Commissioner of Income Tax-I vs Gurvinder Transport

Akil Kureshi, J.—Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 12.10.2012 raising following questions for our consideration:

(A) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the disallowance of Rs. 53,89,873/- for non-deduction of tax at source on freight charges on the ground that the assessee has obtained Form No. 15-1 from the sub-contractors without appreciating that the assessee has failed to furnish Form No. 15-1 to the prescribed income tax Authority, being CIT-I, Baroda?

(B) Whether the order of Tribunal is perverse on facts in ignoring the finding of the Assessing Officer that the claim of filing of form No. 15-1 with the CIT-II, Baroda, who was not the prescribed authority, was found to be incorrect on verification of records of the CIT-II, Baroda?

Short issue is with respect to disallowance of sum of Rs. 53.89 lakhs (rounded off) made by the Assessing Officer and confirmed by the CIT(Appeals) u/s 40(a)(ia) of the income tax Act, 1961 ("the Act" for short) on the ground that the payment of transportation charges incurred by the assessee required deduction of tax at source. The assessee had incurred said expenditure for transportation charges by hiring small sub-contractors. Assessing Officer and CIT(Appeals) however, held that necessary requirements of declarations and filing of form 15-I and 15-J were not fulfilled. Hence the orders. The Tribunal however, reversed such decisions making inter alia following observations:

Now the assessee is before us. Ld. Counsel for the assessee, Shri S.N. Soparkar, Sr. Advocate filed a paper book in which serial Nos. 1 to 9 is a copy of form No. 15-I of various truck owners. The assessee has claimed total freight expenses in profit & loss account at Rs. 54,44,101/- at page No. 63 of the paper book. Further, he has given the detail of the freight charges of various trucks, copy of reply before the CIT (A) & copy of return and claimed that the appellant had taken services of subcontractor of small truck owners who did not have truck more than two. Therefore, the appellant had taken 15-I form from individual truck owner. He also relied in case of Vallibhai Khanbhai Mankad, prop. Abad Roadways v. DCIT (OSD), Circle-9, Ahmedabad in ITA No. 2228/Ahd/2009 for A.Y. 2006-07 where similar issue was involved in which the appellant had filed 15-J form before the Commissioner of income tax, there was an inordinate delay of two years and eight months in furnishing of 15-J form before the CIT. Therefore, he requested to delete the addition by following above cited decision. In fact, the appellant had filed the form No. 15-J on 21.04.2006. From the side of the Revenue, Shri C.S. Anjaria, ld. Sr. D.R. Vehemently relied upon the orders of the CIT(A) and Assessing Officer and contended that as per CIT-II, Baroda, record, there was no 15-J form was available whereas the assessee''s jurisdiction to file the 15-J form was with the CIT-I Baroda. Therefore, the appellant has not made compliance of section 194C of the IT Act. Therefore, he prayed to confirm the order of CIT(A).

We have perused the orders of authorities below, gone through the paper book and case law referred by the appellant and heard the arguments of both sides. The assessee is a transporter who had taken services of various small truck owners and freight charges were paid to them without deduction the TDS u/s. 194C of the IT Act. The form No. 15-J has been submitted by the appellant in CIT-II Baroda office (copy of 15-J certificate enclosed in page No. 131 of the paper book with stamp of CIT-II Baroda dated 21.4.2006). Further during the course of assessment proceeding the appellant filed a copy of 15-J certificate to the Assessing Officer who had not doubted in payments of freight charges as non-genuine.

Insofar as the applicability of section 194C(3)(i), as applicable at the relevant time i.e. on 1.4.2008, learned counsel for the Revenue did not raise any dispute with the understanding of the Tribunal of such statutory provisions. He however, vehemently contended that the assessee did not fulfill the procedural requirements for waiver of the requirement of tax deduction at source. He submitted that form 15-1 and 15-J was never produced. The Tribunal therefore, committed an error.

From the impugned judgment we however, note that before the Tribunal itself counsel for the Revenue had contended that there was no ''J'' form available with CIT-II, Baroda whereas the assessee''s jurisdiction to file 15-J form was CIT-I Baroda. Further the Tribunal has recorded that during the course of the assessment proceedings, appellant had filed copy of 15-J form with the Assessing Officer who had not doubted the payment of freight charges as non-genuine. Before the Tribunal the assessee had also filed a paper book pointing out that the assessee is a transporter who had taken services of various small truck owners and freight charges were paid to them.

In view of such facts in our opinion the Tribunal committed no error in holding that disallowance u/s 40(a)(ia) was not justified. No question of law arises. Tax Appeal is dismissed.