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TMI Blog2018 (6) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... ional institutions under the name of Sri Chaitanya Techno Schools and Sri Chaitanya Jr. Colleges, entered into a service agreement with M/s. K-12 Educational Management Pvt Ltd and M/s. Varsity Educational Management Pvt. Ltd for rendering of support services as may be required in relation to the administration, management and operation of educational institutions. For the services rendered by the above companies, the assessee was making payment as per the agreement and deducted TDS @ 2% u/s 194C of the Act. A survey action u/s 133A was conducted on 12.3.2015 in the business premises of the assessee at Hyderabad, during the course of which, it was observed that the services under the agreement are in the nature of technical services and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e equated with the technical services requiring deduction of tax at a higher rate u/s 194J of the Act as contented by the AO. Consequently, he also held that the levy of interest u/s 201(1A) also would not arise. Against the relief granted by the CIT (A), the Revenue is in appeal for all the A.Ys in ITA Nos.1160 to 1163/Hyd/2016. Following the orders holding that the assessee is not in default, the CIT (A) also deleted the penalty u/s 271C of the Act and against these orders, the Revenue is in appeal before us in ITA Nos.1156 to 1159/Hyd/2016. 5. At the time of hearing, both the parties agreed that similar issues had come up for consideration in the case of Sri Gowtham Academy of General & Technical Education vs. Dy.CIT in ITA No.433/Hyd/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recipients have offered the income to tax in their hands, the assessee shall not be treated as an "assessee in default" u/s 201(1) of the Act. Therefore, the appeals of the Revenue for the A.Y 2012-13 to 2015-16 are treated as partly allowed for statistical purposes. 7. As regards the penalty appeals are concerned, we find that, since the assessee has not been treated as "an assessee in default" u/s 201(1) of the Act, the penalty u/s 271C are not sustainable as held by the Coordinate Bench of the Tribunal in the case of ACIT vs. M/s. Nexgen Educational Trust (Supra). For the sake of ready reference, the relevant paragraphs are reproduced hereunder: "6. We have considered the rival contentions and perused the orders on record and various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted u/s. 194C, whereas the AO demanded the deduction u/s. 194-I and 194-J, at a higher rate. The Hon'ble High Court has held as under: "It is a settled law that what would constitute reasonable cause cannot be laid down with precision and that the question as to whether there was reasonable cause or not for the assessee not to deduct tax at source at all or under some particular provision than prescribed was a question of fact which had to be seen in the facts and circumstances of each case [Para 7]. In the instant case, the assessee had been deducting tax from the payments payable to CFAs under section 194C on a consolidated basis towards different heads. There was no reason to disbelieve the assessee that the same was being don ..... X X X X Extracts X X X X X X X X Extracts X X X X
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