in my opinion,
there was substantial compliance of the law and the provision of section
40(a)(ia) should not be applied. But it is always adviseable to file belatedly
the said documents before CIT(TDS) with copies thereof before the A.O. during
assessment proceedings. In the unreported case of Chandan Gopal Shroff, ITA No.
844/K/08, ITAT, Kolkata Bench held that where the loan creditors received Form
No. 15J / 15H but failed to file the same before the appropriate authorities,
there was justification on the part of the assessee for nondeduction of TDS from
interest. Provision of section 40(a)(ia) would not apply in such case. I am in
possession of the ITAT order. If you require, I can
give a copy of the same.
Regards, Subash Agarwal, Advocate (M) 9830052141
Best Regards,
Pramod Dayal Rungta
M.Com.,LL.B.,AICWA.,DISA(ICAI).,FCA
Member EIRC ICAI (2010-12)
P.D.Rungta & Co.
Chartered Accountants
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Avik Chatterjee
X Ltd. has purchased materials from A Ltd. under a valid Purchase Order
and the Materials have also been duly delivered.
Now, A Ltd. is on writing requesting X Ltd. to make the payment in the
name of B Ltd instead of A Ltd.
They are also ready to accept any changes in the payment terms of the
purchase order.
A Ltd. and B Ltd. have no legal connections between them, otherwise.
Now, whether X Ltd. can make the payment in the name of B Ltd instead
of A Ltd. ?
On which grounds it can refuse to make the payment ?
Please give your views.
Regards.
Avik Chatterjee
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