TaxTMI 
TaxTMI 
2017 (11) TMI 191
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....y Educational Management P. Ltd., (hereafter referred to as 'Varsity') for rendering various services as may be required in relation to administrative, management and operation of educational institutions. For various services rendered by K12 and Varsity, assessee was making payments as per the agreements and has deducted tax on the payments made u/s. 194C of the Income Tax Act [Act] considering the agreements as 'works contract'. A survey action u/s. 133A was conducted on 12-03-2015 in the premises of assessee-trust at Hyderabad. After analyzing the various agreements, AO was of the opinion that the services provided to assessee are in the nature of technical services and accordingly, tax was required to be deducted at 10% u/s. 194-J. AO was of the opinion that there was a short deduction made by assessee and raised demands mainly u/s. 201(1A) towards interest for the deferred payments. The demand was also raised on certain payments to Varsity in AY. 2013-14 u/s. 201 and in AY. 2015-16 on entire payments on the reason that the assessee is failed to furnish necessary details of remittance of tax by the deductees in those years. 3. Ld.CIT(A) on appeals by assessee in his detailed o....
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....ubmitted that Form No.26A could not be filed since due date for filing returns of the income by the corporate was for off by the date assessment was completed. In the report submitted by the Assessing Officer it was mentioned that since form No.26A was not submitted, the demand U/s.201(1) was raised. During the course of appellate proceedings, confirmation as required in Form No. 26A duly certified by a Chartered Accountant confirming the fact that the payments made by the appellant were shown as income 'in the hands of K-12 and Varsity were filed. Therefore, as the deductee accepted the payments made by the appellant as its income, the appellant cannot be deemed to be 'assessee in default' for the purpose of Section 201(1). This argument has merit. But since specific findings on merit that the assessee is not required to deduct tax under section 194J and therefore, cannot be treated as assessee In default for the purpose of Section 201(1), Ground No.5 becomes academic for the purpose of this order. Hence, the Ground No.5 is dismissed". 4. Revenue is aggrieved in all the years and raised the grounds accordingly. For the sake of record, the grounds raised in AY. 2015-1....
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.... ITA No. 433/Hyd/2015 (AY. 2012-13) dt. 03-02-2017, particularly in para 7 of that order, wherein that assessee on similar services being provided by the deductee- K12 has deducted taxes at different rates. He referred that order to submit that the agreements are not composite agreements and payments are made for individual services on a different categorization. Therefore, the order of CIT(A) that the agreements are of 'works contracts' cannot be upheld. He has no objection if the issues are restored to the file of AO for fresh consideration. 6. Ld.AR in reply, however, submitted that assessee was deducted tax treating it as 'works contract' and there is no failure on the part of assessee. Regarding raising of the demand in AY. 2013-14 and 2015-16, it was submitted that assessee could not furnish the necessary tax payment details of the deductees in time so that the demand has been raised, but proviso to Section 201(1) is applicable as the deductees remitted taxes. It was for this reason that Ld.CIT(A) deleted the demands u/s. 201(1). It was further submitted that Ld.CIT(A) also considered the alternate submissions in para 12 of the order. Therefore, the grounds pertaining to Sec....
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....4J 1,22,49,404.00 10% 12,24,940.00 Accounts & Records 194J 37,43,521.00 10% 3,74,352.10 Content Dev. & curriculum Improvement services 194J 1,22,58,852.00 10% 12,25,885.20 Brand Royalty fee 194J 51,88,500.00 10% 5,18,850.00 More or less, similar services are being provided by K12 and Varsity to the assessee. We were informed that consequent to the survey operations, the assessee has changed its opinion and taxes are being deducted u/s. 194C and 194J, as directed by the AO. However, we are not informed which of the services rendered were considered for Section 194J. As far as the impugned years are concerned, by virtue of amendment to Section 201(1), wherein the proviso was inserted, Ld.CIT(A) has given relief as no demand u/s. 201(1) can be raised as the deductees have offered incomes and paid taxes after claiming TDS. Following the principles laid down by the Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage (P.) Ltd. Vs. CIT [163 Taxman 355 (SC)/ [2007] 293 ITR 226 (SC)], demand u/s. 201(1) cannot be raised and certainly the proviso to Section 201(1) as amended is applicable. In view of that whether the tax is to be deducted u/s. ....
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....om the perusal of the above, it is clear that the services rendered by M/s K12 Techno Services Pvt. Ltd. are distinguishable from each other and though the recipient of all the payments is a single party, the nature of the services are discernible and different. If the contention of the Revenue was to be accepted, then why should the TDS be deducted u/s 194J and not u/s 194C for all the payments treating the entire agreement as a work contract?. When the basket of services is filled with different and distinguishable services, we are of the opinion that the assessee was correct in adopting different rates of TDS for different types of payments. 9. The decisions relied upon by the Ld. AO and the CIT(A) are distinguishable from the facts of the case before us. In the case of EMC Vs Income Tax Officer (Cited Supra), the issue was whether the assessee therein was a contractor u/s 194C(1) or a subcontractor u/s 194C(2) of the Act. And therefore it is not relevant to the present case. 10. In the case of Oberoi hotels India Pvt Ltd, the Hon'ble Supreme Court was dealing with the case of an assessee who was running hotels and the issue therein was the nature of services rendered ....