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TMI Blog2016 (2) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (Appeals)-III, Jaipur has not considered the findings and detailed Order given by Learned CIT (Appeal, Alwar) in Appeal No. 1083/JPR/11-12, 1081/JPR/11-12 and 1082/JPR/11-12 relating to Assessment year 2009- 10, 2010-11 and 2011-12 respectively, passed on considering the transactions between appellant and ITGK as not covered by the provisions of Section 194(J) of Income-tax Act, 1961 and favorably deciding all the issues. 2. That the learned Assessing officer and Commissioner of Income Tax (Appeals)-III, Jaipur has erred in law as well in the facts of the case that payments by appellant are in the nature of payment for technical services and appellant is under obligation to deduct TDS under section 194J of the Income tax Act, 1961, whereas it has been submitted that it is only arrangement for sharing of fees/Revenue received from the learners and therefore, the findings of learned assessing officer need to be quashed and liability to be deleted. 3(i) That the learned assessing officer and Commissioner of Income Tax (Appeals)-III, Jaipur has further erred in law as well as in facts in holding that the appellant is liable to deduct tax U/ s 194J of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds are revolving around the payments made by the appellant to ITGK for its share in RS-CIT course fees and liable to deduct TDS U/s 194J of the Income Tax Act, 1961 (in short the Act). The ITO (TDS)-2, Jaipur has observed that the assessee had made following payments under various heads as under:- Head Particulars F.Y. 2011-12 Share in RS-CIT Course Fees ITGK's share in RS-CIT Course fees 15,30,61,420/- Vardhaman Mahaveer Open University share in RS-CIT Exam 1,12,14,000/- Share in course fees Center's Share in course fee 1,60,17,471/- As per his observation, he has not deducted TDS on total payment of Rs. 18,02,92,891/- U/s 194J of the Act @ 10%. He gave reasonable opportunity of being heard, which was considered by him. The reply of the assessee has been reproduced on page 2 to 6 of the assessment order. The Assessing Officer has held that the assessee has run IT literacy courses for IT education and the IT enabled education with the basic teaching, learning process and its management namely RS-CIT. The assessee was carrying out these activities through various supporting agencies/centres like DLC, PSA & ITGKs. He further considered the word 'technica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t while making payment to PSA's, DLC's and MKCL's TDS has been deducted. However, in respect of payment made to ITGK's and VMOU's no TDS has been deducted. As regards VMOU as per A.O. the income of VMOU being a university was exempt u/s 10(23)(C)(ii)(ab) and therefore TDS was not to be deducted. The A.O.'s case is that all these agencies were entrusted with the work of imparting of computer training etc. and for such work all these agencies were paid for their services and therefore TDS was to be deducted. The A.O. also noted that as per definition of technical services in Explanation 2 to sec. 9 l(vii), any services in consideration of any managerial, technical or consultancy services was covered in the definition of technical services and that the services rendered by ITGK's were covered under this definition. Accordingly as per A.O. the payment made/indirectly received from M/s RKCL by the ITGK's was liable for TDS and accordingly the A.O. determined the TDS liability u/s 201(1 )/201(1A) of IT Act. On the other hand the appellant case is that for applicability of application 194J one person should be paying a particular amount to another person for rendering of any services and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents. As regards the contention of the appellant that no payment was made by M/s RKCL to M/s ITGK, it may be noted that such contention cannot said to be correct in as much as it was only for the procedural purpose and administrative convenience that the aggregate amount from the learners was first collected by M/s ITGK and then the whole amount was remitted to M/s RKCL. Subsequently M/s RKCL kept Rs. 850/- and remaining amount of Rs. 1450/- per learner was remitted/paid to the ITGK's. The payment of Rs. 1450/- per learner to the ITGK's was for rendering of technical services as per provisions of sec. 194J of IT Act and on aggregate of such payment TDS was to be deducted. The appellant has mainly relied on the decision of CIT Vs. NUT Ltd. [2009], 318 ITR 89. The another decision in the case of CIT Vs. Carrier Launcher India Ltd. was decided relying on the decision in the case of CIT Vs. NIIT Ltd. Even the worthy CIT(A), Alwar has decided the issue relying on the decision in the case of CIT Vs. NIIT Ltd. (supra). However, as mentioned by the A.O. the facts in the case of CIT Vs. NIIT Ltd. were different with the facts of the appellant case and the basic and vital difference in the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are also not covered fees for technical services as enumerated in Section 194J. He further explained the main object of the company, course conducted with the help of various agencies and collaborations. The main agencies are Information Technology Gyan Kendra (ITGK), Program Supporting Agency (PSA), Maharastra Knowledge Corporation Ltd. (MKCL) and District Lead Centre (DLC). The PSA has a relevant expertise/experience carrying out certain activities on behalf of the assessee. The assessee shall pay Rs. 100 per confirmed learner. Various technologies and services are provided by MKCL as per agreement. These activities were carried out by DLC. The certification has been given by the Vardhaman, Mahaveer Open University, Kota. The learner is required to deposit entire course fees @ Rs. 2300 for RS-CIT with the concerned ITGK, who received the sum on behalf of the stakeholders and also issued a receipt for the same. The entire receipt from the learner by ITGK was deposited in the account of the assessee for the purpose of centralize collection and onward distribution of revenue shared out of the course fees as per collaboration between them. Rs. 2300/- is shared between various agenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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