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TMI Blog2019 (3) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... itional ground. 2.2 We have heard both the parties. We find that the assessee has sufficient and reasonable cause for failure to raise the additional ground before the Tribunal. Hence, we admit the additional ground. 3. The facts of the case are that a survey was carried out in the business premises of the assessee on 20.07.2010 to verify whether tax had been deducted at source against the payments made to various artists who participated in the reality shows telecast by the assessee. It was found during the course of survey that the assessee had deducted tax at source from the payments made to various artists like singers, musicians etc who participated in the reality shows as guests or judges, at 1% as per the provisions of section 194C of the Act on the ground that these payments were made as per the agreement entered into with the artists for production of the programmes meant for telecast by the assessee. The case of assessee was that its case falls u/s 194C and since it has rightly deducted the tax at 1%, no further action whatsoever can be taken against them. However, the details furnished by the assessee in this regard were scrutinized and further seen that the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10% but on fees paid for professional and technical services. Here is the case, the assessee claimed to have paid a sum of Rs. 1,03,01,669/- to celebrities who attended various cultural, political and social events as guests or judges and deducted u/s 194C tax of Rs. 1,31,191/- which is at 1.27% on the said payment. But, the Assessing Officer considered the case of the assessee as a case falling u/s 194J casting thereby the responsibility to deduct tax at 10% on the said amount of Rs. 1,03,01,6697-. Finding that no such tax at 10% was deducted, the Assessing Officer treated the assessee as assessee in default for the short deduction and charged interest of Rs. 8,25,310/- u/s 201(1) as well. 4.2 The CIT(A) observed from the above that payment made towards broadcasting and telecasting would be covered by section 194C only when the payment is made in pursuance of a contract signed between the parties concerned for the works relates to broadcasting and telecasting. The CIT(A) observed that broadcasting and telecasting including production of programmes for such broadcasting and telecasting in the instant case of assessee can be understood with reference to payments made to certain ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the actors, musicians, orators, singers etc have rendered technical services being guests or judges of a particular programme. Section 44AA of the Act also provides for film artists to be identified for the sake of technical services. As ruled in the Hon'ble Delhi High Court decision in the case of CIT vs Delhi Transco Ltd mentioned supra, technical services consist of services of technical nature when special skills or knowledge relating to technical field are required. In the circumstances, the payment made to the guests and judges of television programmes cannot be said as paid for the work of broadcasting and telecasting including production of programmes for such broadcasting and telecasting so as to bring the same as paid u/s 194C. It should necessarily be brought into the ambit of section 194J since the actors, musicians, orators, singers etc are invited to the programmes not as an individual but a persons of specialized skills. What they have done to the assessee when they perform as guests or judges for a television programme cannot be nothing but professional or technical services which in turn could very well be brought under the ambit of section 194J. In the backd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le the Finance Act, 1995, introduced the aforesaid Explanation to section 194C, it simultaneously inserted section 194J in the Act which entitled for deduction of tax at source at the time of payment of a fee "for professional or technical service". The operative portion of section 194J for the present purposes read as under: "194J - Fees for professional or technical services - (1) Any person not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of - (a) fees for technical services, or (b) fees for technical services., . shall, at the time of credit of such sum to the account of the payee and at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to five per cent of such sum a income-tax on income comprised therein" Explanation to section 194J, relevant for the present purpose, reads as under: "Explanation - For the purpose of this section - (a) 'professional services' means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession notified by ,the Board for the purposes of section 44AA." 6.2 Correspondingly, there was a CBDT Notification No. S.O. 17(E) Dt. 12th January, 1977. Specification of professions for purposes of sub-s. (1) of s. 44AA which reads as under: In exercise of the powers conferred by sub-s. (1) of s. 44AA of the IT Act, 1961 (43 of 1961), the CBDT, hereby notifies for the purposes of the said sub-section the following professions, namely: (a) the profession of authorised representative; and (b) the profession of film artist Explanation: In this notification,- (a) "authorised representative" means a person, who represents any other person, on payment of any fee or remuneration, before any Tribunal or authority constituted or appointed by or under any law for the time being in force, but does not include an employee of the person so represented or a person carrying on legal profession or a person carrying on the profession of accountancy; (b) "firm artist" means any person engaged in his professional capacity in the production of a cine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e observation of the AO that assigned producer has an absolute contract over the rights of the programme is falsified from the perusal of the different clauses of the agreement - agreement in question was an agreement to produce the programme by the assigned producer i.e., contractor on behalf of the producer i.e., assessee. "Clause (b) to Explanation III to section 194C specifically covers activity of production of programmes whereas provisions of section 194J are general in nature - Provisions of section 194C would prevail over section 194J of Act - Section 194C clearly states that payment for production of programmes constitutes payments for 'work' under section 194C - Assessee rightly deducted TDS u/s 194C at rate of 2% on payments made to contractor - CIT(A) has rightly observed that production of programmes is nothing but combination of processes right from planning - He rightly held that dubbing charges and processing fees being a part of production of television serials and programmes, are squarely covered under ambit of specific provisions of section 194C of Act and liable to TDS at rate of 2%. - General provisions of section 194J are not attracted in this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitute "fees for professional service" (FPS) for the purposes of section 194] of the Act The list of film artist cannot be extended to include other category of stunt actors, although they are engaged in the production of cinematographic film. It is also the decision of the Tribunal in other case that the photographer-cameraman, who of course figure in the list of film artist, cannot be covered by the above list when such cameraman is not engaged in skills, i.e., acting skill in films, mode/ling skills for display of merchandise, singing skills, etc., and such person can make earning out of such skills. It is not that the total earning of that person in lieu of services rendered which must attract the provisions of section 1943 of the Act. The expressions "services rendered" used in the said Explanation assume significance and therefore, the taxable receipts under section 194J of the Act are servicesspecific and not person specific. In the instant case, the payments are payable for the services of modelling and it is unconnected with the production of cinematographic film. While "modelling" is aimed at display of merchandise, the "acting" is defined as "to act in play or film" (w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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