AIR 2017 SUPREME COURT 2502 ::(2017) 5 Scale 759 ::AIR 2017 SC (Civil) 1827 ::(2017) 124 Cut LT 463 ::(2017) 4 Mad LJ 585 ::(2017) 3 KCCR 333 ::(2017) 2 Ker LT 99 ::(2017) 2 Orissa LR 64 ::2017 (7) SCC 613 ::(2017) 177 AllIndCas 2 (SC)

Supreme Court Of India

(From : Himachal Pradesh)*

Hon'ble Judge(s): A. K. Sikri, Ashok Bhushan , JJ

Income-Tax Act (43 of 1961) , S.40(a)(ia), S.194C, S.200— Income-Tax Rules (1962) , R.30(2)— Amounts not deductible - Word 'payable' occurring in S. 40(a)(ia) - Refers not only to those cases where amount is payable - But also when it is paid. (2013) 357 ITR 642 (All), Overruled. A conjoint reading of Sections 194-C and 206 would suggest that not only a person, who is paying to contractor, is supposed to deduct tax at source on said payment whether credited in account or actual payment made, but also deposit that amount to credit of Central Government within stipulated time. The time within which payment is to be deposited with Central Government is mentioned in Rule 30(2) of Rules. Thus, Section 40(a)(ia) covers not only those cases where amount is payable but also when it is paid. Once it is found that Sections 194-C and 200 mandate a person to deduct tax at source not only on amounts payable but also when sums are actually paid to contractor, any person who does not adhere to this statutory obligation has to suffer consequences which are stipulated in Act itself. Certain consequences of failure to deduct tax at source from payments made, where tax was to be deducted at source or failure to pay same to credit of Central Government, are stipulated in Section 201 of Act. This Section provides that in that contingency, such a person would be de....