2018 (2) TMI 299 - AT - Income Tax

TDS u/s 194J - Payment in respect of Transmission charges, wheeling charges, SLDC Charges, Open access Charges, Congestion Charges & Comfort Charges - whether was not in the nature of technical services? - Held that - As decided in assessee s own case for assessment year 2010-11 Tribunal has held that wheeling charges, transmission charges and open access charges etc are not liable to tax deducted at source - Decided in favour of assessee.

Summary

Issues:
Applicability of section 194J of the IT Act on transmission charges, wheeling charges, SLDC charges, open access charges, etc.

Analysis:
1. Background: Two appeals by the Revenue were directed against orders passed by the Commissioner of Income-tax (Appeals) for assessment year 2009-10. The appeals involved identical issues related to the applicability of section 194J of the IT Act on various charges.

2. Assessing Officer's Decision: The Assessing Officer held the assessee companies as assessee-in-default for not deducting Tax at Source (TDS) on payments made for transmission of electricity under various charges, amounting to a significant sum. This led to demands being raised under section 201(1)/201(1A) of the Act in both cases.

3. CIT-(A) Findings: The Commissioner of Income-tax (Appeals) reviewed the submissions and held that the payments made by the assessee under transmission charges, wheeling charges, SLDC charges, etc., were not liable to TDS under section 194J of the Act. The CIT-(A) referred to judicial decisions and concluded that these payments were not in the nature of technical services attracting the provisions of section 194J.

4. Tribunal's Decision: The Tribunal, in earlier cases for assessment year 2010-11, had ruled that similar charges were not liable for TDS. Citing the decision of the jurisdictional High Court in a related case, the Tribunal dismissed the appeals of the Revenue, upholding that the charges were not subject to tax deduction at source.

5. Arguments: The Senior DR argued that the services were technical and should be subject to TDS, while the counsel for the assessee relied on previous Tribunal decisions and the High Court ruling to support the CIT-(A)'s order.

6. Final Decision: The Tribunal, considering the precedent and the High Court's decision, dismissed the Revenue's appeals, affirming that the charges in question were not subject to tax deduction at source under section 194J of the IT Act.

In conclusion, the Tribunal upheld the CIT-(A)'s findings, emphasizing that the transmission charges, wheeling charges, SLDC charges, open access charges, etc., were not in the nature of technical services attracting the provisions of section 194J. The appeals by the Revenue were dismissed based on established judicial precedents and the decision of the jurisdictional High Court.