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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 ..... 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. 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 deductions under Section 194C, the Revenue has suffered any loss. In the case of Hindustan Coca Cola Beverages Pvt. Ltd. v. Commissioner of Income Tax, [ 2007 (8) TMI 12 - SUPREME COURT] , the Hon ble Supreme Court noted Circular no.275/201/95-IT (B) dated January 29, 1997, issued by the Central Board of Direct Taxes. The said circular declares that no payment visualized under Section 201(1) of the Income Tax Act should be enforced after the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges are covered by Section 194J of the said Act since such payments were in the nature of fees for professional and technical services. The assessee was held responsible for short deduction and interest thereon. Penalty was also imposed on the assessee under Section 271C and 221(1) of the said Act. 3. At this juncture, it would be helpful and profitable to note the relevant provisions of the said Act. Section 194C in so far as the same is material for the present purpose, provides as follows:- (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to- (i) one per cent. where the payment is being made or credit is being given to an individual or a Hindu undivided family; (ii) two per cent. where the payment is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch services require use of sophisticated equipment for transmission of the assessee s programmes and such equipment was made available to the assessee company for which it had made payments after deducting TDS under Section 194C of the Act. Learned CIT held that Section 194J is not applicable to the facts of the case. In coming to such conclusion, Learned CIT relied on decisions of various High Courts as well as the Income Tax Appellate Tribunal. Learned CIT further recorded that the assessee had provided the details of income tax assessment returns and the PANs of all the companies with whom it had entered into transactions which demonstrated that the said companies duly paid the requisite balance tax amount after allowing for deduction of tax at source at the rate of two per cent under Section 194C. 8. The department carried the matter by way of second appeal before the Income Tax Appellate Tribunal. The Learned Tribunal observed that the case was squarely covered in favour of the assessee by the decision of the Income Tax Appellate Tribunal, Kolkata in the case of M/s Sristi Television (ITA Nos.1297/KOL/2012 276/KOL/2013). The relevant part of that decision extracte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsultancy services? Only then would it amount to payment of fees for technical services and would attract Section 194J. We are in agreement with the submission of Learned Senior Counsel for the assessee that technical services referred to in Section 9(1)(vii) contemplates rendering of a service to the payer of the fee. Mere collection of a fee for use of a standard facility which is available to everybody against payment of a fee, does not amount to the provider of the facility receiving fee for technical services. In the case of Commissioner of Income Tax v. Bharti Cellular Ltd. (2009) 319 ITR 139, the Delhi High Court held that the expression technical services has to be understood in the sense in which it is used in Explanation 2 to Section 9(1)(vii) of the Act and applying the rule of noscitur-a-sociis, the word technical would take colour from the words managerial and consultancy , between which it is sandwiched. Since the words managerial and consultancy involve a personal element, even the expression technical services has to be understood as a service which predominantly involves a personal element. We are in agreement with this view of the Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the aid of the service provider. 16. In Commissioner of Income Tax (TDS) v. UTV Entertainment Television Ltd. (2017) 399 ITR 443, a Division Bench of the Bombay High Court held that when services were rendered as part of a contract accepting placement fees or carriage fees, they were similar to services rendered against payment of standard fees paid for broadcasting of channels on any frequency. The High Court upheld the Commissioner s finding that if the contract was executed for broadcasting and telecasting the channels of the assessee, the payment was covered by Section 194C of the Act. When placement charges were paid by the assessee to the cable operators and multi-system operators for placing the signals on a preferred bandwidth, it was a part of work of broadcasting and telecasting covered by Sub-clause (b) of Clause (iv) of the Explanation 2 to Section 194C. 17. In the case of Commissioner of Income Tax v. Kotak Securities Ltd., (2016) 383 ITR 1, the Hon ble Supreme Court hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 deductions under Section 194C, the Revenue has suffered any loss. In the case of Hindustan Coca Cola Beverages Pvt. Ltd. v. Commissioner of Income Tax, (2007) 293 ITR 226 (SC), the Hon ble Supreme Court noted Circular no.275/201/95-IT (B) dated January 29, 1997, issued by the Central Board of Direct Taxes. The said circular declares that no payment visualized under Section 201(1) of the Income Tax Act should be enforced after the tax deductor has satisfied the Officer-in-Charge of TDS that taxes due have been paid by the deducteeassessee. 21. For the aforesaid reasons we find no ground to interfere with the order of the Learned Tribunal which is impugned before us. The appeal is accordingly dismissed without any order as to costs. 22. Urgent certified photocopy of this judgment and order, if applied for, be given to the parties upon compliance of necessary formalities. I agree. (Thottathil B. Radhakrishnan, CJ.) (Arijit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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