R.L. Sangani, Judicial Member - (1.) THIS appeal by the asscssee relates to asst. year 1976-77.
(2.) The facts are as follows : The assessce company credited the accounts of M/s. Dipti Industries and M/s. Mehul Industries as follows on the basis of the bills during the financial year 1975 -76 which was the assessee's previous year for asst.year 1976-77:- JUDGEMENT_865_TLIT0_19910.htm These two parties had done job works for the assessee company and the payments had been made for those job works. According to the ITO, the assessee should have deducted tax at source at the rate of 2% as required under the provisions of .section 194C of the Income-tax Act, 1961 but the asscssee did not deduct any tax at source. The ITO initiated proceedings for charging interest under Section 201(1A) of the Act for non-deduction of tax at source and for not crediting the same to the account of the Central Govt. The contention of the asscssee before the ITO was that job work was done as per business of the asscsscc-company without any stipulated terms and conditions" and as such Section 194-C was not applicable. This submission was not accepted by the ITO. The ITO found that particular type of jobs had been given to the said two parties and that one of them charged 20 paisc per piece while the other charged 10 paise per piece and that circumstances indicated that there was oral agreement regarding rates. According to the ITO when there was an agreement as to the rates and the amount exceeded Rs. 5,000, the provisions of Section 194C would be applicable. Each bill in the present case has exceeded Rs. 5,000 and as such the assessee was liable to deduct tax at source and pay to the credit of the Central Govt. in accordance with the provisions of Section 194C of the Act but the assessee has failed to do so. The ITO therefore, levied interest of Rs. 1,933 calculated at 12% per annum for period upto 30-6-1981 by order dated 13-7-1981. Against this order levying interest under Section 201(1A) of the Act the assessee filed appeal before the CIT(A). The CIT(A) agreed with the reasons given by the ITO and confirmed the levy of interest. The assessee is now in further appeal before the Tribunal. The submission of the learned counsel for the assessee before us was that those two concerns had done job works for the assessee and that for these jobs works, the assessee has made payments which have been specified in the order of the ITO. It was submitted that there was no express or implied contract with these two concerns and as such provisions of Section 194C were not applicable. This submission cannot be accepted. A contract could be either in writing or oral. The contract could also be either express or implied. Admittedly, job work had been done by these two parties and payments had been made at particular rate. The circumstances would indicate that there was a contract and under that contract the amounts had been paid at particularrates. Consequently, provisions of Section 194C would be attracted. No other arguments regarding applicability of Section 194C has been raised. Consequently, the main argument in the grounds of appeal would fail.
(3.) IN the course of hearing of this appeal, the learned counsel for the assessee raised an additional ground which pertains to limitation. The said ground was that no order for levy of interest could have been passed on 13-7-1981 in view of the provisions regarding limitation under Section 231 of the Act.;