TMI Blog2016 (8) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... iliation fee on which TDS was not deducted - appellant has claimed that the income of RTU is exempt under section 10(23C)(iiiab) - Held that:- The CBDT Circular No 4/2002 dated 16.7.2002 has been issued in the context of self-declaration by entities/institutions whose income is exempt under section 10 of the Act. In the said circular, the CBDT has clarified that in case of those funds or authorities or Boards or Bodies, by whatever name called, whose income is unconditionally exemption u/s 10 of the IT Act and who are statutorily not required to file return of income as per section 139 of the Income Tax Act, there would be no requirement for tax deduction at source since their income is anyway exempt under the Income Tax Act. The appellant has claimed that the income of RTU is exempt under section c(iiiab) of the Act. Where the income of RTU is exempt, in light of CBDT Circular, there is no requirement to deduct tax at source. In light of above, the AO is directed to verify from the concerned AO of RTU as well as independently from RTU whether the income of RTU is exempt under section 10(23C)(iiiab) of the Act. If the AO finds the same to be in order, the AO is directed not to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) of the I.T Act, 1961. Subsequently, the demand so raised was amended by way of order u/s 154 of Income Tax Act 1961 by accepting the assessee Society s contention that the deductee had paid the due tax on such receipts and, therefore the deductor should not be treated as assessee in default in terms of section 201(1A) of the I.T. Act 1961. The demand raised u/s 201(1A) was however determined at ₹ 23,70,599/-. 2.1 LR AR submitted before the Assessing officer that the lease agreement executed with RIICO for a period of 99 years was to acquire the ownership rights in the industrial land. The payment so made was not for merely use of the land but larger interest comprising bundle of rights was acquired and , therefore, it was not rent and was not liable for TDS U/s 194-I. The ld. AO did not agree with the contentions of the assessee Society. He mainly referred to the different regulatory clauses of the lease deed and held that there was no sale of land from RIICO to assessee society. It was only a lease. The ld. AO also referred to the definition of rent provided in Section 194-I and held that the definition of rent provided in section 194-I is wide enough to include the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elopment charges, as mentioned in the agreement, the possession was liable to be taken over by the RIICO, therefore the development charges can not be considered as rent. 2.2 In view of the similar facts and circumstances of the assessee's case and respectfully following the decision of Coordinate Bench in the case of M/s. Gupta Fabtex (P) Ltd. (supra), the appeal of the assessee is allowed. 2.3 Regarding Ground No.2, briefly the facts of the case are that during the year under consideration, the appellant has made payment of ₹ 8,65,000/- to M/s Rajasthan Technical University (RTU) on account of affiliation fee on which TDS was not deducted. The AO accordingly raised demand of ₹ 97055/- u/s 201(1)/201(1A) of the IT Act. As per AO, such payment was in the nature of professional fee and that the RTU is formed by way of a State Act and not by way of Central Act and therefore it was not covered u/s 196 of IT Act. The AO also noted that the assessee has failed to produce any evidence which may prove that RTU was exempt from Income tax and that before making such payment the appellant was to obtain necessary document from the deductor in support of the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on record which may indicate that such status of M/s RTU has been accepted by the department or not. As regards other additional evidence in support of exempt income of M/s RTU being finding of auditors of AG department it may be mentioned that their findings may not be a valid basis for treating the income of M/s RTU to be exempt u/s 10(23C)(iiiab) of the Act. The important point to be noted is that the payment was made during A.Y. 2012-13 and the document to be relied upon for claim of exempted income of M/s RTU should also be pertaining to that period only. Therefore prima facie when the payment was made to M/s RTU, the appellant was required to deduct tax and as the appellant failed to deduct tax on such payment therefore such demand amounting to Rs., 97055/- as rightly raised. The ground of appeal in respect of raising of such demand on account of non-deduction of tax is accordingly dismissed. 2.5 During the course of hearing, the ld AR reiterated its submissions made before the lower authorities and submitted that RTU is not rendering any professional services. RTU is just a regulator for technical colleges and provisions of section 194J are not applicable on payment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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