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TMI Blog2020 (1) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee and not Section 194C. Accordingly, the Assessing Officer had held the assessee liable on account of short deduction and interest thereon to the tune of Rs. 1,46,36,656/-. 2. The brief facts of the case are that the assessee, at all material times, was engaged in the business of media broadcasting and telecasting. It had entered into an Up-linking Service Agreement with one ESSEL Shyam Communication Ltd. (ESCL) for Up-linking and Bandwidth Services as also an Agreement with one Celebrities Management Pvt. Ltd. (CMPL) for Air Time service charges. While making payment to such parties for the services rendered by them, the assessee deducted tax at source in accordance with Section 194C of the said Act. A survey was conducted in the office premises of the assessee company on 20th June, 2011. All documents and records as were called for by the Assessing Officer were supplied by the assessee. Subsequently, the assessment order was passed whereby the Assessing Officer held that the payments made by the assessee to the Multi System Operators on account of channel carriage fees and other payments related to the Up-linking charges and down-linking charges, Bandwidth and Ai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 6. Explanation (b) at the end of Section 194J states that 'fees for technical services' shall have the same meaning as in Explanation 2 to Clause (vii) of sub-section (1) of Section 9. Explanation 2 to Section 9(1)(vii) of the Act provides that 'fees for technical services' means any consideration (including any lump sum consideration) for rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head 'salaries'. 7. The assessee preferred an appeal before the CIT against the order of the Assessing Officer. The CIT in its order held that the services of Uplinking, Bandwidth Services, Air Time and Channel Carriages to Multi System Operators were related to broadcasting and telecasting which is covered specifically by the definition of 'work' in Section 194C(iv)(b) in the Explanation part of the Section. Such services require use of sophisticated equipment for transmission of the assessee's programmes and such equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any one the same is not technical services. Hon'ble Punjab & Haryana High Court in the case of Karukshetra Darpan (P) Ltd. -vs.- CIT (217 CTR 326) has held that telecasting of the programme was covered under Section 194C of the Act." 9. Relying on the aforesaid decision of the ITAT, the Learned Tribunal dismissed the appeal of the department. 10. The Revenue has come up on appeal before us under Section 260A of the said Act. The appeal was admitted by an order dated 23rd September, 2015 on five substantial questions of law which essentially boil down to one issue, i.e., whether it is Section 194C of the said Act or whether it is Section 194J which applies to the facts of the present case. 11. We have heard Learned Counsel for the Revenue/appellant and Learned Senior Counsel for the assessee/respondent in extenso. 12. The moot question is whether the payments made by the assessee to the companies with which it had entered into contracts can be said to be remuneration for the rendering of any managerial, technical or consultancy services? Only then would it amount to payment of 'fees for technical services' and would attract Section 194J. We are in agreement with the submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earning income by allowing customers to avail of the benefit by use of such equipment does not result in providing technical service to the customer for a fee. In the modern world, every instrument or gadget that is used to make life easier is the result of scientific invention or development and involves the use of technology. It would be absurd to suggest that every provider of every instrument or facility used by a person can be regarded as providing technical service. Collection of a 'fee' for use of a standard facility that is provided to all those willing to pay for it would not amount to receipt of fee for technical services. 15. In Commissioner of Income Tax v. DE Beers India Minerals (P) Ltd. (2012) 21 Tax Mann 214, the Karnataka High Court held in the context of Section 9(1)(vii) of the Act that the technical or consultancy service rendered should be of such a nature that it makes available to the recipient technical knowledge, know-how and the like. The service should be such that results in transmitting technical knowledge, etc., so that the payer of the service fee could derive an enduring benefit and utilize the knowledge and know-how on his own in future without t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees do not amount to providing 'technical services' and hence, the payments they received from the assessee cannot be termed as 'fees for technical services'. Therefore, Section 194J is not attracted. 19. In our considered in opinion, it is Section 194C which would apply to the facts of case. The definition of 'work' under that Section is inclusive and specifically includes broadcasting and telecasting. The deductees do broadcasting and telecasting work for the assessee and therefore, Section 194C would apply to the facts of this case. The assessee rightly deducted tax at source at the rate prescribed in Section 194C of the Act and there is no short deduction. We find no infirmity in the order under appeal. The decision of the Hon'ble Supreme Court and the decisions of the other High Courts referred to above clearly support this view. 20. In any event, imposition of penalty on the assessee by the Assessing Officer is not defensible. The relevant tax records of the deductee companies were produced and the CIT found that the said companies have paid entirety of the tax payable after giving credit for the tax deducted at source. It is not that because of the assessee making deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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