2015 (1) TMI 1422 - AT - Income Tax

TDS u/s 194C or 194J - payment made to cable operators/DTH operators for channel placement - assessee is engaged in the business of distribution of television channels - CIT(A) held that the payment for placement of channel falls u/s 194C for the purpose of deduction of tax and not u/s 194J - HELD THAT - The issue is covered in favour of the assessee by the decisions of this Tribunal in the case of ACIT Vs. UTV Entertainment Television Ltd. 2014 (12) TMI 716 - ITAT MUMBAI and ACIT Vs. M/s. NGC Networks (I) Pvt. Ltd. 2014 (11) TMI 484 - ITAT MUMBAI wherein the Tribunal has held that the fee for placement of channel does not fall u/s 194J but the same falls u/s 194C. Hence the CIT(A) has rightly held that the TDS in respect of the payment has to be deducted u/s 194C. TDS u/s 194J or 194C in respect of dubbing charges - HELD THAT - Identical issue was considered and decided by this Tribunal in the case of ACIT Vs. Manish Dutt 2012 (7) TMI 186 - ITAT MUMBAI wherein it was held that the payment made for dubbing work falls under section 194C and not u/s 194I. The Tribunal again in case of UTV Entertainment Television Limited 2014 (12) TMI 716 - ITAT MUMBAI had decided a similar issue as held that assessee had thus carried out the work of dubbing by engaging services and the same was of the nature of getting work done through a sub-contractor. The findings of the CIT(A) in this regard are not in challenge before us. In such circumstances we are of the view that the provisions of section 194C were applicable

Summary

Issues Involved:
1. Applicability of section 194C or section 194J for payment made to cable operators/DTH operators for channel placement.
2. Applicability of section 194J or section 194C for dubbing charges.
3. Liability of the assessee to pay principal tax under section 201(1) without verifying the payment of tax by the deductee cable operators.
4. Levying of interest under section 201(1A) from the date the tax was deductible till the date of the order.

Detailed Analysis:

1. Applicability of Section 194C or Section 194J for Payment Made to Cable Operators/DTH Operators for Channel Placement:
The primary issue was whether the payment made to cable operators/DTH operators for channel placement should be subjected to tax deduction at source (TDS) under section 194C or section 194J of the Income-tax Act, 1961. The assessee deducted tax at source at the rate of 2% under section 194C, while the Assessing Officer contended that the payment should be subjected to TDS at the rate of 10% under section 194J, considering it as a payment for technical services.

The CIT(A) ruled that the payment for channel placement falls under section 194C. This decision was supported by previous Tribunal decisions, including ACIT Vs. UTV Entertainment Television Ltd. and ACIT Vs. M/s. NGC Networks (I) Pvt. Ltd., where it was held that such fees do not fall under section 194J but under section 194C.

The Tribunal reiterated that the work of broadcasting and telecasting, including the production of programs for such broadcasting or telecasting, falls under the definition of "work" as per clause (iv) of the Explanation to section 194C. The Tribunal also referred to the Hon'ble High Court of Punjab & Haryana's decision in Kurukshetra Darpans (P) Ltd. Vs. CIT, which supported the application of section 194C for payments related to broadcasting and telecasting.

2. Applicability of Section 194J or Section 194C for Dubbing Charges:
The second issue was whether the dubbing charges should be subjected to TDS under section 194J or section 194C. The CIT(A) and the Tribunal both concluded that the payment made for dubbing work falls under section 194C and not under section 194J. This conclusion was based on the Tribunal's previous decisions, including ACIT Vs. Manish Dutt and UTV Entertainment Television Limited, where it was held that dubbing work constitutes a contract for carrying out work and thus falls under section 194C.

3. Liability of the Assessee to Pay Principal Tax Under Section 201(1) Without Verifying the Payment of Tax by the Deductee Cable Operators:
The assessee contended that the TDS officer erred in holding the assessee liable to pay the principal amount of tax under section 201(1) without verifying whether the deductee cable operators had paid tax on such income in their respective returns/assessments. This issue was not adjudicated by the CIT(A).

4. Levying of Interest Under Section 201(1A) from the Date the Tax Was Deductible Till the Date of the Order:
The assessee also contended that the TDS officer erred in levying interest under section 201(1A) from the date the tax was deductible till the date of the order under section 201(1)/201(1A) of the Act. This issue was also not adjudicated by the CIT(A).

Conclusion:
The Tribunal dismissed the appeals of the revenue and upheld the CIT(A)'s decision that the payments for channel placement and dubbing charges fall under section 194C and not under section 194J. Consequently, the cross objections filed by the assessee became infructuous. The Tribunal also condoned the delay in filing the cross objections by the assessee, finding the reasons for the delay satisfactory. Thus, the appeals of the revenue and the cross objections of the assessee were dismissed.