DCIT (TDS) 3(2), MUMBAI vs. RELIANCE LIFE INSURANCE CO. LTD, MUMBAI

अपीलाथ� क� ओर से /By Appellant : Mrs. Neelima Nadkarni, D.R. ��यथ� क� ओर से/By Respondent : Mr. Jitendra Sanghavi, A.R. सुनवाई क� तार�ख/Date of Hearing : 20.06.2016 घोषणा क� तार�ख/Date of Pronouncement : 22.06.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M:

This appeal has been filed by Revenue against the order of Commissioner of Income-Tax (Appeals)-14, Mumbai, dated 01.08.2014 for A.Y. 2012-13 on following ground:

A.Y. 12-13 [DCIT vs. Reliance Life Insurance Co. Ltd.] Page 2

“i) The Ld. CIT(A) has erred on facts and in law, the Ld. CIT(A) has erred in deleting the short deduction in respect of payments made towards “Outsourcing expenses” without appreciating the fact that the nature of services received by the assessee requires certain parameters of technical/managerial skill of highly qualified specialized competency and falls within the purview of section 194J and not u/s 194C of the I.T. Act.”

2.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having considered the same, CIT(A) granted relief to assessee, wherein CIT(A) observed that similar issue arose in A.Y. 2008-09, 2009-10 and 2010-11. Following the same reasoning, CIT(A) granted relief to the assessee on both accounts i.e. on the point of order u/s.201(1) and 201(1A) of the Act.

2.2 Ld. Authorized Representative pointed out that similar issue arose in assessee’s own case for A.Y. 2008-09, 2009-10 and 2010-11 in 3010 & 3011/M/2013, wherein similar issue has been decided in favour of assessee by observing as under: A.Y. 12-13 [DCIT vs. Reliance Life Insurance Co. Ltd.] Page 3

“9. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. From the orders of authorities below, rival submissions and records before us, we find that the assessee engaged in the life insurance business needs various types of services such as storage of data, scanning and sorting of documents, processing charges, call centre operations and business services besides other basic works connected and incidental therewith which were outsourced by the assessee to outside agencies on contractual basis. The various services outsourced were cash & bank reconciliation, commission query handling, cash cheque collection charges, commission processing and document despatch, data processing, policy despatch, document scanning , printing ,emails of documents, infra support and outsourcing staffing, policy serving process, call inbound and outbound , tele-calling for answering customer queries about product , follow and maintaining dealers network etc. As is clear from the said outsourced services, these are a sort of clerical and basic administrative work. The assessee made the payment for these services after deducting TDS under the provisions of section 194C of the Act believing these are basic type of services involving no technical or professional qualification whereas the AO came to the conclusion that these are technical services and were required to be subjected to TDS under the provisions of section194J of the Act and finally treated the assessee in default under the provisions of section 201(1) of the Act and raised the demand accordingly. The ld CIT(A) after having examined and perused agreements with the service providers and after going into the various services provided reached a conclusion that the outsourced services do not require any kind of technical and professional expertise and are just simple and repetitive nature of work such as document storage, documents delivery and collection services and documents management services. The ld CIT(A) examined the contract with Writer Information Management Services and found that very basic services were contracted and rendered by the said party involving no special technical skill or professional qualification. On the basis of the rival arguments and perusal of the various records as placed before us we find that the work assigned to the A.Y. 12-13 [DCIT vs. Reliance Life Insurance Co. Ltd.] Page 4 service provider was not a technical or professional work which required special skills but simple, basic and repetitive nature of work and we are inclined to opine that the order of CIT(A) is correct and deserved to be upheld. In view of the above facts, we dismiss the ground no 1 raised by the revenue by upholding the order of FAA on this point.”

2.3 Nothing contrary was brought to my notice. Facts being similar, so following same reasoning, I am not inclined the interfere with the finding of CIT(A) who has decided the issue in favour of assessee. This issue is fortified by the decision of ITAT in earlier year as discussed above. So, I uphold the same.

Pronounced in the open Court on this the 22nd day of June, 2016.