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TMI Blog2023 (4) TMI 1347X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to be subject to deduction of tax at source under section 194C - Decided in favour of assessee. - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee: Shri K.C. Thacker, A.R. For the Revenue : Shri B.D. Gupta, Sr. D.R. ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- These two appeals filed by the assessee for A.Y. 2014-15 2015-16, arise from order of the CIT(A), Rajkot-2 dated 06-03-2020, in proceedings under section 250 of the Income Tax Act, 1961; in short the Act . 2. Since common issues are involved for both the years under consideration, both the appeals are being taken up together. We shall first take up the appeal for assessment year 2014-15 and our observations for this year would equally apply to assessment year 2015-16 as well. Assessment year 2014-15: 3. The assessee has taken the following grounds: Grounds of Appeal Tax effect relating to each Ground of appeal (see note below) 1. On the facts and circumstances of the case and in law, the learned CIT-(A) has erred in law and on facts in confirming the order passed by the Learned AO U/s. 201(1) r.w.s. 201 (1A) of the Act and in directing that tax is required to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom 15-3-2021. Thereafter, in the case of Cognizance for Extension of Limitation, In re [2022] 134 taxmann.com 307 (SC) , held that in view of spread of new variant of COVID-19 and drastic surge in number of COVID cases across the country, period from 15-3-2020 till 28-2-2022 shall stand excluded for purpose of limitation as may be prescribed under any general or special law in respect of all judicial or quasi-judicial proceedings. in cases where limitation would have expired during period between 15-3-2020 till 28-2-2022, notwithstanding actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 1-3-2022; in event actual balance period of limitation remaining, with effect from 1-3-2022, is greater than 90 days, that longer period shall apply In view of the above, since the delay of 298 days in filing appeal is falling within the Covid pandemic period, the delay is hereby being condoned. 5. The brief facts of the case are that the survey under section 133A of the Act was carried out at the office premises of the assessee on 28-11-2014 for verification of TDS compliance. The assessee is a partnership firm engaged in the business of manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y states that such charges were paid for technical services. Invoice No. date Invoice Sr. No. Description Amount SGSL/SER/14-15/ 9405030204 dtd.01.04.14 1 Technical Services covering checking of various technical, safety and operational parameters of the Equipment. 1,37,812.50 SGSL/MNT/1 4-15/9405032404 dtd.01.04.201 4 1 Towards preventive maintenance and upkeep of Renewable Energy Device/Wine Mills including labour and materials 5,51,250.00 2 Towards Breakdown Repairs of Renewable Energy Devices/ Wind Mills including labour and materials 9,64,687.50 SGSL(0 M)/ MNT/1 3- 14/9305032959 dtd.01.01.201 4 1 Towards preventive maintenance and upkeep of Renewable Energy Device/Wind Mills including labour and materials 5,51,250.00 2 towards Breakdown Repairs of Renewable Energy Devices/ Wind Mills including labour and materials 9,64,687.50 SGSL(0 M)/ SER/13-14/ 9305030761 dtd.01.01.201 4 1 Technical Services copying checking of various technical, safety and operational Parameters of the Equipment. 3,30,750.00 Total 35,00,437/- The appellant's claim is devoid of merit and it is accordingly held that the appellant had paid for technical services for Rs.35,00,437/- therefore liable to dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant agreements for our perusal. We observe that in the first agreement: Operation and Maintenance Agreement (services only), the scope of work is as below: 2.1 Operation and Management Services SISL shall perform the following services in relation to the Equipment in accordance with the safety management plans and procedures as applicable and/or in accordance with accepted industry practices: Services involving Labour only I Routine Post operative and other operational Services Making available suitable manpower for operation and management of the Equipment and covers periodic preventive management, cleaning and upkeep of the Equipment including a) Tower Torqning b) Blade Cleaning c) Nacelle Torquing and Cleaning 4) Transformer Oil Filtration e) Control Panel LT Panel Maintenance i) Site and Transformer Yard Maintenance II Security Services As mentioned in Clause 5.5 III Management Services a) Data logging in for power generation, grid availability, machine availability. b) Preparation and submission of monthly performance report, c) Taking monthly meter reading jointly with SEE, of power generated at Firm's Wind Farm and supplied to SEB Grid from the meter/s maintained b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icants and oils,, minor/ low value electrical and mechanical parts, etc. for preventive maintenance and upkeep of the Equipment including a) HT Line and Electrical Maintenance b) Greasing of Rotor Bearings, Gear Box and Generator c) Topping up of Gear Box, Hydraulic and Transformer Oil II Curative maintenance/ Breakdown Repair Work involving labour and materials The Breakdown repair Work involve labour and use of components, spares and consumables in the event of any breakdown or suspected breakdown due to any reasons excluding natural calamities which shall be covered by insurance company, in the Equipment or any part thereof, The breakdown shall be attended as soon as practically possible to put the Equipment back into operation. The breakdown repairs will cover cost of labour, spares/ materials and other works, which includes, a) Spares repairs/replacement b) Major breakdown as mentioned below Rewinding/Repairs of Generator and Motors Rewinding/Replacement of Gear Box Rewinding/Repairs of Transformers Repairs/replacement of VCB Repairs/replacement of Blades Repairs/replacement of Controller and Control Panel e) Crane charges for carrying out repairs/replacement. d) Total replace ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 194J was not applicable. Therefore, impugned order passed by revenue authorities was not sustainable. In the case of DDRC SRL Diagnostic (P.) Ltd. v. ITO 65 taxmann.com 146 (Mumbai - Trib.) , the ITAT held that where assessee was running diagnostic laboratories and it paid routine maintenance charges to professionals for maintaining medical equipment and deducted tax at source under section 194C, it had not committed any default by deducting tax at source under section 194C of the Act. 8.5 In view of the facts of the instant case of the assessee and the judicial the precedents on subject, we are of the considered view that payments are covered under section 194C of the Act, and not under section 194J of the Act. 9. In the result, the appeal of the assessee is allowed for assessment year 2014-15. Assessment year 2015-16 10. The assessee has taken the following grounds of appeal: 1. On the facts and circumstances of the case and in law, the learned CIT-(A) has erred in law and on facts in confirming the order passed by the Learned AO U/s. 201(1) r.w.s. 201(1A) of the Act and in directing that tax is required to be deducted U/s. 194J of the Act and not U/s. 194C of the Act. 2. On ..... X X X X Extracts X X X X X X X X Extracts X X X X
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