2013 (12) TMI 1655 - AT - Income Tax

Tribunal Affirms Carriage Fees as Contractual, Not Technical Services; 10% TDS Deduction Not Required, Delay Excused.

The Appellate Tribunal dismissed the Revenue's appeals, condoning the 149-day delay in filing. It upheld the CIT(A)'s decision, affirming that payments to ... TDS u/s 194C or u/s 194J - During the course of survey, it was found that assessee was engaged in the business of media channel under the name of “Sristi Television” and paid carriage fees to various parties. The assessee deducted TDS @ 2% under Section 194C on payment made to those parties. Assessing Officer was of the opinion that TDS on payment of carriage fees was to be deducted @ 10% under the provisions of section 194J of the Income Tax Act, 1961. HELD 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 admitted fact was that the assessee produced various types of programmes/serials and news. These were telecast/broadcasted through Multi System Operators for which payments were made to them for which nomenclature used was ‘carriage charges ’. For this payment tax was deductible u/s 194C explanation iv(b) which is clear from the section itself as cited by the assessee and quoted earlier. Decision in favor of assessee. Issues involved: Delay in filing appeal, nature of service rendered by payee, TDS deduction on payment of carriage fees.Delay in filing appeal: The Revenue filed appeals against the order of the Commissioner of Income Tax (Appeals) for the assessment years 2009-10 & 2010-11, with a delay of 149 days. A condonation petition was filed explaining the delay due to confusion regarding filing separate appeals. The Appellate Tribunal, after hearing both parties, condoned the delay.Nature of service rendered by payee: The dispute revolved around the nature of service provided by the payee, a Multi System Operator (MSO), in terms of uplinking facility via satellite. The Assessing Officer contended that TDS on payment of carriage fees should be deducted at 10% under section 194J, considering it as payment for 'Technical Service'. However, the assessee argued that the payment was contractual and should be treated under section 194C, not as 'Technical Service'. The ld. CIT(Appeals) agreed with the assessee, stating that no technical services were involved in the payment of carriage charges for broadcasting programs produced by the assessee.TDS deduction on payment of carriage fees: The Assessing Officer insisted on TDS deduction at 10% under section 194J for carriage fees paid by the assessee to various parties. The ld. CIT(Appeals) disagreed, citing that the payments were for carriage charges and not technical services, hence falling under section 194C. The Tribunal upheld the ld. CIT(Appeals) decision, emphasizing that the deductee only telecasted programs produced by the assessee, not providing technical services.In conclusion, the Appellate Tribunal dismissed the appeals filed by the Revenue, upholding the decision of the ld. CIT(Appeals) regarding the nature of services and TDS deduction on payment of carriage fees.