TaxTMI 
TaxTMI 
2016 (2) TMI 877
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....appellant. iii) That learned Assessing Officer and Commissioner of Income Tax (Appeals)-III, Jaipur has not considered the findings and detailed Order given by Learned CIT (Appeal, Alwar) in Appeal No. 1083/JPR/11-12, 1081/JPR/11-12 and 1082/JPR/11-12 relating to Assessment year 2009- 10, 2010-11 and 2011-12 respectively, passed on considering the transactions between appellant and ITGK as not covered by the provisions of Section 194(J) of Income-tax Act, 1961 and favorably deciding all the issues. 2. That the learned Assessing officer and Commissioner of Income Tax (Appeals)-III, Jaipur has erred in law as well in the facts of the case that payments by appellant are in the nature of payment for technical services and appellant is under obligation to deduct TDS under section 194J of the Income tax Act, 1961, whereas it has been submitted that it is only arrangement for sharing of fees/Revenue received from the learners and therefore, the findings of learned assessing officer need to be quashed and liability to be deleted. 3(i) That the learned assessing officer and Commissioner of Income Tax (Appeals)-III, Jaipur has further erred in law as well as in fac....
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.... all or any part of the grounds of appeal before or at the time of hearing of the appeal." 2. All the grounds are revolving around the payments made by the appellant to ITGK for its share in RS-CIT course fees and liable to deduct TDS U/s 194J of the Income Tax Act, 1961 (in short the Act). The ITO (TDS)-2, Jaipur has observed that the assessee had made following payments under various heads as under:- Head Particulars F.Y. 2011-12 Share in RS-CIT Course Fees ITGK's share in RS-CIT Course fees 15,30,61,420/- Vardhaman Mahaveer Open University share in RS-CIT Exam 1,12,14,000/- Share in course fees Center's Share in course fee 1,60,17,471/- As per his observation, he has not deducted TDS on total payment of Rs. 18,02,92,891/- U/s 194J of the Act @ 10%. He gave reasonable opportunity of being heard, which was considered by him. The reply of the assessee has been reproduced on page 2 to 6 of the assessment order. The Assessing Officer has held that the assessee has run IT literacy courses for IT education and the IT enabled education with the basic teaching, learning process and its management namely RS-CIT. The assessee was c....
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....has assigned various specific works to different agencies as mentioned above and for such assigned works, necessary agreements have also be assigned. For such assigned work M/s RKCL has made payment to these agencies. It is also fact that while making payment to PSA's, DLC's and MKCL's TDS has been deducted. However, in respect of payment made to ITGK's and VMOU's no TDS has been deducted. As regards VMOU as per A.O. the income of VMOU being a university was exempt u/s 10(23)(C)(ii)(ab) and therefore TDS was not to be deducted. The A.O.'s case is that all these agencies were entrusted with the work of imparting of computer training etc. and for such work all these agencies were paid for their services and therefore TDS was to be deducted. The A.O. also noted that as per definition of technical services in Explanation 2 to sec. 9 l(vii), any services in consideration of any managerial, technical or consultancy services was covered in the definition of technical services and that the services rendered by ITGK's were covered under this definition. Accordingly as per A.O. the payment made/indirectly received from M/s RKCL by the ITGK's was liable for TDS and accordingly the A.O. determ....
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....se agencies were of principal to agent basis and therefore on payments made to these agencies, TDS was to be deducted. It is also fact that on the similar work assigned to PSA's, DLC's and MKCL, the appellant has deducted TDS on the payments. As regards the contention of the appellant that no payment was made by M/s RKCL to M/s ITGK, it may be noted that such contention cannot said to be correct in as much as it was only for the procedural purpose and administrative convenience that the aggregate amount from the learners was first collected by M/s ITGK and then the whole amount was remitted to M/s RKCL. Subsequently M/s RKCL kept Rs. 850/- and remaining amount of Rs. 1450/- per learner was remitted/paid to the ITGK's. The payment of Rs. 1450/- per learner to the ITGK's was for rendering of technical services as per provisions of sec. 194J of IT Act and on aggregate of such payment TDS was to be deducted. The appellant has mainly relied on the decision of CIT Vs. NUT Ltd. [2009], 318 ITR 89. The another decision in the case of CIT Vs. Carrier Launcher India Ltd. was decided relying on the decision in the case of CIT Vs. NIIT Ltd. Even the worthy CIT(A), Alwar has decided the issue r....
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....ued that the appellant has not liable to deduct any tax at source on the payment made to ITGK/VMOU. This payment is not covered U/s 194J of the Act but it an arrangement of sharing of the course fees collected from learners. These payments are also not covered fees for technical services as enumerated in Section 194J. He further explained the main object of the company, course conducted with the help of various agencies and collaborations. The main agencies are Information Technology Gyan Kendra (ITGK), Program Supporting Agency (PSA), Maharastra Knowledge Corporation Ltd. (MKCL) and District Lead Centre (DLC). The PSA has a relevant expertise/experience carrying out certain activities on behalf of the assessee. The assessee shall pay Rs. 100 per confirmed learner. Various technologies and services are provided by MKCL as per agreement. These activities were carried out by DLC. The certification has been given by the Vardhaman, Mahaveer Open University, Kota. The learner is required to deposit entire course fees @ Rs. 2300 for RS-CIT with the concerned ITGK, who received the sum on behalf of the stakeholders and also issued a receipt for the same. The entire receipt from the learne....