2016 (10) TMI 1124 - HC - Income Tax

TDS u/s 194C OR 194J - tds liability on transmission and wheeling charges paid by the petitioner to the other state owned company named RRVPNL and other non-government Companies - Held that - No liability to deduction tds required. See Commissioner of Income Tax Vs. Bharti Cellular Ltd. (2010 (8) TMI 332 - Supreme Court of India ) Commissioner of Income Tax Vs Bharti Cellular Ltd (2008 (10) TMI 321 - DELHI HIGH COURT ) wherein decided providing assistance or aid services not involving human interface hence services are not technical services as contemplated under Explanation 2 to section 9(1)(vii) - interconnect charges/port access charges cannot be regarded as fees for technical services hence not liable for tax deduction at source - Decided against revenue

Summary

Issues:
Challenge to judgment on transmission and wheeling charges as "fees for technical services" under Section 194J of Income Tax Act, 1961.

Analysis:
The petitioner challenged a judgment holding transmission and wheeling charges as "fees for technical services" under Section 194J of the Income Tax Act, 1961. The petitioner contended that TDS was not required as per certain decisions. The counsel relied on Section 194C and 194J to support the argument. The court noted that the issue was settled by decisions of Bombay and Delhi High Courts, which were upheld as the SLP was dismissed. Consequently, the court ruled in favor of the petitioner, quashing the impugned order.

Conclusion:
The High Court of Rajasthan examined the issue of whether transmission and wheeling charges constitute "fees for technical services" under Section 194J of the Income Tax Act, 1961. The court considered relevant provisions and past decisions, ultimately siding with the petitioner based on precedents from Bombay and Delhi High Courts. The judgment favored the petitioner, setting aside the order of respondent No.1.