ACIT, Patna V. Society for Advancement for Village Economy, Gaya

ITA 118/PAT/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9644 (ITAT-PATNA)
• Duration Of Justice: 2 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 18-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VARKEY JUDIC IA L M EMBER
• Assessee Lawyers: SANJEEV SINHA FCA SHRI
• Keywords: Tax effect
• Section: 194C; 12AA; 12; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PA T N A BENCH , PATNA BEFORE SHRI ABY. T. VARKEY , JUDICIAL MEMBER AND SHRI WASEEM AHMED , ACCOUNTANT MEMBER ITA NO. 117 - 119 / PAT / 2014 ASSESSMENT YEAR S : 2011 - 12 TO 2013 - 14 ACIT, TDS CIRCLE, PATNA / V/S . SOCIETY FOR ADVANCEMENT FOR VILLAGE ECONOMY, LALA BABU ROAD, NEW GODAWN, GAYA [ PAN NO.PTNS 05217 C ] /APPELLANT .. /RESPONDENT / BY ASSESSEE SHRI SANJEEV SINHA, FCA / BY RESPONDENT SHRI S.K. PAUL, DR / DATE OF HEARING 0 5 - 04 - 2017 / DATE OF PRONOUNCEMENT 10 - 04 - 2017 /O R D E R PER BENCH : - TH E S E THREE APPEAL S BY THE REVENUE ARE DIRECTED AGAINST THE COMMON ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - DHANBAD DATED 1 3 .0 3 .201 4 . ASSESSMENT S W ERE FRAMED BY DC IT , TDS CIRCLE, PATN A U/S 201 ( 1 ) /(1A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER S DATED 08 . 01 .20 13 FOR ASSESSMENT YEAR S 20 11 - 12 TO 2013 - 14 RESPECTIVELY . SHRI S.K. PAUL, LD. DEPARTMENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF REVENUE AND SHRI SANJEEV SINHA, LD. AUTHORIZED REPRESENTATIVE APPEARED ON BEHALF OF ASSESSEE. 2. ALL THE APPEALS ARE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY O F CONSOLIDATE D ORDER FOR THE SAKE OF BREVITY. ITA NO. 117 - 119/PAT/2014 A.YS 2011 - 12 TO 2013 - 14 ACIT TDS CIR, PATNA VS. SOCIETY FOR ADVANCEMENT FOR VILLAGE ECONOMY PAGE 2 FIRST WE TAKE UP REVENUES APPEAL IN ITA NO.117/PAT/2014 FOR A.Y.11 - 12 . 3. AT THE OUTSET, WE NOTE THAT THE TAX EFFECT IN THIS CASE FILED BY THE REVENUE IS BELOW THE LIMIT OF RS. 10,00,000/ - FIXED BY THE CBDT VIDE CIRCULAR NO.21 OF 2015, DATED 10.12.2015, FOR NOT FILING APPEALS BEFORE THE TRIBUNAL. THERE ARE CERTAIN EXCEPTIONS CARVED OUT IN THE SAID CIRCULAR BUT LD. DR COULD NOT POINT OUT THAT THIS APPEAL FALLS UNDER ANY OF THE EXCEPTIONS MENTIONED IN THE SAID CIRCULAR. IN THESE CIRCUMSTANCES, THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED IN LIMINE ON ACCOUNT OF TAX EFFECT. 4. IN THE RESULT, REVENUES APPEAL IS DISMISSED IN LIMINE . COMING TO REVENUES APPEAL IN ITA NO.118/PAT/2014 FOR A.Y. 12 - 13 . 5. FIRST ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN HOLDING THAT THE PROVISION OF SECTION 192 OF THE ACT IS APPLICABLE TO THE INSTANT TRANSACTION ON THE GROUND THAT THE RE EXIST S EMPLOYER AND EMPLOYEE RELATIONSHIP BETWEEN THE ASSESSEE AND DIS TRICT COORDINATORS . 6. BRIEFLY STATED FACTS ARE THAT ASSESSEE IN THE PRESENT CASE IS A SOCIETY AND HAVING VALID REGISTRATION U/S. 12AA OF THE ACT. THE ASSESSEE IS ENGAGED IN THE ACTIVITY OF PROVIDING MACRO BANKING SERVICES TO THE PUBLIC OF VARIOUS VILLAGES ON BEHALF OF STATE BANK OF INDIA. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAS INCURRED EXPENDITURE OF 9,24,900/ - UNDE R THE HEAD COMMISSION TO DISTRICT CO ORDINATOR. IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT DEDUCTED ANY T AX AT SOURCE (TDS) ON ITS PAYMENT OF COMMISSION TO DISTRICT COORDINATOR (DC FOR SHORT) U/S 194H OF THE ACT. ACCORDINGLY, THE AO CALLED UPON THE ASSESSEE TO EXPLAIN THE REASON FOR NON - DEDUCTION OF TDS U/S 194H OF THE ACT. IN COMPLIANCE THERETO THE ASSESSEE SUBMITTED THAT THE PERSONS WHO ARE ACTING AS D . C . ARE THE EMPLOYEES AND THEREFORE THEIR PAYMENTS ARE COVERED UNDER THE PROVISION OF SEC.192 OF THE ACT AND NOT U/S 194H OF THE ACT. HOWEVER, THE ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM ON THE BASIS OF DOCUM ENTARY EVIDENCE BEFORE AO THEREFORE THE AO HELD THAT THERE IS NO EMPLOYEE AND EMPLOYER RELATIONSHIP BETWEEN THE ASSESSEE AND THE DC. THUS, THE IMPUGNED PAYMENT IS COVERED U/S 194H OF THE ACT AND ACCORDINGLY, AO RAISED DEMAND U/S 201(1)/(1A) OF THE ACT ON A CCOUNT OF NON - DEDUCTION OF TDS. ITA NO. 117 - 119/PAT/2014 A.YS 2011 - 12 TO 2013 - 14 ACIT TDS CIR, PATNA VS. SOCIETY FOR ADVANCEMENT FOR VILLAGE ECONOMY PAGE 3 7. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED NECESSARY DETAILS OF SUCH AS APPOINTMENT LETTERS AND PAN NO. OF THE DCS ALONG WITH DETAILS OF SALARY AND COMMISSION. AS THE FRESH DOCUMENTS WERE SUBMITTED BEFORE LD. CIT(A), THEREFORE A REMAND REPORT WAS CALLED FOR FROM AO. HOWEVER, AO IN ITS REMAND REPORT HAS SUBMITTED THAT NO DETAILS OF PF AND ESI IN RESPECT TO THE DC S WERE FURNISHED. SIMILARLY, THE PAYMENTS WERE NOT BEIN G MADE TO DC S ON MONTHLY BASIS. ACCORDINGLY, AO IN HIS REMAND REPORT HAS SUBMITTED THAT THE IMPUGNED PAYMENTS ARE NOT COVERED U/S. 192 OF THE A C T BUT ON THE CONTRARY IT IS CO VERED U/S 194H OF THE ACT. HOWEVER, LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF ASSESSEE DELETED THE ADDITION MADE BY AO BY OBSERVING AS UNDER: - 2.4 I HAVE CONSIDERED THE FACTS OF THE CASE. THE APPELLANT HAS EXECUTED WRITTEN AGREEMENTS WITH SUCH DISTRICT COORDINATORS AND FIXED SALARY IS BEING PAID. IN ADDITION TO SUCH FIXED SALARY, FURTHER AMOUNT WITH THE NOMENCLATURE AS COMMISSION IS BEING PAID WHICH IS LINKED TO OUTPUT OF WORK BEING GIVEN BY THEM. NON - DEDUCTION OF PROVIDENT FUND AND ESI CAN ALSO NOT BE A GROUND FOR NOT TREATING THE PAYMENT AS SALARY UNDER THE INCOME TAX ACT 1961. E VEN SUCH COMMISSION IS PART OF SALARY AS PER DEFINITION OF SALARY CONTAINED IN SECTION 15 OF THE INCOME TAX ACT, 1961. SUCH PRACTICE IS ADOPTED BY MANY ORGANIZATIONS TO GET MORE OUTPUT FROM THEIR EMPLOYEES AND DIFFERENT NOMENCLATURES SUCH AS COMMISSION, BO NUS, INCENTIVE ETC. ARE GIVEN TO SUCH PAYMENTS. NEVERTHELESS, THE SAME REMAINS IN THE NATURE OF SALARY ON LY. THEREFORE, IT IS HELD THA T THE APPELLANT IS LIABLE FOR DEDUCTION OF TAX ON THESE AMO U NTS INCLUDING SALARY UNDER SECTI O N 192 OF THE INCOME TAX ACT, 1 961 AND NOT UNDER SECTION 194H OF THE INCOME TAX ACT, 1961. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE ON THE FOLLOWING GROUND: - 1. ON THE FACTS AND IN THE LAW THE LD. CIT(A), DHANBAD HAS ERRED IN GIVING RELIEF TO THE APPELLANT BY DELETING LIABILITY FOR TDS U/S 194H ON COMMISSION PAID TO DISTRICT CO - ORDINATORS (DCS) & CUSTOMER SERVICE POINTS. 8. BEFORE US LD. DR SUBMITTED THAT THE RE EXISTS NO EMPLOYEE AND EMPLOYER RELATIONSHIP BETWEEN THE ASSESSEE AND THE DCS AS TH E ASSESSEE FAILED TO FURNISH DETAILS OF PF AND ESI IN RESPECT TO ITS EMPLOYEES. HE VEHEMENTLY RELIED ON THE ORDER OF AO. ON THE OTHER HAND, LD. AR FOR THE ASSESSEE FILED PAPER BOOK WHICH IS RUNNING PAGES FROM 1 TO 64 AND DREW OUR ATTENTION ON PAGES 50 TO 5 5 WHERE OF THE PAPER BOOK WHERE THE SAMPLE APPOINTMENT LETTERS ARE PLACED. THE LD. AR RELIED ON THE ORDER OF LD. CIT(A). ITA NO. 117 - 119/PAT/2014 A.YS 2011 - 12 TO 2013 - 14 ACIT TDS CIR, PATNA VS. SOCIETY FOR ADVANCEMENT FOR VILLAGE ECONOMY PAGE 4 9. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD . FROM THE FOREGOING DISCUSSION, W E FIND THAT AO HAS DISALLOWED THE PAYMENT MADE BY ASSESSEE TO THE DCS ON THE GROUND THAT TDS WAS NOT DEDUCTED U/S. 194 H OF THE ACT. HOWEVER, IN APPELLATE STAGE, LD. CIT(A) TREATED THE PAYMENT PAID TO THE DCS AS SALARY AND ACCORDINGLY HELD THAT THE PROVISIO N OF SEC. 194 H ARE NOT ATTRACTED. NOW THE ISSUE BEFORE US ARISES SO AS TO WHETHER THE DCS ARE THE EMPLOYEES OF ASSESSEE OR THEY ARE RENDERING THEIR SERVICES O N COMMISSION BASIS . FROM THE SUBMISSION OF LD. AR WHICH IS ALSO RECORDED IN THE ORDER OF LD. CIT(A ) THAT DCS ARE THE EMPLOYEES OF THE ASSESSEE AND THE SAME HAS BEEN DULY SUPPORTED FROM THE APPOINTMENTS LETTER ISSUED BY THE ASSESSEE. THE EMPLOYER IS A PERSON WHO CONTROLS AND DIRECTS A SERVANT OR WORKER UNDER AN EXPRESS OR IMPLIED CONTRACT OF EMPLOYMENT . THE EMPLOYER ACCORDINGLY IS UNDER OBLIGATION TO PAY HIM THE SALARY OR WAGES IN COMPENSATION. ACCORDINGLY AN INDIVIDUAL WHO WORKS PART - TIME OR FULL - TIME UNDER A CONTRACT OF EMPLOYMENT WHETHER ORAL OR WRITTEN EXPRESSED OR IMPLIED AND HE IS LIABLE TO PERFOR M THE DUTIES AS ASSIGNED. THAT PERSON IS CALLED AS EMPLOYEE. IN THE INSTANT CASE WE FIND THAT THE DISTRICT COORDINATORS ARE WORKING UNDER THE DIRECT SUPERVISION OF THE ASSESSEE. THEY HAVE NO OTHER SEPARATE BUSINESS ORGANIZATION. THEY ARE REPRESENTING THE ORGANIZATION OF THE ASSESSEE. THUS IN OUR CONSIDERED VIEW THERE EXISTS AN EMPLOYER AND EMPLOYEE RELATIONSHIP BETWEEN THE ASSESSEE AND DISTRICT COORDINATORS. THE PATTERN OF THE PAYMENT TO THE DISTRICT COORDINATORS IS NOT A DECISIVE CRITERIA TO ESTABLISH THE RELATIONSHIP OF THE EMPLOYER AND EMPLOYEE. THE PAYMENT CAN BE MADE TO THE DCS AS MUTUALLY DECIDED BETWEEN THEM. THE PAYMENT CAN BE IN THE FORM OF FIXED SALARY PLUS INCENTIVE COMMISSION AS MUTUALLY AGREED. SIMILARLY THE PAYMENT OF PF AND ESI BY THE EM PLOYER CANNOT BE THE BASIS OF DECIDING WHETHER THERE EXIST EMPLOYER AND EMPLOYEE RELATIONSHIP . F OR THE APPLICABILITY OF PF AND ESI THERE ARE CERTAIN CONDITIONS ATTACHED TO AN ORGANIZATION . T HE CHARACTER OF THE RELATIONSHIP OF THE EMPLOYER AND EMPLOYEE CANNOT BE CHANGE D ON THE BASIS WHETHER AN ORGANIZATION IS REGISTERED UNDER PF AND ESI. I N THIS CONNECTION WE ALSO RELY IN THE ORDER OF HONBLE TRIBUNAL OF DELHI IN THE CASE OF ST. STEPHENS HOSPITAL VS. DCIT REPORTED IN 6 SOT 60 WHEREIN IT WAS HELD AS UNDER : ITA NO. 117 - 119/PAT/2014 A.YS 2011 - 12 TO 2013 - 14 ACIT TDS CIR, PATNA VS. SOCIETY FOR ADVANCEMENT FOR VILLAGE ECONOMY PAGE 5 A CAREFUL PERUSAL OF THE SAID APPOINTMENT LETTERS SHOWED THAT OUT OF THE 18 CONSULTANT DOCTORS IN QUESTION, 11 DOCTORS WERE BEING PAID A FIXED MONTHLY AMOUNT BY THE ASSESSEE, WHEREAS THE REMAINING 7 DO CTORS WERE BEING PAID SOME FIXED SHARE OF FEES RECEIVED FROM PRIVATE PATIENTS TREATED BY THEM IN ADDITION TO THE FIXED MONTHLY PAYMENT. BARRING THAT ASPECT, THERE WAS NO MATERIAL DIFFERENCE IN THE TERMS AND CONDITIONS OF THEIR APPOINTMENT. [PARA 11] KEEPIN G IN VIEW THE POSITION ARISING FROM THE TERMS OF APPOINTMENT OF CONSULTANT DOCTORS AS WELL AS THE SERVICE RULES GOVERNING THE EMPLOYEES OF THE ASSESSEES HOSPITAL, IT COULD REASONABLY BE CONCLUDED THAT ALL THE CONSULTANT DOCTORS WERE EMPLOYEES OF THE ASSES SEE, AND THAT EVEN IF THERE WAS A DISTINCTION BETWEEN THE TERMS OF EMPLOYMENT OF THE PERMANENT EMPLOYEES AND THOSE OF CONSULTANT DOCTORS, THE FACT WAS THAT THEY WERE THE EMPLOYEES OF THE ASSESSEE FALLING IN THE CATEGORY OF FIXED PERIOD/CONTRACT EMPLOYEE AN D/OR PART - TIME EMPLOYEE. IT, THEREFORE, FOLLOWED THAT THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE CONSULTANT DOCTORS WAS PURELY THAT OF EMPLOYER AND EMPLOYEE AND REMUNERATION PAID TO THEM IN TERMS OF THE SAID RELATIONSHIP WAS SALARY WHICH ATTRACTED THE P ROVISIONS OF SECTION 192. [PARA 14] THE TREATMENT GIVEN BY THE ASSESSEE AS WELL AS THE CONSULTANT DOCTORS TO THE REMUNERATION PAID IN THEIR RESPECTIVE BOOKS OF ACCOUNT WAS NOT CONCLUSIVE TO DECIDE THE NATURE OF THE SAID REMUNERATION WHICH HAD TO BE ASCERTA INED ON THE BASIS OF RELATIONSHIP BETWEEN THE ASSESSEE AND THE CONSULTANT DOCTORS. [PARA 16] THERE WAS AN EMPLOYER - EMPLOYEE RELATIONSHIP BETWEEN THE ASSESSEE AND THE CONSULTANT DOCTORS AND, CONSEQUENTLY, REMUNERATION PAID TO THEM WAS CHARGEABLE TO TAX UNDE R THE HEAD SALARIES. THE SAID PAYMENTS, THUS, WERE SUBJECT TO DEDUCTION OF TAX AS PER PROVISIONS OF SECTION 192 AND NOT AS PER PROVISIONS OF SECTION 194J. THUS, THE ASSESSING OFFICER WAS FULLY JUSTIFIED IN TREATING THE ASSESSEE AS IN DEFAULT FOR SHORT DE DUCTION OF TAX AT SOURCE FROM THE PAYMENTS MADE TO THE CONSULTANT DOCTORS. [PARA 17] THE ASSESSEES APPEAL WAS, ACCORDINGLY, DISMISSED. WE FIND THAT IN THE LIGHT OF ABOVE REASONING AND WE HOLD THAT THE ORDER OF LD. CIT(A) IS CORRECT AND IN ACCORDANCE WITH L AW AND NO INTERFERENCE IS CALLED FOR. HENCE, THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 10. NEXT INTER - CONNECTED ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN HOLDING THE PAYMENT OF COMMISSION AS NOT COVERED U/S. 194H OF THE ACT BUT TO COVER U/S. 194C OF THE ACT. 11. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAS INCURRED AN EXPENSE OF 1,64 ,18,564/ - UNDER THE HEAD COMMISSION PAID TO CUSTOMERS SERVICE POINT WITHOUT DEDUCTING TDS. ON QUESTION BY THE AO ABOUT THE NON - DEDUCTION OF TDS UNDER THE PROVISION OF SEC. 194H OF THE ACT. THE ASSESSEE SUBMITTED THAT THE PAYMENTS MADE TO ITA NO. 117 - 119/PAT/2014 A.YS 2011 - 12 TO 2013 - 14 ACIT TDS CIR, PATNA VS. SOCIETY FOR ADVANCEMENT FOR VILLAGE ECONOMY PAGE 6 THE INDIVIDUALS WORKING AS CUSTOMER SERVICE POINT IS COVERED U/S. 194C OF THE ACT AND NOT IN ALL CASES, THE PAYMENT HAS NOT EXCEEDED THE THRESHOLD LIMIT AS SPECIFIED TO SEC. 194C OF THE ACT. HOWEVER, THE AO DISREGARDED THE SUBMISSION OF ASSESSEE AND HELD THAT THE INSTANT PAYMENT IS VERY MUCH IN THE NATURE OF COMMISSION OR BROKERAGE AND THEREFORE LIABLE FOR THE TDS U/S 194H OF THE ACT. 12. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT SERVICE RENDERED BY CUSTOMER SERVICE POINT ARE ADMINISTRATIVE IN NATURE AND INVOLVING MANPOWER. THEREFORE, IMPUGNED PAYMENT FALLS UNDER THE PROVISION OF SEC. 194C OF THE ACT. AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE LD. CIT(A) DELETED THE ADDITION MADE BY AO BY OBSERVING AS UNDER : - THE APPELLANT IS REQUIRED TO DO FOR STATE BANK OF INDIA IS BEING DONE BY SUCH CSPS. THEY MAINTAIN THEIR OWN INFRASTRUCTURE IN THEIR OWN SPACE WITH THEIR OWN MANPOWER. THE APPELLANT IS PASSING ON 80% OF AMOUNT RECEIVABLE FROM THE STATE BANK OF INDIA TO SUC H CSPS. SUCH CSPS ARE REQUIRED TO MAINTAIN THEIR OWN BOOKS OF ACCOUNT AND RECORDS. IN A PRINCIPAL/AGENT RELATIONSHIP THE AGENT WOULD ONLY BE PROVIDING INPUTS OR SOME SERVICES FOR FACILITATION OF SALES OR WORK TO BE DONE BY THE PRINCIPAL ITSELF AND COMPENSA TION PAYABLE TO SUCH AGENT WOULD BE A SMALL FRACTION OF THE OVERALL GROSS RECEIPTS. HERE, ENTIRE WORK WHICH THE APPELLANT IS SUPPOSED TO DO FOR THE BANK HAS BEEN ASSIGNED TO SUCH CSPS AND 80% OF THE REVENUE, 60% AS PER AGREEMENT AND 20% BY WAY OF INCENTIVE , IS BEING PASSED ON TO THEM. IT WAS SUBMITTED THAT IN THE AGREEMENTS WHICH WE NOW BEING EXECUTED FLAT 80% REVENUE IS BEING PASSED ON IT IS A SETTLED LAW THAT NOMENCLATURE IS NOT CONCLUSIVE AS TO THE NATURE OF THE TRANSACTION. UNDE R THESE FACTS OF THE CASE , I AM OF THE CONSIDERED VIEW THAT SUCH CSPS ARE SUB - CONTRACTORS OF THE APPELLANT AND TAX AT SOURCE IS REQUIRED TO BE DEDUCTED UNDER SECTION 194C OF THE INCOME TAX ACT, 1961 AND NOT UNDER SECTION194H OF THE INCOME T A X ACT, 1961. BEING AGGRIEVED BY THIS O RDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: - 2. THE LD. CIT(A) HAS OVERLOOKED THE PROVISIONS OF SECTION 194H OF THE INCOME TAX ACT, 1961 AS REGARDS DCS. SINCE THERE IS NO EMPLOYEE - EMPLOYER RELATIONSHIP BETWEEN DCS AND SOCIE TY NO PF, ESI OR OTHER BENEFITS WERE PROVIDED TO DISTRICT CO - ORDINATORS. REGULAR SALARY PAYMENTS AT MONTHLY INTERVALS AS REQUIRED UNDER LABOUR LAWS WERE NOT MADE. THEREFORE, THIS PAYMENTS CANNOT BE SAID TO BE COVERED U/S 192 OF THE IT ACT, 1961. 3. THE LD . CIT(A) HAS IGNORED THE PROVISIONS OF SECTION194H AS REGARDS CSPS SINCE THE PAYMENTS WERE MADE FOR PROVISION OF SERVICES RATHER THAN CONTRACT FOR CARRYING OUT OF WORK. THEREFORE THIS PAYMENTS IS COVERED BY SEC. 194H OF THE ACT AND NOT SEC. 194C OF THE INC OME TAX ACT, 1961 ITA NO. 117 - 119/PAT/2014 A.YS 2011 - 12 TO 2013 - 14 ACIT TDS CIR, PATNA VS. SOCIETY FOR ADVANCEMENT FOR VILLAGE ECONOMY PAGE 7 13. BEFORE US BOTH THE PARTIES RELIED ON THE ORDER OF AUTHORITIES BELOW AS FAVOURABLE TO THEM 14. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD AS WELL AS CAREFULLY PERUSED THE LEGAL PROVISION. SECTION 194H IS CONTEMPLATING DEDUCTION OF TAX AT SOURCE FOR PAYMENT TO A RESIDENT, ON OR AFTER 1ST DAY OF JUNE 2001 OF ANY INCOME BY WAY OF COMMISSION (NOT BEING INSURANCE COMMISSION REFERRED TO IN SECTION 194D) OR B ROKERAGE. THE WORDS ARE DEFINED IN THE EXPLANATION AND IN A INCLUSIVE MANNER AND THAT INTER ALIA INDICATES ANY SERVICE IN THE COURSE OF BUYING OR SELLING OF GOODS. IN THE PRESENT CASE, THE ASSESSEE HAS EXPLAINED BEFORE THE COMMISSIONER THAT THE CSP AR E PERFORMING THE ADMINISTRATIVE FUNCTION ON BEHALF OF THE ASSESSEE. THE ASSESSEE POINTED OUT THAT THEY WERE BROUGHT IN FOR ADMINISTRATION AND MANAGEMENT OF THE BUSINESS OF MACRO FINANCING. THEY ARE THE SUB - CONTRACTORS OF THE ASSESSEE WHICH WERE APPOINTE D AFTER HAVING THE AUTHORIZATION FROM THE SBI. THE COMMISSIONER HA S NOTED THE RELEVANT CLAUSES OF THE AGREEMENT TOGETHER AND HARMONIOUSLY BETWEEN THE CSP AND THE ASSESSEE. UPON SUCH READING OF THE AGREEMENT, WE FIND THAT THE COMMISSIONER HAS NOT COMMITTED ANY ERROR OF LAW APPARENT ON THE FACE OF RECORD OR PERVERSITY. THE AGREEMENT REITERATED THAT THERE IS NO PRINCIPAL AND AGENT RELATIONSHIP. IT IS AN INDEPENDENT MANAGEMENT AND ADMINISTRATION JOB HANDED OVER TO THESE CSP . TO FACILITATE THE ADMINISTRATION AND MANAGEMENT BY THEM THE ASSESSEE AGREED PAY THE COMMISSION AT AGREED PERCENTAGE. BUT IT IS IMPORTANT TO NOTE THAT THE NOMENCLATURE CANNOT BE THE DECISIVE FACTOR FOR THE NATURE OF THE EXPENSES. IT IS IN THESE CIRCUMSTANCES WE FIND THAT NO COMMISSION OR BROK ERAGE HAS BEEN PAID AND THEREFORE SECTION 194H IS NOT ATTRACTED. 15. IN THE RESULT, REVENUES APPEAL IS DISMISSED. COMING TO REVENUES APPEAL IN ITA NO.119/PAT/2014 FOR A.Y13 - 14 . 17. AS STATED EARLIER, THE ISSUES IN THIS YEAR UNDER CONSIDERATION IS SAME THAT OF LAST YEAR. THE ONLY DIFFERENCE IS THE AMOUNT INVOLVED. SINCE THE FACTS ARE EXACTLY IDENTICAL, ITA NO. 117 - 119/PAT/2014 A.YS 2011 - 12 TO 2013 - 14 ACIT TDS CIR, PATNA VS. SOCIETY FOR ADVANCEMENT FOR VILLAGE ECONOMY PAGE 8 BOTH THE PARTIES AGREED WHATEVER VIEW TAKEN IN THE ABOVE APPEAL (ITA NO. 118 /PAT/20 14) MAY BE TAKEN IN THIS APPEAL OF REVENUE. WE HOLD ACCORDINGLY. 18. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 19. IN COMBINE RESULT, ITA NO.117/PAT/2014 IS DISMISSED IN LIMINE ON ACCOUNT OF TAX EFFECT AND ITA NO.118 - 119/PAT/2014 STAND DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 10 / 04 /201 7 SD/ - SD/ - ( ABY. T. VARKEY ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP , SR.P.S - 10 / 04 /201 7 PATNA COPY OF ORDER FORWARDED TO: - 1 . /ASSESSEE - SOCIETY FOR ADVANCEMENT FOR VILLAGE ECONOMY, LALA BABU ROAD, NEW GODAWN, GAYA 2 . / RE V EN UE - ACIT, TDS CIRCLE, PATNA 3 . CONCERNED CIT 4 . CIT (A) 5 . DR, ITAT, PATNA 6 . GUARD FILE. BY ORDER/ , /TRUE COPY/ SR.PS/PS, ITAT, PATNA