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TMI Blog2021 (11) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... ax at source under section 194C. We draw strength from the decision of Senior Manager (Finance), Bharat Heavy Electricals Ltd. [ 2016 (12) TMI 955 - PUNJAB AND HARYANA HIGH COURT] where contract was for erection, installation, commissioning, testing and trail operations of various equipment and other related machinery and that under the terms of the contract it was the duty of the contractor to provide all type of labour, supervisors, engineers, inspectors, etc., for execution of the project, the AO held that section 194J is applicable as the level of human interaction was high and sophisticated. Commissioner of Income-tax (Appeals) however held that the scope of the work given to the sub-contractor did not fall in the scope of technical services merely because technical persons were employed in execution of contract and therefore, tax is deductible only under section 194C. No professional or technical services were rendered to the assessee rather the persons were employed by the parties for execution of the contract and thus tax is deductible under section 194C of the Act. While reaching to this conclusion, we also relied upon the decision in the case of Rajasthan Council o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conference in view of the prevailing situation of Covid-19 pandemic. 5. The brief facts of the case are that the assessee is a District Project Officer of Sarva Shiksha Abhiyaan (SSA), Dhoipur which implements this program under the aegis of M/s. Rajasthan Council of Elementary Education (RCEE), established by the Government of Rajasthan as a nodal agency for implementation of Sarva Shiksha Abhiyaan. It receives funds from the Government of India and Government of Rajasthan to execute the Sarva Shiksha Abhiyaan Program. The funds received under the Sarva Shiksha Abhiyaan program are utilised mainly for installation of computers in Government primary schools and for administrative expenses (teacher's salary, etc.) District Project Co-ordinator (DPC) monitors the implementation of the program through block level offices and School Management Committees. The Rajasthan Council of Elementary Education implemented the Sarva Shiksha Abhiyaan program with the following contractors : (i) M/s. Pearson Education Services Private Ltd., 10, 3rd Main Ashwani Layout, Off Immediate Ring Road, Ejipura Kormargala, Bengal uru-560 047. (ii) M/s. Compucom Software Ltd. : IT-14-15, EPIP, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d above. 8. We, found perusal of the record that in the first round of litigation, the assessee preferred appeal before the co-ordinate Bench of this Tribunal and co-ordinate Bench vide order dated June 30, 2017 had dismissed both the appeals filed by the assessee. Against which, the assessee preferred appeal before the hon'ble High Court under section 260A of the Act. The hon'ble High Court, Jaipur Bench had allowed the appeals filed by the assessee in D. B. I. T. A. No. 33 of 2018 for the assessment year 2013-14 and D. B. I. T. A. No. 32 of 2018 for the assessment year 2014-15 titling District Project Officer, Dholpur v. Pr. CIT. And vide its common order dated December 18, 2018 restored the matter back to the Income-tax Appellate Tribunal to decide the same afresh. Therefore, now the matter has again taken up before us for deciding the same afresh. 9. We have considered the rival contentions and carefully perused the material placed on record. From perusal of the record we observed that from the terms and conditions of bid documents, it is clear that the contract is given for procurement of hardware and services for computer-based education in schools and not for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in the technical section and related services of the bid document in 208 existing CALP schools (tentative list may be seen in the office). (b) Maintenance of the services under contract as per SCC clause 21. (c) To provide project manager at State level for co-ordination and implementation of the project during the contract period. (d) Related services include as per GCC clauses 8, 9, 10, 11 and 12 and SCC clause 20. 10. From the above terms and conditions, it can be noted that the entire contract is for supply of computer hardware, software, connected accessories, UPS, furniture, stationary, consumables, etc., and this contract is to be carried out by the contract through its own personnel. Thus, it is a simple contract of carrying out a work. Section 194J applies to a person responsible for paying to any resident any sum by way of fees for professional/technical services. In the present case, the contractor has not made available any technical services to the assessee but has only provided the computer hardware, software, etc., and employed his own personnel for implementing the same in various schools as per the terms and conditions of the contract. Hence, se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services rendered to the asses see. 11. It is also important to mention here that all the above contractors are assessed to tax and have included the amount so paid in their income and paid tax thereon and therefore, no demand under section 201(1) can be raised in view of the proviso to section 201(1) of the Act. In case of Rajasthan Council of Elementary Education also no demand under section 201(1) was raised by the Assessing Officer. Therefore, keeping in view the above discussion with regard to factual matrix of the present case, we found that no professional or technical services were rendered to the assessee rather the persons were employed by the parties for execution of the contract and thus tax is deductible under section 194C of the Act. While reaching to this conclusion, we also relied upon the decision in the case of Rajasthan Council of Elementary Education wherein on the same facts, it was held that the agreement is a contract for carrying out a work and therefore, taxes required to be deducted at source under section 194C and not under section 194J of the Act, therefore, we direct to delete the addition. Hence, grounds raised by the assessee are allowed. 12. N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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