Appeal No 2860NT of 1979
From the Judgment and Order dated 831979 of the Patna High Court in Civil writ jurisdiction case No2909 of 1978
VA Babde RF Nariman and Ms Kamakshi For Gagrat  Co for the appellant
Dr section Narayan P Parmeshwaran and Manoj Prasad for the Respondents
The Judgment of the Court was delivered by VENKATACHALA J
The short question which needs our decision in this appeal by special leave is whether a person who credits to the account of or pays to a contractor any sum payable by any of the organisations specified in section 194C1 of Income Tax Act 1961 the Act  for carrying out any work including supply of labour for carrying out any work in pursuance of a contract between the contractor and the specified organisation is liable to deduct two per cent of such sum as income tax as required under that sub section
The facts which have lad to the need for our decision on the said question are briefly these
The Associated Cement Company Ltd the appellant issued a letter dated 5th November 1973 to Mr
SP Nag contractor Jhiakpani Containing the terms and conditions of a contract of leading packed cement bagsfrom its Packing Plants
Nos1  2 into wagons or trucks
Under clause
12 of those terms and conditions there 541 was a stipulation that the contractor shall be paid a sum for his work at a flat rate of 41 paise for such tonne of cement handled in Packing Plant No1
and 30 paise for each tonne o f cement handled in Packing Plant No2
Clause 13 thereof which contained a recital that the rate of loading in clause 12 had been worked out on the basis of daily basic wages of Rs235 paise DA of Rs 121 paise and HRA of Rs050 paise per day per worker stipulated a term of reimbursement by the appellant to the contract of the difference in DA over the amount of Rs121 paise and annual increment etc
payable from month to month to every worker by him as per the Second Wage Board Recommendation
As the contractor carried out his work according to the terms and conditions in the contract during the years 1973 74 and 1974 75 the appellant made payments of the sums payable to him under clause 12 of the contract and the sums reimbursable to him under clause 13 thereof But the deductions made under section 194C1 of the Act by the appellant out of the sums paid or reimbursed to the contractor fell short of the deductions required to be made thereunder
As the appellant took the stand that it was not liable to deduct any amount under section 1941 out of the sums paid on its behalf to the contractor as per clauses 12  13 of the contract the Income Tax Officer Jamshedpur served on the principal officer of the appellant a notice dated 30th March 1978 to show cause as to why action should not be taken against the appellant under sections 276B1 281 and 221 of the Act in respect of assessment years 1973 74 and 1974 75 for short deductions out of the sums paid to contractor without observing the requirement of section 194C1 of the Act
Another notice dated 8th May 1978relating to the assessment years 1974 75 to 1977 78 of a similar nature was also served on the principal officer of the appellant
The appellant although impugned both the said notices in a Writ Petition filed under Articles 226 and 227 of the Constitution before the High Court of Judicature at Patna that Writ Petition was dismissed by the High Court by its order dated 8th March 1979
The appellant has therefore filed this appeal by special leave before this Court seeking the quashing of the notices which it had unsuccessfully impugned before the High Court in its Writ Petition
It was argued by Mr VA Bobde the learned senior counsel appearing for the appellant that the amount deductible under section 194C1 out of the sums credited to the account of or paid to a contractor would arise only when such sums are paid on account of a contractor executing a works contract that is a contract which produces a tangible property
542 According to him the work  for the the carrying of which the sum is required to be credited to the account of or paid to a contractor under section 194C1 of the Act is only a works contract  and hence deduction under that sub section could arise only to the extent where the sum credited to the account of or paid to a contractor for executing such works contract  is comprised of the element of income profit of the contractor as held by this Court in Brij Bhushan Lal Parduman Kumar etc
vs Commissioner of Income Tax Haryana Himachal Pradesh and New Delhi III 1979 2 SCR 16 and not otherwise
It was also his argument that the words in the sub section on income comprised therein  appearing immediately after the words deduct an amount equal to two per cent of such sum as income tax  found in the concluding part of that sub section must be taken to mean the percentage amount deductible on the income received by the contractor under the contract and not on the sum credited to the account of or paid to the contractor in pursuance of the contract
These arguments were however strongly refuted by Dr section Narayan the learned counsel for the Revenue
It is how the question mentioned at the outset needs our decision
Section 194C1 of the Income Tax Act on the proper construction of which the decision on the aforesaid question should necessarily rest runs thus 194C1
Any person responsible for paying any sum to any resident hereafter in this section referred to as the contractor for carrying out any work including supply of labour for carrying out any work in pursuance of a contract between the contractor and a the Central Government or any State Government or b any local authority or c any corporation established by or under a Central State or Provincial Act or d any company  or e any co operative society  or f any authority constituted in India by or under any law 543 engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning development or improvement of cities towns and villages or for both or g any society registered under the 21 of 1860 or under any law corresponding to that Act in force in any part of India or h any trust or i any University established or incorporated by or under a Central State or Provincial Act and an institution declared to be a University under section 3 of the 3 of 1956  shall at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode whichever is earlier deduct an amount equal to two per cent of such sum as income tax on income comprised therein
 No ambiguity is found in the language employed in the subsection
What is contained in the sub section as appears from its plain reading and analysis admit of the following formulations 1 A contract may be entered into between the contractor and any of the organisations specified in the sub section
2 Contract in Formulation 1 could not only be for carrying out any work but also for supply of labour for carrying out any work
3 Any person responsible for paying any sum to a contractor in pursuance of the contract in Formulations 1 and 2 could credit that sum to his account or make its payment to him in any other manner
4 But when the person referred to in Formulation 3 either credits the sum referred to therein to the account 544 of or pays it to the contractor he shall deduct out of that sum an amount equal to two per cent as income tax on income comprised therein
Thus when the percentage amount required to be deducted under the sub section as income tax is on the sum credited to the account of or paid to a contractor in pursuance of a contract for carrying out a work or supplying labour for carrying out a work of any of the organisations specified therein there is nothing in the sub section which could make us hold that the contract to carry out a work or the contract to supply labour to carry out a work should be confined to works contract  as was argued on behalf of the appellant
We see no reason to curtail or to cut down the meaning of plain words used in the Section
Any work means any work and not a works contract which has a special connotation in the tax law
Indeed in the sub section the work  referred to therein expressly includes supply of labour to carry out a work
It is a clear indication of legislature that the work  in sub section is not intended to be confined to or restricted to works contract  Work  envisaged in the sub section therefore has wide import and covers any work  which one or the other of the organisations specified in the sub section can get carried out through a contractor under a contract and further it includes obtaining by any of such organisations supply of labour under a contract with a contractor for carrying out its work which would have fallen outside the work  but for its specific inclusion in the sub section
In Brij Bhushan supra this Court was concerned with the question whether the cost of materials supplied by the Government for being used in execution of works is liable to be taken into consideration while estimating the income or profits of a contractor
That question was answered by this Court thus It is true that ordinarily when a works contract is put through or completed by a contractor the income or profits derived by the contractor from such contract is determined on the value of the contract as a whole and cannot be determined by considering several items that go to form such value of the contract but in our view where certain storesmaterial is supplied at fixed rates by the Department to the Contractor solely for being used or 545 fixed or incorporated in the works undertaken on terms and conditions mentioned above the real total value of the entire contract would be the value minus the cost of such storesmaterial so supplied
Therefore since no element of profit was involved in the turnover represented by the cost of storesmaterial supplied by the MES to the assessee firms the income or profits derived by the assessee firms from such contracts will have to be determined on the basis of the value of the contracts represented by the cash payments received by the assessee firms from the MES Department exclusive to the cost of the material stores received for being used fixed or incorporated in the works undertaken by them
 The above decision cannot be of any help to the appellant for it does not lay down that the percentage amount deductible under section 194C1 should be out of the income of the contractor from the sum or sums credited to the account of or paid to him
The words in the sub section on income comprised therein  appearing immediately after the words deduct an amount equal to two per cent of such sum as income tax  from their purport cannot be understood as the percentage amount deductible from the income of the contractor out of the sum credited to his account or paid to him in pursuance of the contract
Moreover the concluding part of the sub section requiring deduction of an amount equal to two per cent of such sum as income tax by use of the words on income comprised therein  makes it obvious that the amount equal to two per cent of the sum required to be deducted is a deduction at source
Indeed it is neither possible nor permissible to the payer to determine what part of the amount paid by him to the contractor constitutes the income of the latter
It is not also possible to think that the Parliamer  could have intended to cast such impossible burden upon the payer nor could it be attributed with the intention of enacting such an impractical and unworkable provision
Hence on the express language employed in the sub section it is impossible to hold that the amount of two per cent required to be deducted by the payer out of the sum credited to the account of or paid to the contractor has to be confined to his income component out of that sum
There is also nothing in the language of the sub section which permits exclusion of an amount paid on behalf of the Organisation to the contractor according to clause 13 of the terms and conditions of the contract in reimbursement of the amount 546 paid by him to workers from the sum envisaged therein as was suggested on behalf of the appellant
For the foregoing reasons our decision on the question under consideration is held in the affirmative and in favour of the Revenue
In the result this appeal fails and is dismissed directing the appellant to pay the costs of the respondent the Revenue in this appeal
Advocate s fee is fixed at Rs 3000
TNA Appeal dismissed


Summary:
The appellants who were the hereditary worshippers called Guravs of the Shree Dnyaneshwar Sansthan of Alandi claimed to be its owners
The respondents as trustees of the said Sansthan dismissed eleven of the Guravs in 1911 served a notice on the rest calling upon them to agree to act according to the orders of the Temple committee and appointed six Brahmins to carry on the services of the Sansthan
The Guravs did not agree and sued the respondents for a declaration of their rights of ownership and consequential reliefs
That litigation ended in the High Court in 1921 with the result that their claim of ownership stood rejected but their rights as hereditary worshippers were left open
Thereafter the Guravs took forcible possession of the temple on July 251922
The trustees brought a suit under section 9 of the Specific Relief Act on September 12 1922 and obtained a decree on November 4 1932
In execution of that decree the Guravs were dispossessed
The suits out of which the present appeals arise were filed by the appellants against the trustees for declaration of their rights as hereditary servants of the Sansthan a permanent injunction restraining the trustees from obstructing them in the exercise of the said rights and accounts
The respondents claimed that the appellants were servants of the Temple committee and had no hereditary rights as claimed by them even if they had their claim to such rights was barred by limitation
The trial Court decreed the suits
In appeal the High Court while agreeing with the trial court on the merits disagreed on the question of limitation held the suits to be barred by limitation under article 120 Of the Limitation Act the cause of action arising either on the filing of the section 9 suit by the respondents or in any event on the date when the said suit was decreed section 23 of the Act having no application and allowed the appeals
It was contended on behalf of the appellants in this Court that the suits were governed by article I24 Of the Limitation Act and even if article 120 applied section 23 saved limitation
Held that the High Court was right in holding that article 120 and not article 124 of the Limitation Act applied and that section 23 had no application to the suits in question
477 Article 124 Of the Limitation Act applies only where the cause of action for the suit is wrongful dispossession of the plaintiff and adverse possession by the defendant in respect of the hereditary office in question
In such suits the contest usually is between rival claimants to the hereditary office and not between such claimants and trustees
It is impossible to ignore the provision Of Col 3 to that article in deciding its applicability
Kunj Bihari Prasadji vs Keshavlal Hiralal Bom
567 and jalim Singh Srimal vs Choonee Lall Johurry  held inapplicable
Thathachariar vs Singarachariar AIR 1928 Mad 377 ap proved
Annasami vs Advarachari ILR  distin guished
Jhalandar Thakur vs jharula Das Cal 2444 referred to
Section 23 Of the Limitation Act refers not to a continuing right but to a continuing wrong
A continuing wrong is essentially one that creates a source of continuing injury as opposed to one that was complete and makes the doer liable for such continuance
A completed inJury would not be a continuing wrong even though it might give rise to continuing damage
Thus tested the injury to the appellants resulting from the decree obtained by the trustees in the section 9 suit which amounted to a ouster was complete at the date of the ouster and section 23 Of the Limitation Act could not apply so as to save limitation
Choudhury Bibhuti Narayan Singh vs Maharaja Sir Guru Mahadeu Asram Prasad Saki Bahadur Pat 208 and Khair Mohammad Khan vs Mst
jannat Lah 22 referred to
Maharani Rajroop Koer vs Syaed Abdul Hossein 1880 LR 7 IA 240 and Hukum Chand vs Maharaj Bahadur Singh 1933 LR 60 IA 313 distinguished and held inapplicable