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2017 (11) TMI 1931 - AT - Income TaxTDS u/s 194J - Non deduction of TDS u/s 201(1) - amount paid to Inspectors and Supervisors of the Mid Day Meal programme - HELD THAT - We find that the amounts have been paid as remuneration to various part time workers based on the number of days worked and the payments ranged from ₹ 38702/- to ₹ 64,000/- to different individuals. These are the payments made to Mid Day Meals Scheme Workers which do not attract Section 194J precisely. On perusal of the above Section 194J the payments made to Mid Day Meal Workers at no stretch of imagination can be treated as fees paid for profession or technical services. Hence the interest levied under section 201(1A) is unwarranted. TDS u/s 194C - payment to the buses as used in connection with the arrangement for the sports in the school where children are picked and drop after the annual games - HELD THAT - In this case the buses were used to pick and drop the children for annual games and related activities. It is not a case of entering into a contract for regular use of buses. Since the amounts were minimal and the tax effect is only of ₹ 25,123/-. Further the honorarium paid to counselors under the head wages also do not attract provisions of Section 194C. Keeping in view the peculiar facts and circumstances of this case the addition made is hereby deleted. This deletion cannot be taken as precedence in any other case. Non deduction of tax on payment made under Mid Day Meal Programme and payments for computer instructors and data entry operators - HELD THAT - As before us, the assessee submitted that the payments were made to institutions which were registered under section 12A CIT(A) has remanded the matter back to the file of Assessing Officer for verification. Hence we decline to interfere with the order of the Ld. CIT(A) as it s a matter of verification only at the Assessing Officer s end.
Issues Involved:
1. Appeal against the order of Ld. CIT(A)-1, Gurgaon regarding non-deduction of TDS under sections 194J and 194C. 2. Validity of interest levied under section 201(1A). 3. Creation of additional demand on account of non-deduction of tax at source. Issue 1: Non-deduction of TDS under Sections 194J and 194C The appeal challenged the order of the Assessing Officer and Ld. CIT(A) regarding the non-deduction of TDS under sections 194J and 194C. The appellant argued that the payments made were wages to part-time workers and not professional or technical services as per the provisions of section 194J. The ITAT found that the payments were remuneration to part-time workers under the Mid Day Meals Scheme, which did not attract section 194J. The ITAT referred to the provisions of section 194J and concluded that the interest levied under section 201(1A) was unwarranted. Consequently, the ITAT allowed this ground of appeal. Issue 2: Validity of Interest Levied under Section 201(1A) The appellant contested the interest levied under section 201(1A) by the Ld. CIT(A). The appellant argued that the payments made were not subject to TDS under section 194J as they were remuneration to part-time workers. The ITAT examined the provisions of section 194J and found that the payments made to Mid Day Meal Workers did not qualify as fees for professional or technical services. Therefore, the ITAT held that the interest levied under section 201(1A) was unjustified and allowed this ground of appeal. Issue 3: Creation of Additional Demand on Account of Non-Deduction of Tax at Source The appeal raised concerns about the creation of additional demand amounting to &8377;25,123 under section 194C, which was confirmed by the Ld. CIT(A). The appellant explained that the payments were for buses used in connection with school sports events and were not regular payments to travel agents. The ITAT considered the submissions and noted that the payments were minimal and related to specific events, not regular contracts. The ITAT concluded that the charges paid did not fall under section 194C, and therefore, the addition made by the authorities was deleted. This ground of appeal was allowed by the ITAT. In conclusion, the ITAT allowed all grounds of appeal raised by the assessee, ruling in favor of the appellant against the orders of the Assessing Officer and Ld. CIT(A) regarding the non-deduction of TDS under sections 194J and 194C, the validity of interest levied under section 201(1A), and the creation of additional demand on account of non-deduction of tax at source.
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