The meaning of carrying out any work under section 194 to 206C of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble High Court tried to explain the meaning of carrying out any work.
Meaning of carrying out any work defined by court
The phrase ‘carrying out any work‘ used in section 194 to 206c of the Income Tax Act came up before various high courts as detailed under :
1. Hon’ble Rajasthan High Court explained the meaning of ‘carrying out any work’ while delivering judgment in Birla Cement Works vs. CBDT  95 taxman 377 (Raj.) as under :
Meaning : The expression ‘carrying out any work’ is the soul of section 194c and the applicability of the section depends upon the interpretation of this expression. The word ‘any’ is a word which excludes the limitation and qualification and can mean ‘all’, ‘each’ and ‘every’. The meaning of this word given in the statute depends upon the context and the subject-matter of the statute and its generality can be restricted by the context in which it has been used.
It has been used as a prefix to the word ‘work’ which means engagement in the performance of a task, duty or the likes. The term ‘work’ covers all forms of physical and mental exertions or both combined for the attainment of some object other than recreation or amusement. The dictionary meaning of the words ‘carrying on’ implies a repetition of acts.
2. Hon’ble ITAT-Pune explained the meaning of ‘carrying out any work’ while delivering judgment in Wadilal Dairy International Ltd. vs. Asstt. CIT  118 taxman 141 as under :
Meaning : The requirement of section 194c is that in order to attract the provisions, the assessee should have made payment to a contractor for carrying out any work, including supply of labour for carrying out any work. The expression ‘contract for carrying out any work’ implies that the contractor should have carried out such activities. The term ‘carrying out’ suggests an executory contract rather than a case of a mere supply or sale of goods.
If a person engages the services of another and gives him a job of manufacturing goods or articles and for the purpose supplies him raw material, it would be a clear case of a contract of work. In such cases, the provisions of section 194c would undoubtedly be applicable. But, if on the other hand, a manufacturer, on his own, purchases material and manufactures product which he sells to the assessee – and it may be that such product might be customer-specific as per the requirement of the customer, it is still a case of a sale and not for carrying out any work.
In such sale which is customer-specific, the fact that the goods manufactured are according to the requirement of the customer does not mean or imply that any work has been carried out on behalf of the contractee. The distinction between a sale and works contract is very significant particularly under the sales-tax laws. Before the introduction of tax on work contract, the sales-tax was levied on sales and it could not be levied on works contract.
In sub-clause (b) of board’s circular no. 681, Dated 8-3-1991, it is stated that where the contractor undertakes to supply any articles or thing fabricated according to the specifications given by the government or any other specified person and the property in such article or thing passes to the government or such person only after such article or thing is delivered, the contract will be a contract for sale and as such outside the purview of section 194c.
As per para (b), even in fabrication contracts if the property in the article passes to the government or other person after its delivery, still it is a case of contract for sale. The fact that fabrication has been carried out as per specification given by the contractee is not considered to be relevant.
Section 194 to 206C of Income Tax Act
194. The principal officer of an Indian company or a company which has made the prescribed arrangements for the declaration and payment of dividends (including dividends on preference shares) within India, shall, before making any payment 62[by any mode] in respect of any dividend or before making any distribution or payment to a shareholder, who is resident in India, of any dividend within the meaning of sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause (e) of clause (22) of section 2, deduct from the amount of such dividend, income-tax [at the rate of ten per cent] :
Provided that no such deduction shall be made in the case of a shareholder, being an individual, if—
(a) the dividend is paid by the company by any mode other than cash]; and
(b) the amount of such dividend or, as the case may be, the aggregate of the amounts of such dividend distributed or paid or likely to be distributed or paid during the financial year by the company to the shareholder, does not exceed 65[five thousand] rupees:
Provided further that the provisions of this section shall not apply to such income credited or paid to—
(a) the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), in respect of any shares owned by it or in which it has full beneficial interest;
(b) the General Insurance Corporation of India (hereafter in this proviso referred to as the Corporation) or to any of the four companies (hereafter in this proviso referred to as such company), formed by virtue of the schemes framed under sub-section (1) of section 16 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972), in respect of any shares owned by the Corporation or such company or in which the Corporation or such company has full beneficial interest;
(c) any other insurer in respect of any shares owned by it or in which it has full beneficial interest;
[(d) a “business trust”, as defined in clause (13A) of section 2, by a special purpose vehicle referred to in the Explanation to clause (23FC) of section 10;
(e) any other person as may be notified by the Central Government in the Official Gazette in this behalf.]
In this article, you can get guidance from high courts on the meaning of carrying out any work under section 194 to 206C of the Income Tax Act.
Updated up to Finance Act 2021