2016 (1) TMI 496 - AT - Income Tax

Selection of TDS rates - TDS u/s 194C OR 194J - Rectification of mistake - assessee submitted that instead of remitting the mater back to the file of the Assessing Officer, the Tribunal could have decided the issue on the basis of facts and material available on record - Held that - On a perusal of the finding of the Tribunal it is seen that the Tribunal, after analysing the terms of the agreement between the assessee and the service provider and the nature of work undertaken, has observed that the services rendered in pursuance of master service agreement, whether in the nature of payment to a contractor, as envisaged under S.194C or fee for technical services as covered by S.194J, has to be decided keeping in view the terms of Master Service agreement. The Tribunal after considering the principle of law decided by the Hon ble Delhi High Court in the case of Bharti Cellular Limited (2008 (10) TMI 321 - DELHI HIGH COURT ) and the judgment of the Hon ble Supreme Court in the same case, as reported in 2010 (8) TMI 332 - Supreme Court of India finally directed the Assessing Officer to examine the issue of involvement of human element or human interface in the services rendered by the service provider to the assessee to finally determine, whether it is simply a contract as envisaged in S.194C or in the character or nature of technical services as per S.194J. The Tribunal, after considering all the facts and materials on record, having taken a conscious decision to remit the matter back to the file of the Assessing Officer for deciding the issue, thus , the assessee cannot challenge the appropriateness of such a direction, by terming it as a mistake apparent from record. On perusing these Miscellaneous Applications, as well as after considering the submissions of the learned counsel for the assessee, we are of the opinion that in the garb of rectification of mistake, the assessee actually wants a review of the order passed by the Tribunal, which is not permissible in law or within the scope and ambit of S.254(2) of the Act. These applications filed by the assessee, are therefore, devoid of merit, and are liable to be dismissed. - Decided against assessee

Summary

Issues:
Rectification/recall of the order by the Appellate Tribunal under S.254(2) of the Act regarding the nature of services provided by the assessee and the involvement of human interface.

Analysis:

1. Rectification/Recall of the Order:
The assessee sought rectification/recall of the Appellate Tribunal's order dated 29.10.2014 in relation to ITA Nos.956-957 and 1287-1289/Hyd/2013 for the assessment years 2006-07 to 2010-11. The contention was based on the assertion that a mistake apparent from records had entered the order. The assessee argued that the involvement of human intervention in its activities did not automatically categorize the services as technical services. Reference was made to S.194J and S.9(1)(vii) of the Act, emphasizing that human interface, coupled with professional expertise or technical specialization, was necessary to classify a service as technical. The Tribunal directed the Assessing Officer to reexamine the human element in the services provided, which the assessee deemed unnecessary, leading to the application for rectification.

2. Decision of the Tribunal:
The Departmental Representative contended that the Tribunal's decision was well-considered, taking into account all aspects and legal principles. The Tribunal extensively analyzed the facts, materials, contentions of both parties, and relevant judicial precedents. It specifically referenced the agreement between the assessee and the service provider, emphasizing the need to determine if the services fell under S.194C or S.194J based on the terms of the Master Service agreement. The Tribunal's decision to remit the matter to the Assessing Officer for further examination was based on legal principles established by the Hon'ble Delhi High Court and the Supreme Court, as cited in the case of Bharti Cellular Limited. The Tribunal concluded that the direction to reassess the human element in the services provided was a conscious decision and not a mistake apparent from records.

3. Dismissal of Applications:
After reviewing the submissions and applications, the Tribunal found that the assessee's request for rectification was essentially a plea for a review of the order, which fell outside the scope of S.254(2) of the Act. The Tribunal emphasized that the applications lacked merit and were not permissible under the law. Consequently, the applications for rectification/recall were dismissed, affirming the original order of the Tribunal.

In conclusion, the Appellate Tribunal dismissed the assessee's applications for rectification/recall of the order, maintaining that the direction to reassess the involvement of human interface in the services provided was a conscious decision based on legal principles and not a mistake apparent from records.