Advertising payments through automated online platforms fall under section 194C, not technical services, absent human intervention.

Payments for automated Google AdWords advertising were treated as advertising charges under section 194C, not fees for technical services under section 194J, because the arrangement involved use of an online platform for placing advertisements and there was no proved managerial, technical or consultancy service, or human intervention, rendered to the payer. The specific provision for advertising prevailed over the general technical-services provision. On that basis, tax was correctly deducted at the lower rate applicable under section 194C, and the treatment of the assessee as in default for short deduction, together with interest, was not sustainable.

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Issues: Whether payments made for Google AdWords advertising were chargeable to tax deduction at source under section 194C of the Income-tax Act, 1961 as advertising charges, or under section 194J of the Income-tax Act, 1961 as fees for technical services, and whether the assessee could be treated as an assessee in default under section 201(1) and section 201(1A).

Analysis: The payment was held to be for use of an automated online advertising platform for placement of advertisements, with no material evidence of managerial, technical or consultancy services rendered to the assessee and no proved human intervention in the service availed. Advertising is a specific subject covered by section 194C, and a specific provision prevails over a general one. The later reduction of the TDS rate under section 194J was also treated as reinforcing the legislative intent to reduce litigation in cases where the dispute is whether the payment falls under section 194C or section 194J.

Conclusion: The payment fell under section 194C and not section 194J. The assessee had correctly deducted tax at source at 2%, and the order treating the assessee as in default for short deduction of tax and charging interest was not sustainable.

Ratio Decidendi: Payments for automated digital advertising space, without proved human intervention or transfer of technical knowledge to the payer, are classifiable as advertising contracts under section 194C rather than fees for technical services under section 194J.

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