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Income Tax Appellate Tribunal, “B” BENCH : KOLKATA
Before: Hon’ble Sri N.V.Vasudevan, JM & Dr.Arjun Lal Saini, AM]
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : KOLKATA [Before Hon’ble Sri N.V.Vasudevan, JM & Dr.Arjun Lal Saini, AM] Assessment Year : 2012-13 I.T.O., Ward-3(2),TDS -vs.- M/s. Sristi Television Pvt.Ltd. Kolkata Kolkata. [PAN : AAPCS 6429 P] (Respondent) (Appellant) For the Appellant : Shri Bani Brata Dutta, Addl. CIT.Sr.DR For the Respondent : Shri Sunil Surana, FCA Date of Hearing : 12.04.2017. Date of Pronouncement : 03.05.2017. ORDER Per N.V.Vasudevan, JM
This is an appeal by the Revenue against the order dated 11.08.2014 of C.I.T.(A)-I, Kolkata relating to A.Y.2012-13 (F.Y.2011-12).
Grounds of appeal
raised by the revenue read as follows :- “1. Considering the facts and circumstances of the case, the Ld. CIT(A) has erred in considering that the payments made for carriage fees was not covered u/s.194J of the Income Tax Act, 1961 .
2. The Appellant craves leave to add, alter or amend any of the ground of appeal during the course of hearing.”
3. The Assessee is a company and is engaged in the business of production of programmes, serials and news which are telecasted or broadcasted through multi system operators. In the course of its business of production of serials and advertisements, the assessee paid carriage fees to various parties. The assessee deducted tax at source on payment of carriage fees at 2% by treating the payment as a payment to a contractor falling within the ambit of section 194C of the Income Tax Act, 1961 (Act). According to the ITO(TDS) Ward-59(2), Kolkata (AO) the payment in question was a payment for 2 ITA.No.2128/Kol/2014 M/s. Sristi Television Pvt. Ltd. A.Yr.2012-13 professional or technical services or royalty or payment falling within the ambit of section 28(va) of the Act as payment for professional services. Therefore TDS had to be deducted in terms of section 194J of the Act at 10%. In respect of the short deduction of tax at source the AO passed an order u/s 201(1) and also imposed interest u/s 201(1A) of the Act as per the following details :- Month Amt. of TDS TDS Amount of interest payment deductible deducted short made @10% deduction towards “carriage fees” April,11 May,11 2226146 222615 44525 178090 33837 June,11 1220064 122006 24402 97604 17569 July,11 1054614 105461 21093 84368 14343 August,11 1523389 152339 30468 121871 19499 September,11 1164914 116491 23299 93192 13974 October,11 1192489 119249 23851 95398 13356 November,11 1247639 124764 24954 99810 12975 December,11 960859 96086 19218 76868 9224 January,12 1578539 157854 31572 126282 13891 February,12 1688839 168884 47014 121870 12187 March,12 4355333 435533 87108 348425 31358 Total 1443778 192218 Total amount payable during the financial year 2011-12. Short deduction of tax : 1443778 Add: Interest u/s 201(1A) : 192218 Total : 1635996
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The assessee had filed TDS return in form No.26Q for the financial year 2011-12 and it was found on scrutiny of the same that there was in default in part of the assesse for late payment interest u/s 201(1) which was calculated by the AO as under : Financial Return Amount year 2011-12 26Q/1 Rs.782 -do- 26Q/2 Rs.709 -do- 26Q/3 - -do- 26Q/4 - -do- Total Rs.1419 Therefore the Tax deduction liability of the assessee for all four quarters of financial year 2011-12 for 26Q as per above Calculation was determined as under :- Amount for the F.Y.2011-12 Rs.1635996 Interest for late deposit of tax Rs. 1419 Rs.1637487”
Even in the order of AO, there is a reference to the fact that identical payments of carriage fees was the subject matter of order passed by the AO u/s 201(1) and 201(1A) of the Act for the financial year 2009-10 and 2010-11 (A.Y.2010-11 and 2011-12) wherein the AO had taken the view that provision of section 194J of the Act are applicable for TDS on payment of carriage fees and that on appeal by the assessee the CIT(A) by order dated 14.06.2012 had held that the provision of section 194C of the Act was applicable and cancelled the order u/s 201(1) and 201(1A) of the Act and that the revenue was in further appeal before the Tribunal against the aforesaid order of CIT(A).
The assessee filed an appeal against the order AO for financial year 2011-12 (A.Y.2012-13) and pointed out that in financial year 2009-10 and 2010-11 (A.Y.2010- 11 and 2011-12) on an identical issue the Hon’ble ITAT in and 276/Kol/2013 for A.Y.2010-11 and 2011-12 respectively by its order dated 24.12.2013
4 ITA.No.2128/Kol/2014 M/s. Sristi Television Pvt. Ltd. A.Yr.2012-13 had held that provision of section 194C of the Act alone are attracted for payment of carriage fees. The CIT(A) following the order of the Tribunal cancelled the order passed by the AO u/s 201(1) and 201(1A) of the Act.
Aggrieved by the order of CIT(A) the revenue has preferred the present appeal before the Tribunal.
We have heard the rival submissions. It was not disputed before us that identical issue has already been decided by the Tribunal in the case cited by the assessee before CIT(A). The ITAT on an identical issue had held as follows :- “8. We have heard both the parties and perused the material available on record. We can gainfully refer to the provisions of sections 194C and 194J, which are reproduced as under :-
"194C - Payments to contractors: 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". "194J - fees for professional or technical services: (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying resident any sum by way of - (a) Fees for professional services, or (b) Fees for technical services, (c) Royalty, or (d) Any sum referred to in clause (va) of section 28 shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in or by issue of a cheque or draft or by any other mo de, whichever is earlier, deduct an amount equal to per cent, of such sum as income tax on income comprised therein.
We find that the assessee produced various types of programmes/ serials and news and these were telecasted/broadcasted through Multi System Operators for which payments were made to them under the head 'carriage charges'. The assessee has duly deducted and paid tax under section 194C of the Act. We agree with the Id. 4
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CITCA ppeals) that no technical services were involved in payment of carriage charges made by the assessee for broadcasting of the programmes produced by the assessee. The assessee produced various types of programmes/serials and news and these were telecasted/broadcasted through Multi System Operators. Payments in this regard were made as carriage charges for I .T.A. No. : 1297/ Kol / 2012 Assessment year : 2009-10 & 2010- 11 & I TA No. 276/ Kol / 2013 Assessment Year: 2011-12 Page 1 to 5 which payment of tax was deductible under section 194C of the Income Tax Act. As per definition of technical services given in Explanation to Section 9 of the Act, the deductee should have rendered managerial, technical or consultancy services. In this case, we find that there is no such finding of the Assessing Officer. The deductee has only telecasted the programmes produced by the assessee. In the case law referred to by the Id. CIT(A ppeals) decision In the case of DCIT -vs.- NNM Securities Limited, ITAT held that if the assessee is using any facility of anyone the same is not technical services. Hon'ble Punjab & Haryana High Court in the case of Kurukshetra Darpan (P) Ltd. -vs.- CIT [217 CTR 326] has held that telecasting on the programme was covered under section 194C of the Act.
In the background of above discussion and following the precedent as above, we do not find any reason to interfere with the order of Id. CIT(Appeals). Accordingly we uphold the same.”
9. In the aforesaid order the nature of carriage charges has been discussed in para-6 and it has been observed therein that the carriage charges are nothing but payment made to multi system operators for telecasting/broadcasting programmes produced by the assesee. It is not in dispute that the nature of payments in the present assessment year is identical to the payments made by the assessee in the A.Y.2010-11 and 2011-12 which has already been decided by the tribunal. In view of the above we are of the view that the nature of payment in question is one which falls within the ambit of section 194C of the Act and therefore the assessee has rightly deducted tax at source @2%. Since the payment in question does not fall within the ambit of section 194J of the Act the orders passed u/ 201(1) and 201(1A) of the Act were rightly cancelled by CIT(A). We find no infirmity in the order of CIT(A). Consequently the appeal by the revenue is dismissed.
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In the result the appeal of the revenue is dismissed.
Order pronounced in the Court on 03.05.2017.