(15.1.8)    Sub: Deduction of Income Tax at source under Section 194-C of the Income Tax Act 1961 Deduction from payments to Contractors and sub-Contractors. 

Laboratories/Institutes were informed vide this Office Circular No. 17/6n2-Engg. dated 17th November, 1972 (para 15. 1. 1) that the orders contained in the Ministry of Finance (Deptt. of Revenue and Insurance) letter No. 27519172-ITO dt. 29th May, 1972, on the above subject, were not applicable in the case of CSIR and its National Laboratories/Institutes. 

Accordingly, Laboratories/Institutes were advised that no deductions whatsoever on the above account be made from the bills of the Contractors etc. 

However, references have been received from some of the Laboratories/Institutes to the effect that the local Income Tax Officers are not accepting the interpretation contained in the above cited circular letter dated 17th Nov. 1972. 

Accordingly, a reference was made to the Ministry of Finance seeking a clarification in the matter.  Ale Ministry of Finance, Deptt. of Revenue vide their letter No.275/25/92-IT(B) dated 12th March, 1992 have clarified that Societies registered under the Societies Registration Act 1860 are not covered under the provision of Section 194-C of the Income Tax Act 1961. 

You are requested kindly to inform the concerned Income Tax Officers, if necessary, of the clarification given by the Ministry of Finance in their aforesaid letter dated 12th March, 1992. 

(CSIR Letter No 17(6)72-Engg. , dated 28-04-1992).