INCOME TAX OFFICER Vs. RAMA NAND AND CO

JUDGEMENT

(1.) RESPONDENTS Nos. 1 to 9 are the partners of the firm in respondent No. 10, M/s. Rama Nand & Co., which is an assessee under the Income-tax Act (hereinafter called "the Act"). The petitioner, Income-tax Officer, Central Circle, Chandigarh, filed nine different complaints under Section 276B read with Section 194C of the Act against the respondents in the court of the Chief Judicial Magistrate, Shimla, pertaining to different assessment years alleging therein that the respondents had violated the provisions of Section 194C of the Act by' failing to deduct tax at source out of the payments made by them to certain sub-contractors named in the complaints and had thus rendered themselves liable for punishment under Section 276B of the Act.

(2.) THE learned Chief Judicial Magistrate observed that the respondents were not "contractors" nor the persons to whom payments are alleged to have been made by them "sub-contractors" within the meaning of Section 194C of the Act and as such they were not required to deduct the amount of tax under Section 194C(2) while making such payments. According to the material brought on the record by the complainant-Income-tax Officer, the respondent firm were only the purchasers of certain quantity of scants of timber and they could not be called contractors. Similarly, the persons to whom they are alleged to have made payments were not their, "sub-contractors". Taking this view of the matter, the learned Chief Judicial Magistrate discharged the respondents in all the complaints.