TaxTMI 
TaxTMI 
2021 (11) TMI 1104
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....ner of Income-tax (Appeals) has erred on facts and in law in holding that the assessee is liable to deduct tax at source on payments made to Pearson Education Service Pvt. Ltd. and Computer Software Pvt. Ltd. for supply and installation of computers, commissioning of computer laboratories and technical manpower and to Vimal Electronics for supply and installation of solar photo voltaic panels under section 194J as against 194C under which tax is deducted at source by the assessee and thereby confirming the demand this under section 201(1) at Rs. 3,86,797 for short deduction of tax and under section 201(1A) at Rs. 94,381 for interest. 1.1 The learned Commissioner of Income-tax (Appeals) has further erred in confirming the demand under section 201(1) without considering that the recipient of income has included the amount so paid in its income and paid tax thereon. 2. The assessee craves to amend, alter and modify any of the grounds of appeal. 3. The appropriate cost be awarded to the assessee." 4. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 pandemic. 5. The brief facts of the case a....
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....ned Commissioner of Income-tax (Appeals). Before the learned Commissioner of Income-tax (Appeals), the assessee explained that the learned Commissioner of Income-tax (Appeals) in, vide its order in appeal No. 360, 360A/JPR/2014-15 dated February 24, 2016, on similar facts in the case of Rajasthan Council of Elementary Education, Jaipur has held that the TDS at two per cent. is required to be deducted as per section 194C. However, the learned Commissioner of Income-tax (Appeals) held that the scope of contract is not only the supply of hardwares, softwares and connected accessories. The project is to be maintained on build, own, operate and transfer basis. There is in-built mechanism of providing technical personnel and expertise needed for the successful launch of the project for the next five years. Therefore, a provision of section 194J is applicable and thus, he upheld the order of the Assessing Officer. 7. Aggrieved by the order of the learned Commissioner of Income-tax (Appeals), the assessee has preferred the present appeal before the Income-tax Appellate Tribunal on the grounds mentioned above. 8. We, found perusal of the record that in the first round of litigation, t....
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....single bundled contract and the details of order are as under : (a) Supply of computer hardware, software and connected accessories (must be brand new) on BOOT (build, own, operate and transfer) basis for a contract period of five years. (b) To provide and maintain in working condition, the hardware, software and necessary infrastructure such as UPS, furniture, etc., on build, own, operate and transfer basis. (c) To supply adequate stationary and consumables at each center. (d) To provide the following personnel to manage the project- -One project manager for co-ordination and implementation of the project and to provide monthly feedback and reporting to the Commissioner, Rajasthan Council of Elementary Education. -One full time computer assistant (school co-ordinator) to manage schools. -The computer assistant will provide continuous training on site job support/monitoring to the teachers. (iii) Contract for supply and installation of solar photo voltaic panels and related services. The above order was given to M/s. Vimal Electronics and the details of order are as under : ....
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....ticated. The learned Commissioner of Income-tax (Appeals) however held that the scope of the work given to the sub-contractor did not fall in the scope of technical services merely because technical persons were employed in execution of contract and therefore, tax is deductible only under section 194C. This finding was confirmed by the co-ordinate Bench of the Income-tax Appellate Tribunal. On further appeal, the hon'ble High Court by a elaborate order held as under : "Held, dismissing the appeal, that the contract entered into between the assessee and each of the contractors did not involve supply of professional or technical services at least within the mean ing of section 194J of the Income-tax Act, 1961. Therefore, the considerations paid under the contracts were not for professional or technical services rendered by the contractors to the assessee and section 194J was not applicable. The technical personnel were deployed not for and on behalf of the customer but for and on behalf of the contractor itself with a view to ensuring that the contractor supplied the equipment in accordance with the contractual specifications. The nature of human intervention was reflect....