2019 (1) TMI 802 - HC - Income Tax

TDS u/s 194C OR 194J - short deduction of tds - placement fees/carriage fees paid to cable operators/MSO/DTH Operators - payments for work contract OR fees for technical services - Held that - Revenue fairly states that this question stated concluded against the revenue and in favour of the respondent-assessee in view of the order of this Court in The Commissioner of Income Tax, TDS-2, Mumbai Vs. M/s Zee Entertainment Enterprises Ltd. 2018 (3) TMI 317 - BOMBAY HIGH COURT TDS u/s 194C OR 194J - uplinking charges paid to TV18 India Ltd for uplinking its channels /signals from TV18 s uplinking centre - payments for work contract or fees towards royalty - Held that - We note that Section 194C of the Act specifically defines the scope of work included therein by defining the meaning of work to include broadcasting and telecasting. The work of unlinking charges is an integral part of telecasting the programmes. Thus, the deduction of tax on the above payment would thus clearly fall within Section 194C of the Act. The revenue has not been able to show as to why Section 194C of the Act would not apply in these facts. No substantial question of law. TDS u/s 194C OR 194J - payment for production of programmes - Held that - Tribunal upheld the view of the respondent and the CIT (A) that the payment for production of programmes for broadcasting and telecasting were liable to tax deduction at source under Section 194C of the Act and not under Section 194J of the Act as contended by the Revenue. Tribunal interalia placed reliance upon this CBDT circular bearing No.4 of 2016 dated 29th February, 2016, wherein it has been clarified that payment made by a broadcaster, telecaster to a production house for production of a programme would fall under the defination of work as defined in Section 194C of the Act. No substantial question of law. Assessee in default u/s 201(1) - Held that - In view of the fact that there is no short deduction of tax this question in the present facts would not arise. In the above view, there is no question of entertaining this question.

Summary

Issues involved:
Challenges to common order by Income Tax Appellate Tribunal for Assessment Years 2009-10 and 2010-11; Interpretation of Sections 194C and 194J of the Income Tax Act regarding tax deduction for various services provided; Applicability of tax deduction under different sections for services like placement fees, uplinking charges, and production of programs; Justification of Assessing Officer's order regarding default under Section 201(1) and levy of interest under Section 201(1A).

Analysis:

1. Question (a):
The issue revolves around whether placement fees/carriage fees paid to operators should be considered payments for work contract under Section 194C or fees for technical services under Section 194J. The Court, based on a previous decision, found in favor of the respondent-assessee, stating that the services received were technical in nature, thus not giving rise to any substantial question of law.

2. Question (b):
Regarding uplinking charges paid to a third party, the Tribunal upheld that these charges fall under Section 194C as they are an integral part of broadcasting and telecasting, specifically covered by the definition of 'work' in Section 194C. The Court agreed that the charges for uplinking are part of telecasting programs, hence falling under Section 194C, dismissing the question for lack of substantial legal issues.

3. Question (c):
The payment made for the production of programs was also under scrutiny, with the Tribunal and CIT (A) holding that tax deduction should occur under Section 194C, not 194J as contended by the Revenue. The Court referred to a CBDT circular clarifying that such payments fall under the definition of 'work' in Section 194C, leading to the dismissal of the question due to the clear legal position.

4. Question (d):
This question is related to the Assessing Officer's order on default under Section 201(1) and levy of interest under Section 201(1A), which is consequential to the previous questions. Since there was no short deduction of tax under Section 194C instead of 194J, this question did not arise, and therefore, the Court did not entertain it.

In conclusion, both appeals were dismissed, with no costs imposed, based on the interpretations of Sections 194C and 194J for different services provided, and the consequential nature of the final question based on the previous determinations.