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2014 (8) TMI 1186 - AT - Income TaxTDS u/s 194J or 192 - payments made to the teachers on adhoc basis - default u/s 201(1)/201(1A) - HELD THAT:- Relationship between the management and teaching staff involved an obligation to obey orders in the work to be performed, the said relationship could not be called contract for service since the teaching staff had not undertaken to render any professional or technical service. As there was a contract of service between the assessee deductor and its teaching staff appointed on adhoc basis and the salary paid to them being below the taxable limit, does not warrant deduction of tax at source and such non deduction of tax at source does not invalidate the provisions of Act making the assessee liable for the demand raised under section 201(1)/201(1A) We are in agreement with the observation of the CIT (Appeals) that merely because the assessee had not maintained separate books of account for financially added courses and self financing courses was not relevant, as there was no requirement under the Act and by not maintaining separate books of account, the nature of payment would not get changed. In view of the teaching staff being appointed on adhoc basis, for a short period, there was no entitlement for any other benefits like PF, Gratuit y, HRA, increment, etc. Upholding the order of the CIT (Appeals), we hold that the Assessing Officer was not correct in treating the payments made to the teachers on adhoc basis as professional payments in line with the provisions of section 194J of the Act. The assessee is thus not in default and there is no merit in raising of demand under section 201(1) of the Act and charging of interest under section 201(1A) of the Act. The grounds of appeal raised by the Revenue are thus dismissed.
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