TMI Blog2008 (3) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... No.260, 261 and 262 of 2007 as the proposed substantial questions of law involved in all the appeals are similar. For the sake of arguments, the facts are being taken from ITA No.260 of 2007. The present appeal has been filed by the Revenue under Section 260-A of the Income Tax Act, 1961 (for short 'the Act')against the order dated 28.12.2006 passed in Appeal No.801/Chandi/2006 by the Income Tax Appellate Tribunal, Chandigarh for the assessment year 2006-07, raising the following substantial questions of law:- (i) Whether Section 194 C of the Income Tax Act, 1961 is applicable in the facts and circumstances of this case? (ii) Whether the Revenue is justified in treating the appellant/assessee an assesse in default without making an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant or the amount of subscription collected. During the course of inspection regarding proper implementation of TDS Provisions on 2.3.2006, it was noticed by the Income Tax Officer (TDS), Kurukshetra that the assessee has not deducted tax at source under Section 194C of the Act from the payments made to the different channels for airing charges for broadcasting of programme and for use of electric pole to make the programme to reach the viewer's door. The assessee was served with a show cause notice vide letter dated 16.3.2006 as to why he should not be treated as an assessee in default in terms of Section 201 201(1A) read with Section 194C of the Act for making payment of "airing charges to different T.V. Channels for broadc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/- and Rs.1,12,500/- as pole rent to Electricity Department during the Financial Year 2005-06 and the assessee is covered under sub clause(b) of Explanation III to section 194C of the Act. Accordingly, the assessee was held in default under Section 201 read with Section 194C of the Act and created a demand under Section 201 along with penal interest thereon under section 201 (1A) of the Act vide order dated 27.3.2006. Similar orders were passed during the Financial Year 2003-04 and Financial Year 2004-05. Feeling aggrieved against the order dated 27.3.2006 passed by the Income Tax Officer(TDS), Kurukshetra, the assessee filed appeals before the Commissioner of Income Tax, Karnal. The said appeals were allowed vide order dated 4.9.2006 pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act on such payments. Consequently, he partly allowed the appeals of the Revenue. We have heard learned counsel for the parties and perused the record. Shri Sehgal, learned counsel for the appellant has vehemently argued that the provisions of Section 194-C of the Act are not applicable in the present case as the appellant has entered into a contract with the licenser or distributors of the T.V. Channels and not with the TV channels. Moreover, the payment of subscription charges are being done to the licenser and not to the TV channels who are actually broadcasting or telecasting the programmes and therefore, the Assessing Officer has proceeded with the issue on a wrong premises that the appellant is making payments to the differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and passengers by any mode of transport other than by railways; (d) Catering." After hearing learned counsel for the parties, we are of the view that the contentions of the counsel for the appellant are liable to be rejected. Section 194C of the Act creates an obligation on a person responsible for paying any sum specified therein to a person for carrying out any work, to deduct the tax at source. Presently we are concerned with the 'work' as referred to in Clause-b of Explanation III below Section 194C(2) of the Act. In terms of the said Explanation, it is provided that expression 'work' shall include inter alia broadcasting and telecasting including production of programmes for such broadcasting and telecasting. By way of such Expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V channel which is dealt with by the licensor or the company. Therefore, what the assessee has transacted for with the licensor or company certainly includes within its ambit broadcasting and telecasting facility. The essence of the contract is to obtain broadcasting and telecasting of TV channels and thereafter its distribution amongst ultimate customers through the cable network of the assessee. Another plea of the assessee/subscriber was that the licensor or the person to whom the assessee is making payment by itself does not do the work of broadcasting and telecasting and is therefore outside the purview of Section 194C of the Act. This argument deserves to be negated at the threshold. As we have pointed out earlier what the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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