ITO (TDS) 2(3), MUMBAI vs. THE MUMBAI DISTRICT CENTRAL CO OPERATIVE BANK LTD, MUMBAI

50 Crores respectively for the above referred two AY.s.to those companies,that it had deducted TDS @2%.The ITO TDS issued notices u/s.133(6)of the Act to the parties to whom the assessee had made payments.After considering their reply he held that the nature of services rendered by the three companies was highly technical in nature and same fell within the meaning of technical services defined in explanation 2 to section 9(1)(vii)of the Act,that the assessee had to deduct tax as per the provisions of section 194J of the Act and not u/s.194 C of the Act.He referred to the order of Ultra Entertainment Solutions Ltd.(17SOT249)and passed an order on 31.03.2011 u/s. 201(1)/201(1A) of the Act for both the AY.s.He held that the assessee had committed a default of short deducting of tax.He worked out the default of Rs.7.80 lacs u/s. 201(1) of the Act and calculated interest u/s. 201(1A) of the Act at Rs.2,80,992/-for the period 1.4.2008 to March, 2011 for the AY 08-09.For the AY 09-10 the default u/s.201 was calculated at Rs.11.69 lacs and interest was calculated at Rs.2,80,646/-for the period 1.4.2009 to March, 2011. 3.Aggrieved by the order of the ITO-(TDS),the assessee filed an appeal before the First Appellate Authority (FAA).Before him it was argued that payments made by it were in the nature of routine maintenance contract payment attracting TDS @2%.It relied upon the cases of Parsurampuria Synthetics Ltd.(20SOT248),Gujarat State Electricity(82TTJ456).After consider -ing the submissions of the assessee and the order of the ITO-TDS,the(FAA) held that the job done by them of routine maintenance fell within the definition of work, that it could not be ITA/2482-83/Mum/2014-AY.08-09&09-10,BDCCBank considered technical services,that job done by the service providers was covered by the provisions of section 194C of the Act not by section 194J,that the assessee could not be treated ‘an assessee in default’ for short deduction.Finally,he set aside the orders of the ITO TDS for both the assessment years. 4.Before us,Departmental Representative(DR)supported the order of the AO.Authorised Representative(AR) relied upon the case of Parsurampuria Synthetics Ltd.(supra),Gujarat State Electricity(supra),Kandala Port Trust(50SOT109) and argued that the scope of work were routine maintenance service for the equipments and machinery used by the assessee,that such payments were subject to TDS u/s.194C of the Act,that the assessee can choose the provision that was less burdensome,that if the assessee opted for section 194C in place of 194J of the Act it could not be treated an assessee in default,that the recipient of income had paid taxes,that the assessee could not be regarded as defaulter,that in subsequent years the AO himself had not treated it as assessee in default for the similar payments. 5.We have heard the rival submissions and perused the material before us.We find that the issue before us is very simple i.e.whether the payments made by the assessee to three or four entities for maintenance charges are covered by the provisions of section 194C or 194J of the Act.We find that the FAA has given a categorical finding of facts that the agreements entered in to by the assessee clearly prove that the payments were in the nature or work.Secondly,the assessee had produce the evidences before the FAA indicating that the vendors had included the subject income in their total income and had paid taxes thereon.We find that in the case of Coca Cola Beverages Pvt. Ltd.(293ITR226)the Hon’ble Apex Court has held as under: