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2017 (11) TMI 1154 - AT - Income TaxTDS u/s 194J - Non Deduction of tax at source on payments made to faculty members - CIT-A allowed claim - Held that - Commissioner of Income Tax(A) has held that in view of the judgments of Hon ble Delhi High Court in the case of Commissioner of Income Tax vs NIIT (2009 (9) TMI 42 - DELHI HIGH COURT) and CIT vs Career Launcher India Ltd. (2012 (4) TMI 440 - DELHI HIGH COURT), tax u/s 194J was not deductible at source. However, the fact remains that the assessee s plea of profit sharing with the faculty members is not evident from the facts on record. The ld. Commissioner of Income Tax(A), while deciding the issue in favour of the assessee, has not made reference to any document or evidence which enabled him to reach the conclusion that the faculty members were franchisees of the assessee company and not its employees. Although the ld. Commissioner of Income Tax(A) has held that the faculties were associated with the assessee on a revenue sharing basis, no evidence has been forthcoming from the assessee to justify this claim We are of the view that the ld. Commissioner of Income Tax(A) has not examined the issue in proper perspective and the relief has been granted to the assessee only on the basis of written submissions made before him. We are of the considered opinion that the issue needs reexamination. As no evidence has been filed before us, it would be in the fitness of things if the issue is restored to the file of the ld. Commissioner of Income Tax(A) to examine this issue de novo and adjudicate on the same after considering evidences which the assessee may like to produce before him in this regard. - Decided in favour of revenue for statistical purposes.
Issues:
1. Challenge to order of the ld. Commissioner of Income Tax(A) for assessment year 2009-10 regarding tax demand under sections 201(1)/201(1A) of the Income Tax Act, 1961. 2. Challenge to partial disallowance of assessee's appeal for assessment year 2010-11 under sections 201(1)/201(1A) of the Act. 3. Dispute over deduction of tax at source on payments made to faculties. 4. Dispute over liability to deduct tax at source on rent payments under section 194I of the Act. Analysis: 1. The department challenged the order of the ld. Commissioner of Income Tax(A) for assessment year 2009-10, which partly allowed the appeal of the assessee against the tax demand raised under sections 201(1)/201(1A) of the Income Tax Act, 1961. The department filed appeals against this order, while the assessee filed cross objections. The Assessing Officer raised demands for non-deduction of tax on payments to faculties and rent payments under section 194I. The ld. Commissioner of Income Tax(A) accepted the non-deduction of tax on payments to faculties but confirmed the tax demand for rent payments. 2. The department challenged the decision of the ld. Commissioner of Income Tax(A) in deleting the tax demand under section 194J on payments made to faculty members. The assessee contended that the judgments of the Hon'ble Delhi High Court supported their position. However, the Tribunal found that the ld. Commissioner had not examined the issue thoroughly and granted relief based on written submissions. The Tribunal directed a reexamination of the issue by the ld. Commissioner with proper consideration of evidence. 3. Regarding the liability to deduct tax at source on rent payments under section 194I, the Tribunal found that the ld. Commissioner should reexamine the claim of the assessee that no payments exceeding the threshold limit were made. The Tribunal allowed the cross objections of the assessee for statistical purposes and instructed the ld. Commissioner to obtain a remand report from the Assessing Officer before adjudicating on both issues. 4. Ultimately, the Tribunal allowed the appeals of the department and the cross objections of the assessee for statistical purposes. The matter was remanded back to the ld. Commissioner for a fresh examination of both the issues, emphasizing the need for proper consideration of evidence and a remand report from the Assessing Officer.
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