DISTRICT ELECATION OFFICE, MANDI,MANDI vs. INCOME TAX OFFICER, MANDI

In the present appeal Appellant has raised following grounds: 1. That in the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals), is not justified in partly upholding the order of the Ld. Assessing Officer. 2. That in the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals), is not justified holding the assessee/ appellant in default under section 201(1) for non deducting of tax at source @ 10% within the meaning of section 194J of the Income Tax Act, 1961 that too without appreciating the nature of the payment. 3. That in the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals), is not justified holding the assessee/ appellant in default under section 201(1) for non deduct of tax source on payment made to other individual /Huf Contractors under section 194C of the Income Tax Act, 1961. 4. That in the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals), is not justified in confirming the impugned tax demand of Rs.2,60,304/-. The same has been wrongly confirmed by the Ld. CIT(A). 5. That in the facts and circumstance of the case the Ld. CIT(A)is not justified in upholding charging of Interest under section 201(1A) of the Income Tax Act, 1961.

Regarding Ground No. 2 the Ld. CIT(A) on page 17 of the appellate order has observed as under: Appellant's contention is that Videography services constitute "fees for technical services" attracting TDS @2% under section 194J(1)(b), not "professional services" @10% as held by AO. Detailed table provided listing 15 videographers (Durga Dutt, Sohan Singh, Subhash Chand etc.) with alleged excess demand of Rs.4,07,050 (tax) + Rs.1,11,923 (interest). The nature of videography services during elections is critical. These were not casual photography but professional election coverage involving multiple HD cameras, live recording of polling processes, editing, time-stamped footage for monitoring polling stations - requiring specialized skills, equipment and experience. The Explanation to section 194J defines "fees for technical services" narrowly for 2% rate (call centres, specified cinematographic film exhibition etc.). General technical services fall under 10% bracket along with professional services. Departmental practice, CBDT instructions and consistent judicial view treat election videography/photography as professional/technical services @10% under section 194J. The appellant's contemporaneous treatment @2% was incorrect. Even the AO's order notes on page no. 18 that these payments "involve input from technical personnel", correctly classifying them under section 194J@10%. No material was produced before AO distinguishing these from professional coverage services. AO's classification and rate application fully justified. No relief is allowed on this ground.

The other grounds are either consequential or are of general in nature.

As emanated from above the present appeal arises from the order passed by the Ld CIT(A) in respect of Assessing Officer's order under section 201(1)/201(1A) of the Income-tax Act, 1961, whereby the Ld CIT(A) held that

However, the terms and conditions of the contract and scope of services rendered have not been discussed. These days the such work may encompass a wide spectrum of creative, technical, and coordination activities. Sometimes these services are delivered as a bundled, end-to-end solution The nature of engagement, therefore, needed to be examined from the wording of contract and exact nature of services rendered.

It is noted from the perusal of the assessment order and the order of the Ld. CIT(A)that the exact nature of services rendered for photography, videography including scope of work from the work order has not been mentioned in the assessment order or the order of the Ld. CIT(A).

The appellant has also not attached the same and only a general statement has been made that the videography and photography was done in respect of conduct of election. Therefore, in the interest of justice, it is considered appropriate that these aspects are examined before the decision can be taken whether the scope of work order falls under section 194C or 194J.

In the result appeal is allowed for statistical purposes.