M/s. Arihant Cheritable Trust, Indore V. The ITO (TDS)-1, Indore

ITA 909/Ind/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7627 (ITAT-INDORE)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 11-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PUNEET KUMAR
• Keywords: Charitable institution; Deemed to accrue or arise in india; Non-deduction of tax; TDS
• Section: 133A; 194C; 201(1); 201; 9(1); 9(1); 9(1); 194J; 13; 22; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.909/IND/2019 ASSESSMENT YEAR:2015-16 M/S. ARIHANT CHARITAB LE TRUST, 283-A, GUMASTA NAGAR, INDORE / VS. ITO(TDS) INDORE ( APPELLANT ) ( REVENUE ) P.A. NO. AAAAA 0654R APPELLANT BY SHRI S. N . AGRAWAL , C A REVENUE BY SHRI PUNEET KUMAR , SR. - DR DATE OF HEARING: 27.08.2020 DATE OF PRONOUNCEMENT: 31.08.2020 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)(IN SHORT LD. CIT(A)-1, INDORE DATED 03.07.2019 PERTAINING TO ASSESSMENT YEAR 2015 -16. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEA L: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONCURRING WITH THE OP INION OF THE ASSESSING OFFICER IN TREATING THE AMOUNT PAID TOWAR DS COLLECTION AND DISPOSAL OF WASTE AS A TECHNICAL SERVICE LIABLE FOR DEDUCTION ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 2 OF TAX UNDER SECTION 194J OF THE ACT EVEN WHEN THE APPELLANT HAD PAID THE SAID AMOUNT IN PURSUANCE TO A CONTRACT AND THEREFORE TDS WAS RIGHTLY DEDUCTED UNDER SECTION 19 4C OF THE ACT. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING DEMAND OF R S.6,948/- ON ACCOUNT OF SHORT DEDUCTION OF TAX AT SOURCE WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE HIM EVEN WHEN PAYEE HAD ALREADY OFFERED THE SAID AM OUNT AS ITS INCOME AND HAD PAID LEGITIMATE AMOUNT OF TAX DU E ON THE SAME. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING DEMAND OF R S.2,073/- ON ACCOUNT OF INTEREST ON SHORT DEDUCTION OF TAX AT SO URCE WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUB MISSIONS MADE BEFORE HIM. 4. THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER A ND MODIFY THE GROUNDS OF APPEAL AS TAKEN BY IT. 2. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT THE ASSESSEE DEDUCTOR M/S. ARIHANT HOSPITAL & RESEARCH CENTRE IS A UNIT OF M/S. ARIHANT CHARITABLE TRUST, INDORE. A SURVEY ACTION U /S 133A OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED AS THE A CT) WAS CONDUCTED ON 15.05.2014 TO VERIFY THE TDS COMPLIANC ES. DURING THE COURSE OF SURVEY PROCEEDINGS, STATEMENT OF SHRI MAH ENDRA BAGANI, DIRECTOR OF M/S. ARIHANT HOSPITAL & RESEARCH CENTRE WAS RECORDED. THEREAFTER, A SHOW CAUSE NOTICE U/S 201(1)/201(1A) WAS ISSUED TO THE ASSESSEE CALLING UPON TO EXPLAIN AS TO WHY IT S HOULD NOT BE DECLARED AS ASSESSEE IN DEFAULT ON ACCOUNT OF NON-D EDUCTION OF TAX @10% U/S 194J INSTEAD OF SERVICES RENDERED BY M/S. HOSWIN INCINERATOR P. LTD. AS THE SERVICE PROVIDED IS TECH NICAL IN NATURE. IN ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 3 RESPONSE THERETO THE ASSESSEE SUBMITTED ITS RESPONS E SAME WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND DECLARED THE ASSESSEE IN DEFAULT U/S 201 AND PROCEEDED TO MAKE ADDITION OF R S.2316/- AND INTEREST ON NON-DEDUCTION OF RS.608/- AMOUNTING TO RS.6,948/- VIDE ORDER DATED 31 ST MARCH, 2017. 3. AGGRIEVED AGAINST THIS ORDER ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSION S SUSTAINED THE ADDITION. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUN AL. 5. GROUND NO.1 IS AGAINST THE TREATING THE ASSESSEE IN DEFAULT FOR DEDUCTING TAX U/S 194C OF THE ACT. GROUND NO.2 IS M AKING ADDITION FOR NON-DEDUCTION OF TAX AT RS.6,948/- AND GROUND N O.3 IS AGAINST MAKING ADDITION ON ACCOUNT OF INTEREST OF NON-DEDUC TION OF TAX OF RS.2073/-. HOWEVER GROUND NO.4 IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. [ 6. APROPOS TO GROUND NOS. 1 TO 3 LD. COUNSEL FOR TH E ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN S YNOPSIS. FOR THE SAKE OF CLARITY SUBMISSIONS OF THE ASSESSEE ARE REP RODUCED AS UNDER: A.1] THE PRESENT APPEAL IS FILED BY THE APPELLANT A GAINST THE ORDER OF THE LD CIT (A)-1, INDORE DATED 03-07-2019. A.2] A TDS SURVEY UNDER SECTION 133A OF THE INCOME- TAX ACT, 1961 WAS CONDUCTED ON THE PREMISES OF THE APPELLANT ON 15-05 -2014 TO VERIFY THE TDS COMPLIANCES. A.3] DURING THE COURSE OF TDS SURVEY PROCEEDINGS, T HE ASSESSING OFFICER OPINED THAT THE APPELLANT WAS LIABLE TO DEDUCT TDS AT THE RATE OF 10% ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 4 UNDER SECTION 194J OF THE INCOME-TAX ACT, 1961 INST EAD OF TDS DEDUCTED BY THE APPELLANT AT THE RATE OF 2% UNDER SECTION 19 4C OF THE INCOME-TAX ACT, 1961 ON THE PAYMENTS MADE TO M/S HOSWIN INCINE RATOR PRIVATE LIMITED FOR COLLECTION AND DISPOSAL OF WASTE. A.4] THE ASSESSING OFFICER SUBSEQUENTLY PASSED AN O RDER UNDER SECTION 201(1)/201(1A) OF THE INCOME-TAX ACT, 1961 DATED 31 -03-2017 WHEREIN HE DETERMINED DEMAND ON ACCOUNT OF SHORT-DEDUCTION OF TAX AT RS. 6,948/- AND INTEREST ON SUCH SHORT-DEDUCTION OF TAX AT RS. 2,073/- ON THE PAYMENTS MADE TO M/S HOSWIN INCINERATOR PRIVATE LIMITED FOR COLLECTION AND DISPOSAL OF WASTE WHEREIN TDS WAS DEDUCTED AT THE RATE OF 2% UNDER SECTION 194C OF THE INCOME-TAX ACT, 1961 INSTEAD OF 10% UNDER SE CTION 194J OF THE INCOME-TAX ACT, 1961 AS OPINED BY THE ASSESSING OFF ICER. A.5] THE APPELLANT PREFERRED AN APPEAL BEFORE THE L D CIT(A)-1, INDORE AGAINST THE ORDER OF THE ASSESSING OFFICER. THE LD CIT(A)-1, INDORE DISMISSED THE APPEAL FILED BY THE APPELLANT OBSERVI NG THAT THE APPELLANT HAD ENTERED INTO A CONTRACT WITH M/S HOSWIN INCINER ATOR PRIVATE LIMITED FOR RENDERING TECHNICAL SERVICES ON WHICH TDS SHOUL D HAVE BEEN DEDUCTED UNDER SECTION 194J OF THE INCOME-TAX ACT, 1961. A.6] THE APPELLANT HAS THEREFORE PREFERRED AN APPEA L BEFORE THE HONBLE BENCH AGAINST THE ORDER OF THE LD CIT (A)-1, INDORE AND HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD CIT [A] ERRED IN CONCURRING WITH THE OPINION OF THE ASSESSING OFFICER IN TREATING THE AMOUNT PAID TOWARDS COLLECTION AND DIS POSAL OF WASTE AS A TECHNICAL SERVICE LIABLE FOR DEDUCTION OF TAX UNDER SECTION 194J OF THE ACT EVEN WHEN THE APPELLANT HAD PAID THE SAID AMOUNT IN PURSUANCE TO A CONTRACT AND THEREFORE TDS WAS RIGHTLY DEDUCTED UND ER SECTION 194C OF THE ACT. 2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD CIT [A] ERRED IN CONFIRMING DEMAND OF RS. 6,948/ - ON ACCOUNT OF SHORT DEDUCTION OF TAX AT SOURCE WITHOUT PROPERLY APPRECI ATING THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE HIM EVEN WHEN PAYE E HAD ALREADY OFFERED THE SAID AMOUNT AS ITS INCOME AND HAD PAID LEGITIMATE AMOUNT OF TAX DUE ON THE SAME. 3] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD CIT [A] ERRED IN CONFIRMING DEMAND OF RS. 2,073/ - ON ACCOUNT OF INTEREST ON SHORT DEDUCTION OF TAX AT SOURCE WITHOUT PROPERL Y APPRECIATING THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE HIM. ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 5 4] THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER A ND MODIFY THE GROUNDS OF APPEAL AS TAKEN BY IT. 1] GROUND NO. 1 TO 3 CHALLENGING THE DEMAND AS CR EATED ON ACCOUNT OF SHORT-DEDUCTION OF TAX AND INTEREST ON S UCH SHORT-DEDUCTION OF TAX ON THE PAYMENTS MADE TO HOSW IN INCINERATOR PRIVATE LIMITED 1.1] THE APPELLANT IN THESE GROUNDS OF APPEAL HAS C HALLENGED THE DEMAND OF RS. 6,948/- AND RS. 2,073/- AS CREATED ON ACCOUN T OF SHORT-DEDUCTION OF TAX AND INTEREST ON SUCH SHORT-DEDUCTION OF TAX RES PECTIVELY ON THE PAYMENTS MADE TO M/S HOSWIN INCINERATOR PRIVATE LIM ITED FOR COLLECTION AND DISPOSAL OF WASTE GENERATED IN THE HOSPITAL RUN BY THE APPELLANT. 1.2] THE APPELLANT DEDUCTED TDS AT THE RATE OF 2% U NDER SECTION 194C OF THE INCOME-TAX ACT, 1961 ON THE PAYMENTS MADE TO M/ S HOSWIN INCINERATOR PRIVATE LIMITED FOR COLLECTION AND DISP OSAL OF WASTE WHEREAS THE ASSESSING OFFICER OPINED THAT TDS OUGHT TO HAVE BEEN DEDUCTED AT THE RATE OF 10% UNDER SECTION 194J OF THE INCOME-TAX AC T, 1961 AND THEREFORE, HE DETERMINED DEMAND ON ACCOUNT OF SHORT-DEDUCTION OF TAX AT RS. 6,948/- AND INTEREST ON SUCH SHORT-DEDUCTION OF TAX AT RS. 2,073/-. QUARTER-WISE DETAILS OF DEMAND AS DETERMINED BY THE ASSESSING OF FICER ARE AS UNDER: [PAGE NO. 29-36] S. NO QUARTER AMOUNT PAID [IN RS.] TDS DEDUCTED [IN RS.] TDS DEDUCTIBLE [IN RS.] SHORT DEDUCTION [IN RS.] INTEREST [IN RS.] TOTAL DEMAND [IN RS.] 1 1 21,840 447 2,184 1,737 603 2,340 2 2 14,560 298 1,456 1,158 376 1,534 3 3 21,840 447 2,184 1,737 486 2,223 4 4 29,120 596 2,912 2,316 608 2,924 TOTAL 87,360 6,948 2,073 9,021 1.3] THE APPELLANT ENTERED INTO A CONTRACT WITH M/S HOSWIN INCINERATOR PRIVATE LIMITED FOR COLLECTION AND DISPOSAL OF WAST E AND M/S HOSWIN INCINERATOR PRIVATE LIMITED DID NOT PROVIDE ANY TEC HNICAL SERVICES TO THE APPELLANT WHICH WAS LIABLE FOR DEDUCTION OF TAX AT THE RATE OF 10% UNDER SECTION 194J OF THE INCOME-TAX ACT, 1961. THE SAID PARTY MERELY COLLECTED WASTE FROM THE HOSPITAL OF THE APPELLANT AND DISPOS ED IT OFF ACCORDINGLY AND HENCEFORTH, THE APPELLANT RIGHTLY DEDUCTED TDS AT THE RATE OF 2% UNDER SECTION 194C OF THE INCOME-TAX ACT, 1961 PURSUANT T O A CONTRACT ENTERED INTO BETWEEN THE APPELLANT AND M/S HOSWIN INCINERAT OR PRIVATE LIMITED. 1.4.1] THE LD CIT(A)-1, INDORE DISMISSED THE APPEAL FILED BY THE APPELLANT OBSERVING THAT THE APPELLANT FAILED TO CONTROVERT T HE FINDINGS OF THE ASSESSING OFFICER GIVEN AT PARA 3.3 & 3.4 OF THE AS SESSMENT ORDER. HENCE, ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 6 IT ASSUMES SIGNIFICANT IMPORTANCE TO GO THROUGH THE FINDINGS OF THE ASSESSING OFFICER GIVEN IN PARA 3.3 & 3.4 OF THE AS SESSMENT ORDER. 1.4.2] THE ASSESSING OFFICER IN PARA 3.3 OF THE ASS ESSMENT ORDER OBSERVED THAT THE NATURE OF SERVICES RENDERED BY M/S HOSWIN INCINERATOR PRIVATE LIMITED INVOLVE ELEMENT OF TECHNICAL CONSULTANCY WH ICH REQUIRES PROFESSIONAL EXPERTISE WITHIN EXPLANATION (A) OF SE CTION 194J OF THE INCOME TAX ACT AND THE MANAGERIAL SERVICES AS PER EXPLANAT ION 2 TO CLAUSE (VII) OF SUB-SECTION (1) OF SECTION 9 ARE ALSO AN INTEGRAL P ART OF THE SCHEME OF SERVICES RENDERED BY THE SERVICE PROVIDER TO THE AP PELLANT. 1.4.3] FURTHER, THE ASSESSING OFFICER IN PARA 3.4 O F THE ASSESSMENT ORDER OBSERVED THAT THESE SERVICES ARE COVERED UNDER SECT ION 194J OF THE IT ACT SINCE THE CENTRAL GOVERNMENT HAS MADE VARIOUS RULES , NOTIFICATIONS AND ORDERS UNDER SECTIONS 6, 8 AND 25 OF THE ENVIRONMEN T PROTECTION ACT, 1986 INCLUDING THE BIO-MEDICAL WASTES (MANAGEMENT & HAND LING) RULES, 1998. 1.5.1] AT THE OUTSET, THE MOOT QUESTION WHICH ARISE S FOR CONSIDERATION IS WHETHER THE PAYMENTS MADE BY THE APPELLANT TO M/S H OSWIN INCINERATOR PRIVATE LIMITED FOR COLLECTION AND DISPOSAL OF WAST E SHALL FALL WITHIN THE AMBIT OF FEES FOR PROFESSIONAL SERVICES AS PER EX PLANATION (A) TO SECTION 194J OF THE INCOME-TAX ACT, 1961 OR WITHIN THE AMBI T OF FEES FOR TECHNICAL SERVICES AS PER EXPLANATION 2 TO CLAUSE (VII) OF S UB-SECTION (1) OF SECTION 9 OF THE INCOME-TAX ACT, 1961 SO AS TO ATTRACT THE PR OVISIONS OF SECTION 194J OF THE INCOME-TAX ACT, 1961. 1.5.2] THE RELEVANT EXTRACT OF SECTION 194J AND EXP LANATION 2 TO CLAUSE (VII) OF SUB-SECTION (1) OF SECTION 9 OF THE INCOME-TAX A CT, 1961 WHICH ARE RELEVANT FOR THE FACTS OF THE PRESENT CASE ARE REPR ODUCED HEREUNDER FOR YOUR READY REFERENCE: '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 PROFESSIONAL SERVICES, OR (B) FEES FOR TECHNICAL SERVICES OR (BA) .. (C) (D) .. SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CH EQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO TEN PER CENT OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN: .. .. ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 7 EXPLANATION.-FOR THE PURPOSES OF THIS SECTION,- (A) 'PROFESSIONAL SERVICES' MEANS SERVICES RENDERED BY A PERSON IN THE COURSE OF CARRYING ON LEGAL, MEDICAL, ENGINEERING O R ARCHITECTURAL PROFESSION OR THE PROFESSION OF ACCOUNTANCY OR TECHNICAL CONSU LTANCY OR INTERIOR DECORATION OR ADVERTISING OR SUCH OTHER PROFESSION AS IS NOTIFIED BY THE BOARD FOR THE PURPOSES OF SECTION 44AA OR OF THIS S ECTION; (B) 'FEES FOR TECHNICAL SERVICES' SHALL HAVE THE SAME M EANING AS IN EXPLANATION 2 TO CLAUSE (VII) OF SUB-SECTION (1) OF SECTION 9; 9. INCOME DEEMED TO ACCRUE OR ARISE IN INDIA. (1) THE FOLLOWING INCOMES SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA: (I) .............. .............. .............. (VII) INCOME BY WAY OF FEES FOR TECHNICAL SERVICES PAYABLE BY (A) .............. (B) .............. (C) .............. .............. EXPLANATION 2.FOR THE PURPOSES OF THIS CLAUSE, 'FE ES FOR TECHNICAL SERVICES' MEANS ANY CONSIDERATION (INCLUDING ANY LU MP SUM CONSIDERATION) FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR C ONSULTANCY SERVICES (INCLUDING THE PROVISION OF SERVICES OF TECHNICAL O R OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION, ASS EMBLY, MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATIO N WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD ' SALARIES'; 1.5.3] IN LIGHT OF THE RELEVANT EXTRACT OF SECTION 194J AND EXPLANATION 2 TO CLAUSE (VII) OF SUB-SECTION (1) OF SECTION 9 OF THE INCOME-TAX ACT, 1961 AS REPRODUCED HEREINABOVE, THE OBSERVATIONS OF THE ASS ESSING OFFICER ARE CATEGORICALLY DEALT WITH HEREUNDER FOR YOUR READY R EFERENCE: 1.6.1] THE FIRST OBSERVATION OF THE ASSESSING OFFIC ER WAS THAT THE NATURE OF SERVICES RENDERED BY M/S HOSWIN INCINERATOR PRIVATE LIMITED INVOLVE ELEMENT OF TECHNICAL CONSULTANCY WHICH REQUIRES PRO FESSIONAL EXPERTISE WITHIN EXPLANATION (A) OF SECTION 194J OF THE INCOM E-TAX ACT, 1961. 1.6.2] IT IS PERTINENT TO NOTE THAT EXPLANATION (A) OF SECTION 194J OF THE INCOME-TAX ACT, 1961 EXHAUSTIVELY DEFINES PROFESSI ONAL SERVICES AS SERVICES RENDERED BY A PERSON IN THE COURSE OF CARR YING ON LEGAL, MEDICAL, ENGINEERING OR ARCHITECTURAL PROFESSION OR THE PROF ESSION OF ACCOUNTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DECORATION OR ADV ERTISING OR SUCH OTHER PROFESSION AS IS NOTIFIED BY THE BOARD. ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 8 1.6.3] THE PROFESSIONAL SERVICES AS DEFINED IN EXPL ANATION (A) OF SECTION 194J OF THE INCOME-TAX ACT, 1961 INCLUDE VARIOUS SP ECIFIC SERVICES RENDERED BY PROFESSIONALS WHICH DOES NOT INCLUDE AN Y SERVICES RELATED TO WASTE COLLECTION AND DISPOSAL. THE CONTENTION OF TH E ASSESSING OFFICER THAT THESE SERVICES INVOLVE ELEMENT OF TECHNICAL CONSULT ANCY IS ABSOLUTELY IRRELEVANT AS NO TECHNICAL CONSULTANCY WHATSOEVER W AS OFFERED BY M/S HOSWIN INCINERATOR PRIVATE LIMITED TO THE APPELLANT . THE SERVICE PROVIDER, M/S HOSWIN INCINERATOR PRIVATE LIMITED DISPOSED OFF WASTE IN ITS PLANT AT HIGH TEMPERATURE UNDER THE SUPERVISION OF TECHNICIA NS/ PROFESSIONALS AS ENVISAGED BY THE ASSESSING OFFICER BUT IT CANNOT BY ANY STRETCH OF IMAGINATION LEAD TO AN INFERENCE THAT ANY SORT OF T ECHNICAL CONSULTANCY WAS BEING OFFERED TO THE APPELLANT. 1.6.4] THE HONBLE ITAT DELHI BENCH F IN THE CASE OF ITO, ROHTAK V. AKON ELECTRONICS INDIA (P.) LTD. AS REPORTED IN [2018] 9 7 TAXMANN.COM 176 (DELHI - TRIB.) HAS DEALT WITH THE ASPECT OF TECHNICAL CO NSULTANCY AND HAS HELD THAT: [PAGE NO. 37-40] 11. LD.AO HAS ALLEGED THE ACTIVITIES RENDERED BY B EL TO ASSESSEE WITHIN THE AMBIT OF SECTION 194J OF THE ACT VIS-A-VIS SECT ION 194C AS PER ASSESSEE. EXPLANATION 2 SECTION 194J CARVES OUT EXEMPTION, WH EREIN ANY CONSIDERATION MADE TOWARDS ANY CONSTRUCTION, ASSEMB LY, MINING OR LIKE UNDERTAKEN PROJECT BY A RECIPIENT, WOULD NOT BE INC LUDED WITHIN THE PURVIEW OF SECTION 194J OF THE ACT. SECTION 194J RE FERS TO DEFINITION OF 'FEES FOR TECHNICAL SERVICES', AS HAVING SAME MEANING AS PER EXPLANATION 2 TO SUB-CLAUSE (VII) OF SUBSECTION (1) OF SECTION 9. IN OUR CONSIDERED OPINION THE AGREEMENT VERY CLEARLY SPELLS OUT THAT BEL UNDERTOO K ASSEMBLING OF RAW MATERIALS PROVIDED BY ASSESSEE IN RESPECT OF MODULE S M1 AND M2, AS PER SPECIFICATIONS PROVIDED BY ASSESSEE. NO DOUBT CERTA IN TRAINING HAS BEEN PROVIDED BY ASSESSEE TO THE ENGINEERS OF BEL, HOWEV ER THESE RENDERING OF TRAINING HAS BEEN SEPARATELY REMUNERATED BY BEL TO ASSESSEE. THUS IN OUR CONSIDERED OPINION PAYMENT RECEIVED BY BET L TOWARD S THE WORK CARRIED ON UNDER PHASE II OF THE AGREEMENT, WILL NOT FALL U NDER THE DEFINITION OF THE TERM PROFESSIONAL SERVICES AS NO NEW TECHNICAL CONS ULTANCY HAS BEEN OFFERED BY BEL TO ASSESSEE. WE THEREFORE DO NOT FIN D ANY FAULT IN THE OBSERVATIONS OF LD.CIT (A) IN HOLDING THAT THE WORK UNDERTAKEN BY BEL IS COVERED UNDER THE PROVISIONS OF SECTION 194C. ACCOR DINGLY WE DISMISS THE GROUND RAISED BY THE REVENUE. [EMPHASIS SUPPLIED] 1.6.5] IN VIEW OF THE ABOVE DISCUSSION AND JUDICIAL PRECEDENT CITED SUPRA, IT IS QUITE CLEAR THAT PAYMENTS MADE BY THE APPELLANT TO M/S HOSWIN INCINERATOR PRIVATE LIMITED FOR COLLECTION AND DISP OSAL OF WASTE DID NOT FALL WITHIN THE PURVIEW OF FEES FOR PROFESSIONAL SERVIC ES SO AS TO ATTRACT THE PROVISIONS OF SECTION 194J OF THE INCOME-TAX ACT, 1 961. ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 9 1.7.1] THE SECOND OBSERVATION OF THE ASSESSING OFFI CER WAS THAT THESE SERVICES WERE TECHNICAL SERVICES AS PER EXPLANATION 2 TO CLAUSE (VII) OF SUB- SECTION (1) OF SECTION 9 OF THE INCOME-TAX ACT, 196 1. 1.7.2] IT IS PERTINENT TO NOTE THAT EXPLANATION 2 T O CLAUSE (VII) OF SUB-SECTION (1) OF SECTION 9 OF THE INCOME-TAX ACT, 1961 EXHAUS TIVELY DEFINES FEES FOR TECHNICAL SERVICES AS CONSIDERATION (INCLUDING ANY LUMP SUM CONSIDERATION) FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF SE RVICES OF TECHNICAL OR OTHER PERSONNEL). 1.7.3] AT THE OUTSET, IT IS WORTH HIGHLIGHTING THAT FOR ANY PAYMENT TO FALL WITHIN THE PURVIEW OF FEES FOR TECHNICAL SERVICES , IT IS OF UTMOST IMPORTANCE THAT PAYMENT IS MADE FOR SERVICES WHICH ARE TECH NICAL IN NATURE. 1.7.4] IT HAS BEEN CATEGORICALLY STATED ON PAGE NO. 424-425 OF THE ELEVENTH EDITION OF KANGA & PALKHIVALAS THE LAW AND PRACTI CE OF INCOME TAX THAT IF THE PAYMENT IS MADE FOR AVAILING STANDARD FACILI TIES, THEN, IT WOULD NOT BE TERMED AS FEES FOR TECHNICAL SERVICES. [PAGE N O. 41-42] 1.7.5] THE HONBLE SUPREME COURT OF INDIA IN THE CA SE OF CIT-4, MUMBAI V. KOTAK SECURITIES LTD. AS REPORTED IN [2016] 383 ITR 1 (SC) HAD AN OCCASION TO ELABORATELY DISCUSS THE DIFFERENCE BETWEEN FACI LITIES AND SERVICES AND THE HONBLE SUPREME COURT OF INDIA HAS CATEGORI CALLY HELD THAT 'TECHNICAL SERVICES' LIKE 'MANAGERIAL AND CONSULTAN CY SERVICE' WOULD DENOTE SEEKING OF SERVICES TO CATER TO THE SPECIAL NEEDS OF THE CONSUMER/USER AS MAY BE FELT NECESSARY AND THE MAKI NG OF THE SAME AVAILABLE BY THE SERVICE PROVIDER AND IF THERE IS N OTHING SPECIAL, EXCLUSIVE OR CUSTOMIZED IN THE SERVICE, THEN, SUCH SERVICES, WOULD UNDOUBTEDLY BE TERMED AS FACILITIES AND WILL NOT TANTAMOUNT TO ' TECHNICAL SERVICES' SO AS TO ATTRACT THE PROVISIONS OF SECTION 194J OF THE IN COME-TAX ACT, 1961. THE RELEVANT EXTRACT FROM THE JUDGMENT OF THE HONBLE S UPREME COURT OF INDIA IS REPRODUCED HEREUNDER FOR YOUR READY REFERENCE: [PAG E NO. 43-48] 6. WHAT MEANING SHOULD BE ASCRIBED TO THE WORD 'TE CHNICAL SERVICES' APPEARING IN EXPLANATION 2 TO CLAUSE (VII) TO SECTI ON 9(1) OF THE ACT IS THE MOOT QUESTION. IN CIT V. BHARTI CELLULAR LTD. [2011 ] 330 ITR 239/[2010] 193 TAXMAN 97 THIS COURT HAS OBSERVED AS FOLLOWS: 'RIGHT FROM 1979, VARIOUS JUDGMENTS OF THE HIGH COU RTS AND TRIBUNALS HAVE TAKEN THE VIEW THAT THE WORDS 'TECHNICAL SERVI CES' HAVE GOT TO BE READ IN THE NARROWER SENSE BY APPLYING THE RULE OF NOSCI TUR A SOCIIS, PARTICULARLY, BECAUSE THE WORDS 'TECHNICAL SERVICES' IN SECTION 9 (1)(VII), READ WITH ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 10 EXPLANATION 2 COMES IN BETWEEN THE WORDS 'MANAGERIA L AND CONSULTANCY SERVICES'.' 7. 'MANAGERIAL AND CONSULTANCY SERVICES' AND, THERE FORE, NECESSARILY 'TECHNICAL SERVICES', WOULD OBVIOUSLY INVOLVE SERVI CES RENDERED BY HUMAN EFFORTS. THIS HAS BEEN THE CONSISTENT VIEW TAKEN BY THE COURTS INCLUDING THIS COURT IN BHARTI CELLULAR LTD'S. CASE (SUPRA). HOWEVER, IT CANNOT BE LOST SIGHT OF THAT MODERN DAY SCIENTIFIC AND TECHNOLOGIC AL DEVELOPMENTS MAY TEND TO BLUR THE SPECIFIC HUMAN ELEMENT IN AN OTHER WISE FULLY AUTOMATED PROCESS BY WHICH SUCH SERVICES MAY BE PROVIDED. THE SEARCH FOR A MORE EFFECTIVE BASIS, THEREFORE, MUST BE MADE. 8. A READING OF THE VERY ELABORATE ORDER OF THE ASS ESSING OFFICER CONTAINING A LENGTHY DISCOURSE ON THE SERVICES MADE AVAILABLE BY THE STOCK EXCHANGE WOULD GO TO SHOW THAT APART FROM FACILITIES OF A FA CELESS SCREEN BASED TRANSACTION, A CONSTANT UPGRADATION OF THE SERVICES MADE AVAILABLE AND SURVEILLANCE OF THE ESSENTIAL PARAMETERS CONNECTED WITH THE TRADE INCLUDING THOSE OF A PARTICULAR/SINGLE TRANSACTION THAT WOULD LEAD CREDENCE TO ITS AUTHENTICITY IS PROVIDED FOR BY THE STOCK EXCHANGE. ALL SUCH SERVICES, FULLY AUTOMATED, ARE AVAILABLE TO ALL MEMBERS OF THE STOC K EXCHANGE IN RESPECT OF EVERY TRANSACTION THAT IS ENTERED INTO. THERE IS NOTHING SPECIAL, EXCLUSIVE OR CUSTOMISED SERVICE THAT IS RENDERED BY THE STOCK EXCHANGE. 'TECHNICAL SERVICES' LIKE 'MANAGERIAL AND CONSULTANCY SERVICE' WOULD DENOTE SEEKING OF SERVICES TO CATER TO THE SPECIAL NEEDS OF THE CO NSUMER/USER AS MAY BE FELT NECESSARY AND THE MAKING OF THE SAME AVAILABLE BY THE SERVICE PROVIDER. IT IS THE ABOVE FEATURE THAT WOULD DISTIN GUISH/IDENTIFY A SERVICE PROVIDED FROM A FACILITY OFFERED. WHILE THE FORMER IS SPECIAL AND EXCLUSIVE TO THE SEEKER OF THE SERVICE, THE LATTER, EVEN IF TERM ED AS A SERVICE, IS AVAILABLE TO ALL AND WOULD THEREFORE STAND OUT IN DISTINCTION TO THE FORMER. THE SERVICE PROVIDED BY THE STOCK EXCHANGE FOR WHICH TR ANSACTION CHARGES ARE PAID FAILS TO SATISFY THE AFORESAID TEST OF SPECIAL IZED, EXCLUSIVE AND INDIVIDUAL REQUIREMENT OF THE USER OR CONSUMER WHO MAY APPROACH THE SERVICE PROVIDER FOR SUCH ASSISTANCE/SERVICE. IT IS ONLY SERVICE OF THE ABOVE KIND THAT, ACCORDING TO US, SHOULD COME WITHIN THE AMBIT OF THE EXPRESSION 'TECHNICAL SERVICES' APPEARING IN EXPLANATION 2 OF SECTION 9(1)(VII) OF THE ACT. IN THE ABSENCE OF THE ABOVE DISTINGUISHING FEA TURE, SERVICE, THOUGH RENDERED, WOULD BE MERE IN THE NATURE OF A FACILITY OFFERED OR AVAILABLE WHICH WOULD NOT BE COVERED BY THE AFORESAID PROVISI ON OF THE ACT. 9. THERE IS YET ANOTHER ASPECT OF THE MATTER WHICH, IN OUR CONSIDERED VIEW, WOULD REQUIRE A SPECIFIC NOTICE. THE SERVICE MADE A VAILABLE BY THE BOMBAY STOCK EXCHANGE [BSE ONLINE TRADING (BOLT) SYSTEM] F OR WHICH THE CHARGES IN QUESTION HAD BEEN PAID BY THE APPELLANT-ASSESSEE ARE COMMON SERVICES THAT EVERY MEMBER OF THE STOCK EXCHANGE IS NECESSAR ILY REQUIRED TO AVAIL OF TO CARRY OUT TRADING IN SECURITIES IN THE STOCK EXC HANGE. THE VIEW TAKEN BY THE HIGH COURT THAT A MEMBER OF THE STOCK EXCHANGE HAS AN OPTION OF TRADING THROUGH AN ALTERNATIVE MODE IS NOT CORRECT. A MEMBER WHO WANTS TO CONDUCT HIS DAILY BUSINESS IN THE STOCK EXCHANGE HA S NO OPTION BUT TO ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 11 AVAIL OF SUCH SERVICES. EACH AND EVERY TRANSACTION BY A MEMBER INVOLVES THE USE OF THE SERVICES PROVIDED BY THE STOCK EXCHA NGE FOR WHICH A MEMBER IS COMPULSORILY REQUIRED TO PAY AN ADDITIONA L CHARGE (BASED ON THE TRANSACTION VALUE) OVER AND ABOVE THE CHARGES FOR T HE MEMBERSHIP IN THE STOCK EXCHANGE. THE ABOVE FEATURES OF THE SERVICES PROVIDED BY THE STOCK EXCHANGE WOULD MAKE THE SAME A KIND OF A FACILITY P ROVIDED BY THE STOCK EXCHANGE FOR TRANSACTING BUSINESS RATHER THAN A TEC HNICAL SERVICE PROVIDED TO ONE OR A SECTION OF THE MEMBERS OF THE STOCK EXC HANGE TO DEAL WITH SPECIAL SITUATIONS FACED BY SUCH A MEMBER(S) OR THE SPECIAL NEEDS OF SUCH MEMBER(S) IN THE CONDUCT OF BUSINESS IN THE STOCK E XCHANGE. IN OTHER WORDS, THERE IS NO EXCLUSIVITY TO THE SERVICES REND ERED BY THE STOCK EXCHANGE AND EACH AND EVERY MEMBER HAS TO NECESSARI LY AVAIL OF SUCH SERVICES IN THE NORMAL COURSE OF TRADING IN SECURIT IES IN THE STOCK EXCHANGE. SUCH SERVICES, THEREFORE, WOULD UNDOUBTED LY BE APPROPRIATE TO BE TERMED AS FACILITIES PROVIDED BY THE STOCK EXCHA NGE ON PAYMENT AND DOES NOT AMOUNT TO 'TECHNICAL SERVICES' PROVIDED BY THE STOCK EXCHANGE, NOT BEING SERVICES SPECIFICALLY SOUGHT FOR BY THE U SER OR THE CONSUMER. IT IS THE AFORESAID LATTER FEATURE OF A SERVICE RENDERED WHICH IS THE ESSENTIAL HALLMARK OF THE EXPRESSION 'TECHNICAL SERVICES' AS APPEARING IN EXPLANATION 2 TO SECTION 9(1)(VII) OF THE ACT. 10. FOR THE AFORESAID REASONS, WE HOLD THAT THE VIE W TAKEN BY THE BOMBAY HIGH COURT THAT THE TRANSACTION CHARGES PAID TO THE BOMBAY STOCK EXCHANGE BY ITS MEMBERS ARE FOR 'TECHNICAL SERVICES ' RENDERED IS NOT AN APPROPRIATE VIEW. SUCH CHARGES, REALLY, ARE IN THE NATURE OF PAYMENTS MADE FOR FACILITIES PROVIDED BY THE STOCK EXCHANGE. NO TDS ON SUCH PAYMENTS WOULD, THEREFORE, BE DEDUCTIBLE UNDER SECT ION 194J OF THE ACT. [EMPHASIS SUPPLIED] 1.7.6] FURTHER, THE HONBLE MADRAS HIGH COURT IN TH E CASE OF SKYCELL COMMUNICATIONS LTD. V. DCIT AS REPORTED IN [2001] 2 51 ITR 53 (MADRAS) HAS CATEGORICALLY HELD THAT THE FACILITY WHICH REMA INS THE SAME IRRESPECTIVE OF THE CUSTOMER SHALL NOT PARTAKE THE NATURE OF FE ES FOR TECHNICAL SERVICES. THE RELEVANT EXTRACT FROM THE SAID JUDGM ENT IS REPRODUCED HEREUNDER FOR YOUR READY REFERENCE: [PAGE NO. 49-51 ] 7. IN THE MODERN DAY WORLD, ALMOST EVERY FACET OF ONES LIFE IS LINKED TO SCIENCE AND TECHNOLOGY INASMUCH AS NUMEROUS THINGS USED OR RELIED UPON IN EVERY DAY LIFE IS THE RESULT OF SCIENTIFIC AND T ECHNOLOGICAL DEVELOPMENT. EVERY INSTRUMENT OR GADGET THAT IS USED TO MAKE LIF E EASIER IS THE RESULT OF SCIENTIFIC INVENTION OR DEVELOPMENT AND INVOLVES TH E USE OF TECHNOLOGY. ON THAT SCORE, EVERY PROVIDER OF EVERY INSTRUMENT OR F ACILITY USED BY A PERSON CANNOT BE REGARDED AS PROVIDING TECHNICAL SERVICE. ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 12 10. INSTALLATION AND OPERATION OF SOPHISTICATED EQU IPMENTS WITH A VIEW TO EARN INCOME BY ALLOWING CUSTOMERS TO AVAIL OF THE B ENEFIT OF THE USER OF SUCH EQUIPMENT, DOES NOT RESULT IN THE PROVISION OF TECHNICAL SERVICE TO THE CUSTOMER FOR A FEE. 11. WHEN A PERSON DECIDES TO SUBSCRIBE TO A CELLULA R TELEPHONE SERVICE IN ORDER TO HAVE THE FACILITY OF BEING ABLE TO COMMUNI CATE WITH OTHERS, HE DOES NOT CONTRACT TO RECEIVE A TECHNICAL SERVICE. WHAT H E DOES AGREE TO IS TO PAY FOR THE USE OF THE AIRTIME FOR WHICH HE PAYS A CHAR GE. THE FACT THAT THE TELEPHONE SERVICE PROVIDER HAS INSTALLED SOPHISTICA TED TECHNICAL EQUIPMENT IN THE EXCHANGE TO ENSURE CONNECTIVITY TO ITS SUBSC RIBER, DOES NOT ON THAT SCORE, MAKE IT PROVISION OF A TECHNICAL SERVICE TO THE SUBSCRIBER. THE SUBSCRIBER IS NOT CONCERNED WITH THE COMPLEXITY OF THE EQUIPMENT INSTALLED IN THE EXCHANGE, OR THE LOCATION OF THE BASE STATIO N. ALL THAT HE WANTS IS THE FACILITY OF USING THE TELEPHONE WHEN HE WISHES TO, AND BEING ABLE TO, GET CONNECTED TO THE PERSON AT THE NUMBER TO WHICH HE D ESIRES TO BE CONNECTED. WHAT APPLIES TO CELLULAR MOBILE TELEPHONE IS ALSO A PPLICABLE TO FIXED TELEPHONE SERVICE. NEITHER SERVICE CAN BE REGARDED AS TECHNICAL SERVICE FOR THE PURPOSE OF SECTION 194J. 14. TECHNICAL SERVICE REFERRED TO IN SECTION 9(1) (VII) CONTEMPLATES RENDERING OF A SERVICE TO THE PAYER OF THE FEE. MERE COLLEC TION OF A FEE FOR USE OF A STANDARD FACILITY PROVIDED TO ALL THOSE WILLING TO PAY FOR IT DOES NOT AMOUNT TO THE FEE HAVING BEEN RECEIVED FOR TECHNICAL SERVI CES. [EMPHASIS SUPPLIED] 1.7.7] IN VIEW OF THE FINDINGS GIVEN BY THE HONBLE SUPREME COURT OF INDIA AND HONBLE MADRAS HIGH COURT IN THE JUDICIAL PRECE DENTS CITED SUPRA, IT IS QUITE CLEAR THAT FACILITY OF WASTE COLLECTION AND D ISPOSAL PROVIDED BY M/S HOSWIN INCINERATOR PRIVATE LIMITED TO THE APPELLANT SHALL NOT TANTAMOUNT TO TECHNICAL SERVICES SINCE THE SERVICE PROVIDER, M/ S HOSWIN INCINERATOR PRIVATE LIMITED RUNS BIO-MEDICAL WASTE TREATMENT FA CILITY IN INDORE WHEREIN IT DISPOSES OFF THE BIO-MEDICAL WASTE COLLECTED FRO M ALL THE HOSPITALS AND NURSING HOMES SITUATED IN INDORE AND NEARBY PLACES. THE FACILITY OF WASTE COLLECTION AND DISPOSAL PROVIDED BY M/S HOSWIN INCI NERATOR PRIVATE LIMITED IS NOT SOMETHING WHICH THE SERVICE PROVIDER PROVIDES EXCLUSIVELY TO THE APPELLANT CATERING TO ITS SPECIALIZED, EXCLUSIV E AND INDIVIDUAL REQUIREMENT. RATHER, THE FACILITY OF WASTE COLLECTI ON AND DISPOSAL IS PROVIDED ON A STANDARDIZED AND UNIFORM BASIS TO ALL THE HOSPITALS AND NURSING HOMES OF THE CITY. IT IS QUITE CLEARLY LAID DOWN BY THE HONBLE SUPREME COURT OF INDIA THAT ONLY THOSE SERVICES WHI CH SATISFY THE AFORESAID TEST OF SPECIALIZED, EXCLUSIVE AND INDIVI DUAL REQUIREMENT OF THE USER OR CONSUMER SHOULD COME WITHIN THE AMBIT OF TH E EXPRESSION 'TECHNICAL SERVICES' APPEARING IN EXPLANATION 2 OF SECTION 9(1)(VII) OF THE ACT. HENCE, IN VIEW OF THE DETAILED ANALYSIS AND FI NDINGS OF THE HONBLE SUPREME COURT OF INDIA, IT CAN BE SATISFACTORILY CO NCLUDED THAT PAYMENT MADE BY THE APPELLANT TO M/S HOSWIN INCINERATOR PRI VATE LIMITED FOR ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 13 COLLECTION AND DISPOSAL OF WASTE CANNOT BY ANY STRE TCH OF IMAGINATION BE CONSIDERED AS FEES FOR TECHNICAL SERVICES SO AS T O ATTRACT THE PROVISIONS OF SECTION 194J OF THE INCOME-TAX ACT, 1961. 1.8.1] FURTHER, IT IS ALSO A WELL SETTLED POSITION OF LAW THAT PROVISION OF SECTION 194J OF THE INCOME-TAX ACT, 1961 WOULD HAVE APPLICATION ONLY WHEN THE TECHNOLOGY OR TECHNICAL KNOWLEDGE OF A PER SON IS MADE AVAILABLE TO OTHERS AND NOT WHERE BY USING TECHNICAL SYSTEMS, SERVICES ARE RENDERED TO OTHERS. 1.8.2] THE HONBLE ITAT JAIPUR BENCH A IN THE CAS E OF JAIPUR VIDYUT VITRAN NIGAM LTD. V. DCIT AS REPORTED IN [2009] 123 TTJ 888 (JAIPUR) HAS CATEGORICALLY HELD THAT: 9.6. AN ANALYSIS OF ABOVE CASES LAYS DOWN THE PROP OSITION THAT SECTION 194J WOULD HAVE APPLICATION ONLY WHEN THE TECHNOLOG Y OR TECHNICAL KNOWLEDGE OF A PERSON IS MADE AVAILABLE TO OTHERS A ND NOT WHERE BY USING TECHNICAL SYSTEMS, SERVICES ARE RENDERED TO OTHERS. RENDERING OF SERVICES BY ALLOWING USE OF TECHNICAL SYSTEM IS DIFFERENT TH AN CHARGING FEES FOR RENDERING TECHNICAL SERVICES. THE APPLICABILITY OF SECTION 194J WOULD COME INTO EFFECT ONLY WHEN BY MAKING PAYMENT OF FEE FOR TECHNICAL SERVICES, ASSESSEE ACQUIRED CERTAIN SKILL/KNOWLEDGE/INTELLECT WHICH CAN BE FURTHER USED BY HIM FOR ITS OWN PURPOSE/RESEARCH. WHERE FAC ILITY IS PROVIDED BY USE OF MACHINE/ROBOT OR WHERE SOPHISTICATED EQUIPME NTS ARE INSTALLED AND OPERATED WITH A VIEW TO EARN INCOME BY ALLOWING THE CUSTOMERS TO AVAIL OF THE BENEFIT BY USER OF SUCH EQUIPMENT, THE SAME DOE S NOT RESULT IN THE PROVISION OF TECHNICAL SERVICE TO THE CUSTOMER FOR A FEE. SIMILAR IS THE PROPOSITION LAID DOWN IN OTHER CASES RELIED BY THE LEARNED AUTHORISED REPRESENTATIVE SUPRA. [EMPHASIS SUPPLIED] 1.8.3] THE HONBLE ITAT CHANDIGARH BENCH B IN THE CASE OF HFCL INFOTEL LIMITED V. ITO AS REPORTED IN [2006] 99 TTJ 440 (CH ANDIGARH) HAS HELD THAT: 9. WE HAVE HEARD BOTH THE PARTIES AND HAVE GONE TH ROUGH THE ORDERS OF LOWER AUTHORITIES AND THE DECISIONS REFERRED BY THE PARTIES. WE ARE OF THE OPINION THAT THE INTERCONNECT CHARGES PAID BY THE A SSESSEE TO BSNL CANNOT BE TREATED AS TECHNICAL SERVICES AS PROVIDED UNDER S. 194J. THE ASSESSEE- COMPANY IS PAYING INTERCONNECT CHARGES FOR USING TH E NETWORK OF BSNL. NO DOUBT THAT THE HIGHLY TECHNICAL AND SOPHISTICATED E QUIPMENTS AND INFRASTRUCTURE IS USED BY THE TELEPHONE OPERATORS B UT THAT ITSELF DOES NOT MEAN THAT THE CHARGES PAID FOR ROUTING THE TELEPHON E CALLS THROUGH THE SAID NETWORK MEANS THAT THE TECHNICAL SERVICE IS BEING P ROVIDED. [EMPHASIS SUPPLIED] ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 14 1.8.4] IN VIEW OF THE FINDINGS REITERATED IN THE JU DICIAL PRECEDENTS CITED SUPRA, IT IS QUITE EVIDENT THAT EVEN IN THE FACTS O F THE PRESENT CASE, THE FACT THAT HIGHLY TECHNICAL AND SOPHISTICATED EQUIPMENT A ND INFRASTRUCTURE WERE BEING USED BY M/S HOSWIN INCINERATOR PRIVATE LIMITE D FOR DISPOSAL OF WASTE SHALL HAVE NO SIGNIFICANCE IN DETERMINING WHE THER TECHNICAL SERVICES WERE BEING RENDERED TO THE APPELLANT OR NOT. IT IS WELL ESTABLISHED THAT IF FACILITY IS PROVIDED BY USE OF MACHINE/ROBOT OR WHE RE SOPHISTICATED EQUIPMENTS ARE INSTALLED AND OPERATED WITH A VIEW T O EARN INCOME BY ALLOWING THE CUSTOMERS TO AVAIL OF THE BENEFIT BY USER OF SUCH EQUIPMENT, THE SAME DOES NOT RESULT IN THE PROVISION OF TECHN ICAL SERVICE TO THE CUSTOMER FOR A FEE UNTIL AND UNLESS THE CUSTOMER AC QUIRES CERTAIN SKILL/ KNOWLEDGE/ INTELLECT WHICH CAN BE FURTHER USED BY H IM FOR ITS OWN PURPOSE/RESEARCH. HENCE, THE PAYMENT MADE BY THE AP PELLANT FOR AVAILING THE FACILITY OF WASTE COLLECTION AND DISPOSAL PROVI DED BY M/S HOSWIN INCINERATOR PRIVATE LIMITED CANNOT BE TERMED AS FE ES FOR TECHNICAL SERVICES. 1.9.1] IT HAS BEEN FURTHER HELD BY SEVERAL BENCHES OF TRIBUNAL ACROSS THE COUNTRY THAT COLLECTION, TRANSPORTATION AND DISPOSA L OF WASTE WOULD BE LIABLE FOR DEDUCTION OF TAX UNDER SECTION 194C OF T HE INCOME-TAX ACT, 1961 AND NOT UNDER SECTION 194J OF THE INCOME-TAX ACT, 1 961. RELEVANT EXTRACTS FROM FEW OF THE THESE JUDICIAL PR ECEDENTS WHICH HAVE ENUNCIATED THE ABOVE-MENTIONED PRINCIPLES ARE REPRO DUCED HEREUNDER FOR YOUR READY REFERENCE: 1.9.2] THE HONBLE ITAT AHMEDABAD BENCH A IN THE CASE OF ITO (TDS), BARODA VS GUJARAT FLUOROCHEMICALS LIMITED [ITA NOS. 1983, 1984, 1985/AHD/2012] HAS CATEGORICALLY LAID DOWN THAT COL LECTION, TRANSPORTATION AND DISPOSAL OF WASTE WOULD BE LIABL E FOR DEDUCTION OF TAX UNDER SECTION 194C OF THE ACT AND NOT UNDER SECTION 194J OF THE ACT. RELEVANT EXTRACT FROM THE SAID JUDGMENT IS REPRODUC ED HEREUNDER FOR YOUR READY REFERENCE: [PAGE NO. 52-61] 8. THESE GROUNDS OF THE REVENUE PERTAINED TO NON D EDUCTION OF TAX AT SOURCE ON PAYMENTS MADE TO M/S. NANDESARI ENVIRONME NT CONTROL LTD. AND GUJARAT ENVIRO PROTECTION & INFRASTRUCTURE LTD. AS PER SECTION 194J OF IT ACT. AN ARRANGEMENT WAS MADE WITH THOSE PARTIES TO LIFT THE MATERIAL AND DISPOSE OF THE WASTE. THE ASSESSEE COMPANY WAS MAKING THE PAYMENTS FOR TREATMENT OF AN AFFLUENT UP TO THE PLA NTS. ACCORDING TO AO SUCH SERVICES OF CARRYING ON THE WASTE TO THE AFFLU ENT PLANT WAS A 'TECHNICAL SERVICE'. ACCORDING TO AO, PAYMENT MADE FOR THE DISPOSAL OF THE ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 15 WASTE WAS A 'PROFESSIONAL SERVICE'; THEREFORE, THE PROVISION OF SECTION 194J WAS APPLIED. 9. WHEN THE MATTER WAS CARRIED BEFORE LEARNED CIT ( A), IT WAS HELD THAT INSTEAD OF PROVISION OF SECTION 194J ONLY THE PROVISION OF SECTION 194C WOULD BE APPLICABLE. RELEVANT PARAGRAPH OF LEARNED CIT (A) IS REPRODUCED BELOW: 'THE REASONS OF THE ACIT(TDS) CIRCLE, BARODA FOR AR RIVING AT THE CONCLUSION THAT THE PROVISIONS OF SECTION 194J OF THE I.T. ACT ARE APPLICABLE IN I RESPECT OF PAYMENTS MADE BY THE APPELLANT COMPANY TO THE NA NDESARI ENVIRONMENT CONTROL LTD. AND M/S GUJARAT ENVIRO PRO TECTION & INFRASTRUCTURE LTD. AS WELL AS ABOVE ENTIRE SUBMISS ION OF THE APPELLANT HAVE BEEN CONSIDERED. IN MY OPINION THE ITO(TDS) CIRCLE, BARODA IS NOT CORRECT IN HOLDING THE VIEW THAT SERVICES RENDERED FOR HANDLIN G AND DISPOSAL OF HAZARDOUS CHEMICAL WASTE MANAGEMENT ARE SERVICES OF TECHNICAL NATURE. THE SCOPE OF WORK OF NANDESARI ENVIRONMENT CONTROL LTD. AND M/S GUJARAT ENVIRO PROTECTION & INFRASTRUCTURE LTD. WAS FOR COL LECTION, TRANSPORTATION AND DISPOSAL OF HAZARDOUS SOLID WASTE FROM GFL, DAH EJ SITE TO GUJARAT ENVIRO PROTECTION & INFRASTRUCTURE LTD., SURAT AS P ER GPCB NORMS. AGAIN THE WORK OF NANDESARI ENVIRONMENT CONTROL LTD. WAS FOR OPERATION AND MAINTENANCE CHARGES AND WAS ALSO BASED ON THE QUANT ITY LIFTED. THE WORK OF THESE TWO COMPANIES WERE OF COLLECTION, TRANSPOR TATION AND DISPOSABLE OF WASTE AND THESE TWO COMPANIES WERE NOT GIVING ANY T ECHNICAL OR MANAGERIAL OR CONSULTANCY SERVICES AS ENVISAGED IN SECTION 194J OF THE I.T. ACT. AS PER THE APPELLANT IN ITS CASE THE WASTE IS ALSO PROCESSED IN ITS OWN FTP PLANT AT FACTORY LOCATION AND THE ABOVE TWO COM PANIES DO NOT HAVE ANY ROLE IN SUCH PROCESS. AS PER THE APPELLANT THES E TWO COMPANIES WERE CARRYING OUT IT ONLY FOR COLLECTION, TRANSPORTATION AND DISPOSAL OF WASTE AND, THEREFORE, SAME ARE COVERED UNDER THE PROVISIO N OF SECTION 194C OF THE I.T. ACT. I AGREE WITH THIS SUBMISSION OF THE A PPELLANT COMPANY AND IN MY OPINION COLLECTION, TRANSPORTATION AND DISPOSAL OF WASTE BY THESE TWO COMPANIES CANNOT BE SAID TO BE IN THE NATURE OF TEC HNICAL, MANAGERIAL OR CONSULTANCY SERVICES AS ENVISAGED IN SECTION 194J OF THE IT ACT. I, THEREFORE, HOLD THAT THE ACIT(TDS) CIRCLE, BARODA I S NOT CORRECT IN HOLDING THE VIEW THAT THE SERVICES RENDERED BY ABOVE TWO CO MPANIES ARE IN TECHNICAL NATURE. I, THEREFORE, DIRECT THE ACIT(TDS ) CIRCLE, BARODA TO WORK OUT THE TAX AT SOURCE ON THE PAYMENTS MADE TO NANDE SARI ENVIRONMENT CONTROL LTD. AND M/S GUJARAT ENVIRO PROTECTION & IN FRASTRUCTURE LTD. AS PER PROVISIONS OF SECTION194C OF THE I.T. ACT AND ALSO TO CHARGE THE INTEREST IN CASE IF REQUIRED ACCORDINGLY. THUS THE GROUNDS OF A PPEAL OF THE APPELLANT RELATED TO THE PAYMENTS MADE BY IT TO ABOVE TWO COM PANIES ARE DECIDED IN ITS FAVOUR.' 10. HAVING HEARD THE SUBMISSION OF BOTH THE SIDES A ND AFTER CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE COLLECTION, TRANSPORTAT ION AND DISPOSAL OF WASTE BY THOSE TWO COMPANIES CAN BE SAID TO BE COVE RED UNDER THE ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 16 PROVISIONS OF SECTION 194C OF IT ACT. THE VIEW TAKEN BY LEARNED CIT (A) IS, THEREFORE, CONFIRMED. WE HAVE BEEN INFORMED THAT TH E PAYEE, I.E., THE ASSESSEE COMPANY HAD ALREADY DEDUCTED THE TAX AS PE R THE PROVISIONS OF SECTION 194C OF IT ACT. HOWEVER, THIS FACT CAN BE VERIFIED BY T HE AO. IN THE RESULT, WE FIND NO FORCE IN THE GROUND OF THE R EVENUE, HENCE DISMISSED. RESULTANTLY, ALL THE APPEALS OF THE REVENUE ARE DIS MISSED. [EMPHASIS SUPPLIED] 1.9.3] THE JUDGMENT OF THE HONBLE ITAT AHMEDABAD B ENCH A IN THE CASE OF GUJARAT FLUOROCHEMICALS AS CITED SUPRA IS SQUARE LY APPLICABLE TO THE FACTS OF THE PRESENT CASE SINCE THE APPELLANT ALSO MADE TO M/S HOSWIN INCINERATOR PRIVATE LIMITED FOR COLLECTION, TRANSPO RTATION AND DISPOSAL OF WASTE AND THEREFORE TDS WAS RIGHTLY DEDUCTED AT THE RATE OF 2% UNDER SECTION 194C OF THE INCOME-TAX ACT, 1961. 1.9.4] THE HONBLE ITAT MUMBAI BENCH C IN THE CAS E OF M/S COIMBATORE INTEGRATED WASTE MANAGEMENT COMPANY PVT. LTD. VS. D CIT-TDS, COIMBATORE [I.T.A. NO. 2710/MUM/2015] VIDE ORDER DA TED 01-03-2018 HAS HELD THAT: [PAGE NO. 62-67] 5..THE ISSUE TO BE DECIDED IS AS TO WHETHER THE WORK CARRIED OUT BY THE ASSESSEE WOULD FALL IN THE CATEGORY OF T ECHNICAL SERVICES AS ENVISAGED BY THE PROVISIONS OF SECTION 9 OF THE ACT. TECHNICAL SERVICES MEAN ANY CONSIDERATION PAID FOR THE RENDERING OF AN Y MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES. IN THE CASE UNDE R CONSIDERATION NO CONSULTANCY WAS PROVIDED BY THE SUB CONTRACTOR. SIM ILARLY IT HAD NOT RENDERED ANY MANAGERIAL SERVICES. THE ASSESSEE HAD ENTERED IN TO AN AGREEMENT WITH THE SUB CONTRACTOR AND THE SUB CONTR ACTOR WAS CARRYING OUT CERTAIN JOBS AS REQUIRED BY CMC. BUT, IT HAD NOT TR ANSFERRED ANY TECHNICAL KNOWLEDGE TO THE ASSESSEE. THUS, THE FIRST PRE-COND ITION OF SERVICES BEING OF TECHNICAL NATURE IS NOT FULFILLED... WE FIND THAT THERE WAS NO DIRECT AND LIVELINK BETWE EN THE PAYMENT AND RECEIPT/USE OF TECHNICAL SERVICES/INFORMATION. IN O UR OPINION THE AR HEAD RIGHTLY ARGUED THAT TECHNICAL SERVICES WOULD NOT IN CLUDE SERVICES PROVIDED BY THE MACHINES. IN THE CASE OF PARSURAMPURIA SYNTH ETIC LTD.(SUPRA), THE TRIBUNAL HAS HELD THAT THERE MIGHT BE USE OF SERVIC ES OF TECHNICALLY QUALIFIED PERSON TO RENDER THE SERVICES, THAT SAME WOULD NOT BRING THE AMOUNT PAID AS FEE FOR TECHNICAL SERVICES WITHIN TH E MEANING OF EXPLANATION 2 TO SECTION 9 (1) (VII)OF THE ACT. ACCORDINGLY, WE HOLD THAT PAYMENT MADE BY THE ASSESSEE TO UEEL FOR EXHIBITING THE WORK CONTRACT WOULD FALL WITHIN THE PROVISIONS OF SECTION 194C OF THE ACT AND NOT UNDER THE SECTION 194 J. EFFECTIVE GROUND OF APPEAL IS DE CIDED IN FAVOUR OF THE ASSESSEE. [EMPHASIS SUPPLIED] ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 17 1.9.5] THE HONBLE ITAT MUMBAI BENCH D IN THE CAS E OF M/S RUBY MACONS LTD VS DCIT, MUMBAI [ITA NO. 4056/MUM/2008] HAS CATEGORICALLY HELD THAT: [PAGE NO. 68-76] 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS AND PERUSED THE RECORD. WE HAVE ALSO CAREFULLY PERUSED THE CASE LAW RELIED UPON BY THE LEARNED COUNSEL, APPEARING ON BEHALF OF THE ASSESSE E. IN THE CASE OF CIT VS BHARTI CELLULAR LTD. (2009) 319 ITR 139 (DEL) THE H ONBLE DELHI HIGH COURT OBSERVED THAT THE EXPRESSION TECHNICAL SERVICES H AS TO BE UNDERSTOOD IN THE SENSE IN WHICH IT WAS USED IN EXPLANATION 2 TO SECTION 9 (1) (VII) OF THE ACT AND, BY APPLYING THE RULE OF NOSCITUR A SOCIIS, THE WORD TECHNICAL WOULD TAKE COLOUR FROM THE ADJUNCT WORDS I.E., MAN AGERIAL AND CONSULTANCY, BETWEEN WHICH IT IS SANDWICHED. SINC E THE WORDS MANAGERIAL AND CONSULTANCY INVOLVE A HUMAN ELEM ENT, EVEN THE EXPRESSION TECHNICAL SERVICE HAS TO BE UNDERSTOOD AS A SERVICE WHICH PREDOMINANTLY INVOLVES HUMAN ELEMENT. IN THE SAID C ASE BHARATI CELLULAR LTD. PROVIDES INTERCONNECTION BETWEEN ONE NET WORK TO THE OTHER, WHICH ARE KNOWN AS PORTS AND PAYMENTS MADE BY THE ASSESSEE FO R SUCH INTERCONNECTIONS WERE HELD TO BE NOT INVOLVING ANY SERVICES RENDERED BY A HUMAN AND THUS IT CANNOT BE CONSIDERED AS A TECHNI CAL SERVICES AS CONTEMPLATED UNDER SECTION 194J OF THE ACT. 12. IN THE CASE OF SKYCELL COMMUNICATIONS LTD. VS. DCIT (SUPRA) THE HONBLE MADRAS HIGH COURT ANALYSED THE PROVISIONS O F THE ACT TO HOLD THAT MERE COLLECTION OF A FEE FOR USE OF A STANDARD FACI LITY PROVIDED TO ALL THOSE WILLING TO PAY FOR IT DOES NOT AMOUNT TO FEE FOR TE CHNICAL SERVICES. VSAT CHARGES, LEASED LINE CHARGES, BOLT CHARGES, DEMAT C HARGES ETC., PAID TO STOCK EXCHANGE WERE ALSO HELD TO BE NOT PREDOMINANT LY REQUIRING HUMAN SERVICES BUT ONLY FEES COLLECTED FOR USE OF A STAND ARD FACILITY. 13. IN THE CASE OF JAIPUR VIDYUT VITRAN NIGAM LTD. VS. DCIT (SUPRA) THE QUESTION FOR CONSIDERATION WAS AS TO WHETHER PAYMEN TS FOR TRANSMISSION, WHEELING AND SLDC CHARGES TO ELECTRICITY TRANSMISSI ON COMPANY WOULD FALL WITHIN THE MEANING OF THE EXPRESSION TECHNICAL SER VICES. THE BENCH OBSERVED THAT AS PER THE AGREEMENT THERE WAS OPEN A CCESS TO ALL USERS WITH REGARD TO TRANSMISSION LINES. MERELY BECAUSE O PERATION AND MAINTENANCE OF TRANSMISSION LINES AND MAINTAINING I TS GRID STATION WAS WITH THE HELP OF CERTAIN WORK FORCE, IT CANNOT BE C ONSIDERED THAT THEY WERE RENDERING ANY TECHNICAL SERVICES TO THE ASSESSEE SI NCE THEY CAN BE SAID TO BE SIMPLY DISCHARGING THEIR FUNCTION OF OPERATING A ND MAINTAINING ITS GRID STATION AND TRANSMISSION LINES. ANALYSING SECTION 1 94J OF THE ACT, THE BENCH FURTHER NOTICED THAT ONLY WHEN THE TECHNOLOGY OR TECHNICAL KNOWLEDGE OF A PERSON IS MADE AVAILABLE TO OTHERS I T CAN FALL WITHIN THE EXPRESSION TECHNICAL SERVICE AND MERE PERMISSION TO USE TECHNOLOGY WOULD NOT ATTRACT PROVISIONS OF SECTION 194J OF THE ACT. ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 18 14. WE MAY TURN TO THE FACTS OF THE CASE ON HAND SO AS TO APPRECIATE AS TO WHETHER THE SERVICES RENDERED BY VWEMCL INVOLVES HU MAN INTERFACE OR WAS IT MERELY A STANDARD FACILITY PROVIDED TO ALL T HE MEMBERS WHO WERE JOINTLY INVOLVED IN SETTING UP AFFLUENT TREATMENT P LANT. IT IS NOT IN DISPUTE THAT THE RATE IS FIXED DEPENDING ON THE ACTUAL WATE R CONSUMED BY MEMBER UNIT AND ALSO BASED ON DISCHARGE QUALITY NORMS. IT IS ALSO NOT IN DISPUTE THAT AMOUNT COLLECTED IS ON NO PROFIT NO LOSS BASIS AND IF ANY EXCESS AMOUNT IS COLLECTED IT IS PASSED ON TO MEMBERS BY W AY OF DISCOUNT. THIS WAS ACCEPTED BY THE ASSESSING OFFICER WHILE MAKING AN ASSESSMENT UNDER SECTION 143 (3) OF THE ACT IN THE CASE OF VWEMCL. S UCH BEING THE CASE IT HAS TO BE CONSIDERED AS A STANDARD FACILITY AVAILAB LE TO EACH MEMBER/INDUSTRIAL UNDERTAKING ; VWEMCL IS RUNNING A TREATMENT PLANT PROVIDING A STANDARD FACILITY AND IF ANY WORK FORCE IS INVOLVED IN MAINTAINING THE STANDARD FACILITY IT CANNOT BE SAID THAT A SPECIAL SKILL/ KNOWLEDGE WAS PASSED ON BY INDIVIDUALS TO THE ASSES SEE IN LIEU OF A SPECIFIC FEE COLLECTED. SUCH BEING THE CASE, WE ARE OF THE CONSIDERED OPINION THAT IT CANNOT BE CONSIDERED AS A PAYMENT IN THE FO RM OF FEE FOR TECHNICAL SERVICES. IN THE CASE OF RECIPIENT COMPANY THE ASS ESSING OFFICER ACCEPTED THAT CHARGES WERE RECOVERED FROM THE MEMBER UNITS B Y ADOPTING MUTUALITY CONCEPT. [EMPHASIS SUPPLIED] 1.10] IN VIEW OF THE ABOVE DISCUSSION AND FINDINGS REITERATED IN THE JUDICIAL PRECEDENTS CITED SUPRA, IT CLEARLY TRANSPIRES THAT PAYMENT MADE FOR COLLECTION, TRANSPORTATION AND DISPOSAL OF WASTE WO ULD BE LIABLE FOR DEDUCTION OF TAX AT THE RATE OF 2% UNDER SECTION 19 4C OF THE INCOME-TAX ACT, 1961 AND NOT AT THE RATE OF 10% UNDER SECTION 194J OF THE INCOME-TAX ACT, 1961. IN THE FACTS OF THE PRESENT CASE, THE AP PELLANT RIGHTLY DEDUCTED TDS AT THE RATE OF 2% UNDER SECTION 194C OF THE INC OME-TAX ACT, 1961 ON THE PAYMENTS MADE TO M/S HOSWIN INCINERATOR PRIVATE LIMITED FOR COLLECTION AND DISPOSAL OF WASTE. HENCE, BORROWING THE RATIO LAID DOWN BY THE JUDICIAL PRECEDENTS CITED SUPRA, IT IS HUMBLY S UBMITTED THAT DEMAND AS CREATED ON ACCOUNT OF SHORT-DEDUCTION OF TAX OF RS. 6,948/- AND INTEREST ON SUCH SHORT-DEDUCTION OF TAX OF RS. 2,073/- WAS NEIT HER LEGAL NOR PROPER AND REQUIRES TO BE DELETED IN ENTIRETY. 7. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE (DR) OPPOSED THESE SUBMISSIONS AND SUPPORTED THE ORDER O F THE AUTHORITIES BELOW. 8. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASE OF THE ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 19 ASSESSEE IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL RENDERED IN THE CASE OF ITO VS. GUJARAT FLUORO CHEMICALS LIMITED (ITANO.1983,1984,1985/AHD/2012) DATED 31.10.2013. LD. COUNSEL ALSO PLACED RELIANCE THE JU DGMENT OF HON'BLE SUPREME COURT RENDERED IN THE CASE OF CIT VS. KOTAK SECURITY LTD. 340 ITR 333(SC) . FURTHER RELIANCE WAS PLACED ON THE DECISION OF THE DELHI BENCH OF THIS TRIBUNAL RENDER ED IN THE CASE OF ITO, ROHTAK VS. AKON ELECTRONICS INDIA (P.) LTD. ( 2018) 97 TAXMANN.COM 176(DELHI-TRIB.) 9. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) DISMISSED THE A PPEAL BY OBSERVING AS UNDER: GROUND NO.1 & 3: BOTH THE GROUNDS OF APPEAL HAVE B EEN RAISED AGAINST RAISING THE TAX LIABILITY OF RS.6,948/- ON ACCOUNT OF SHORT DEDUCTION OF TAXES U/S 201(1) OF THE INCOME TAX ACT ,1961. THE AO HAS DISCUSSED THE ISSUE AT PARA NOS.3 TO 3.6 OF THE ASSESSMENT ORDER. IT HAS BEEN OBSERVED BY THE AO TH AT THE APPELLANT HAD ENTERED INTO A CONTRACT WITH M/S HOSW IN INCINERATOR PVT. LTD. FOR RENDERING TECHNICAL SERVI CES WHICH SHOULD HAVE BEEN CONSIDERED AS TECHNICAL CONSULTANC Y ON WHICH SECTION 194J OF THE INCOME TAX ACT,1961 SHOULD HAVE APPLIED. THE APPELLANT, BY VIRTUE OF ABOVE SECTION WAS LIABL E TO DEDUCT THE TAXES @ 10% WHEREAS THE SAME HAS BEEN DEDUCTED @ 2% IN ACCORDANCE WITH SECTION 194C OF THE INCOME TAX ACT, 1961. FURTHER, THE AO AT PARA NO.3.3 AND 3.4 HAS GIVEN TH E DETAILED FINDING TO PROVE THAT THE SERVICE RENDERED BY M/S H OSWIN INCINERATOR PVT. LTD. WAS WITHIN THE PURVIEW OF TEC HNICAL SERVICES. THE APPELLANT DURING THE COURSE OF APPEAL PROCEEDINGS HAS FILED THE WRITTEN SUBMISSION WHICH IS REPRODUCE D ABOVE. IT IS EVIDENT FROM THE WRITTEN SUBMISSONS THAT THE APP ELLANT HAS FAILED TO CONTROVERT THE FINDINGS OF AO GIVEN AT PA RA NOS.3.3 & 3.4 OF THE ASSESSMENT ORDER. THEREFORE, THE AO HAS BEEN FOUND ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 20 JUSTIFIED IN ASSESSING THE SHORT DEDUCTION OF RS.6, 948/-. THE SAME IS HEREBY CONFIRMED. BOTH THE GROUNDS OF APPEA L ARE DISMISSED. 4. GROUND NO.3: THIS GROUND OF APPEAL HAS BEEN RAIS ED AGAINST THE ADDITION OF RS.2,073/- ON ACCOUNT OF CHARGING I NTEREST U/S 201(1A) OF THE INCOME TAX ACT 1961. THE AO HAS DISC USSED THE ISSUE AT PARA NO.4 OF THE ASSESSMENT ORDER. THE SHO RT DEDUCTION OF TAXES AS WORKED OUT BY THE AO HAS BEEN CONFIRMED WHILE ADJUDICATING THE GROUNDS NOS.1 & 2. THEREFORE, THE INTEREST, BEING MANDATORY ON THE SHORT DEDUCTION, THE APPELLA NT IS LIABLE TO PAY. THEREFORE, THE ACTION OF THE AO IN CHARGING THE INTEREST OF RS.2,073/- IS HEREBY CONFIRMED. THIS GROUND OF APPE AL IS DISMISSED. 10. IT IS NOTEWORTHY THAT THE DEDUCTEE COMPANY HAS RENDERED SERVICES OF LIFTING MATERIAL AND DISPOSAL OF HOSPIT AL WASTE FROM THE PREMISES OF THE ASSESSEE. NOW QUESTION IS WHETHER L IFTING MATERIAL AND DISPOSAL OF HOSPITAL WASTE WOULD FALL WITHIN TH E DEFINITION OF TECHNICAL SERVICES. THE COORDINATE BENCH OF THIS TR IBUNAL IN THE CASE OF ITO VS. GUJARAT FLUOROCHEMICALS LIMITED (SUPRA) HAS HELD AS UNDER: 8. THESE GROUNDS OF THE REVENUE PERTAINED TO NON D EDUCTION OF TAX AT SOURCE ON PAYMENTS MADE TO M/S. NANDESARI ENVIRONMENT CONTROL LTD. AND GUJARAT ENVIRO PROTECT ION & INFRASTRUCTURE LTD. AS PER SECTION 194J OF IT ACT. AN ARRANGEMENT WAS MADE WITH THOSE PARTIES TO LIFT THE MATERIAL AND DISPOSE OF THE WASTE. THE ASSESSEE COMPANY WAS MAKING THE PAYMENTS FOR TREATMENT OF AN AFFLUENT UP TO THE PLANTS. ACCORDING TO AO SUCH SERVICES OF CARRYING ON THE WA STE TO THE AFFLUENT PLANT WAS A 'TECHNICAL SERVICE'. ACCORDING TO AO, ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 21 PAYMENT MADE FOR THE DISPOSAL OF THE WASTE WAS A 'P ROFESSIONAL SERVICE'; THEREFORE, THE PROVISION OF SECTION 194J WAS APPLIED. 9. WHEN THE MATTER WAS CARRIED BEFORE LEARNED CIT(A ), IT WAS HELD THAT INSTEAD OF PROVISION OF SECTION 194J ONLY THE PROVISION OF SECTION 194C WOULD BE APPLICABLE. RELEVANT PARAGRAPH OF LEARNED CIT(A) IS REPRODUCED BELOW: 'THE REASONS OF THE ACIT(TDS) CIRCLE, BARODA FOR AR RIVING AT THE CONCLUSION THAT THE PROVISIONS OF SECTION 194J OF THE I.T. ACT ARE APPLICABLE IN I RESPECT OF PAYMENTS MADE BY THE APP ELLANT COMPANY TO THE NANDESARI ENVIRONMENT CONTROL LTD. A ND M/S GUJARAT ENVIRO PROTECTION & INFRASTRUCTURE LTD. AS WELL AS ABOVE ENTIRE SUBMISSION OF THE APPELLANT HAVE BEEN CONSID ERED. IN MY OPINION THE ITO(TDS) CIRCLE, BARODA IS NOT CORRECT IN HOLDING THE VIEW THAT SERVICES RENDERED FOR HANDLING AND DISPOS AL OF HAZARDOUS CHEMICAL WASTE MANAGEMENT ARE SERVICES OF TECHNICAL NATURE. THE SCOPE OF WORK OF NANDESARI EN VIRONMENT CONTROL LTD. AND M/S GUJARAT ENVIRO PROTECTION & IN FRASTRUCTURE LTD. WAS FOR COLLECTION, TRANSPORTATION AND DISPOSA L OF HAZARDOUS SOLID WASTE FROM GFL, DAHEJ SITE TO GUJAR AT ENVIRO PROTECTION & INFRASTRUCTURE LTD., SURAT AS PER GPCB NORMS. AGAIN THE WORK OF NANDESARI ENVIRONMENT CONTROL LTD. WAS FOR OPERATION AND MAINTENANCE CHARGES AND WAS ALSO BASE D ON THE QUANTITY LIFTED. THE WORK OF THESE TWO COMPANIES WE RE OF COLLECTION, TRANSPORTATION AND DISPOSABLE OF WASTE AND THESE TWO COMPANIES WERE ITA NO.1956, 1957, 1958, 1983, 1 984, 1985/AHD/2012 GUJARAT FLUROCHEMICALS LTD. BARODA. FOR A.YS. 2008-09, 2009-10, 2010-11 NOT GIVING ANY TECHNICAL OR MANAGERIAL OR CONSULTANCY SERVICES AS ENVISAGED IN SECTION 194J OF THE I.T. ACT. AS PER THE APPELLANT IN ITS CASE THE WASTE IS ALSO PROCESSED IN ITS OWN FTP PLANT AT FACTORY LOCA TION AND THE ABOVE TWO COMPANIES DO NOT HAVE ANY ROLE IN SUCH PR OCESS. AS PER THE APPELLANT THESE TWO COMPANIES WERE CARRYING OUT IT ONLY FOR COLLECTION, TRANSPORTATION AND DISPOSAL OF WAST E AND, THEREFORE, SAME ARE COVERED UNDER THE PROVISION OF SECTION 194C OF THE I.T. ACT. I AGREE WITH THIS SUBMISSION OF T HE APPELLANT COMPANY AND IN MY OPINION COLLECTION, TRA NSPORTATION ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 22 AND DISPOSAL OF WASTE BY THESE TWO COMPANIES CANNOT BE SAID TO BE IN THE NATURE OF TECHNICAL, MANAGERIAL OR CON SULTANCY SERVICES AS ENVISAGED IN SECTION 194J OF THE IT ACT. I, THEREFORE, HOLD THAT THE ACIT(TDS) CIRCLE, BARODA IS NOT CORRE CT IN HOLDING THE VIEW THAT THE SERVICES RENDERED BY ABOVE TWO CO MPANIES ARE IN TECHNICAL NATURE. I, THEREFORE, DIRECT THE ACIT( TDS) CIRCLE, BARODA TO WORK OUT THE TAX AT SOURCE ON THE PAYMENT S MADE TO NANDESARI ENVIRONMENT CONTROL LTD. AND M/S GUJARAT ENVIRO PROTECTION & INFRASTRUCTURE LTD. AS PER PROVISIONS OF SECTION194C OF THE I.T. ACT AND ALSO TO CHARGE THE INTEREST IN CASE IF REQUIRED ACCORDINGLY. THUS THE GROUNDS OF APPEAL OF THE APPE LLANT RELATED TO THE PAYMENTS MADE BY IT TO ABOVE TWO COMPANIES A RE DECIDED IN ITS FAVOUR.' 10. HAVING HEARD THE SUBMISSION OF BOTH THE SIDES A ND AFTER CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE COL LECTION, TRANSPORTATION AND DISPOSAL OF WASTE BY THOSE TWO C OMPANIES CAN BE SAID TO BE COVERED UNDER THE PROVISIONS OF SECTION 194C OF IT ACT. THE VIEW TAKEN BY LEARNED CIT(A) IS, TH EREFORE, CONFIRMED. WE HAVE BEEN INFORMED THAT THE PAYEE, I. E., THE ASSESSEE COMPANY HAD ALREADY DEDUCTED THE TAX AS PE R THE PROVISIONS OF SECTION 194C OF IT ACT. HOWEVER, THIS FACT CAN BE VERIFIED BY THE AO. IN THE RESULT, WE FIND NO FORCE IN THE GROUND OF THE REVENUE, HENCE DISMISSED. RESULTANTLY, ALL T HE APPEALS OF THE REVENUE ARE DISMISSED. 11. THE FACTS ARE IDENTICAL AS WERE IN THE CASE OF ITO VS. GUJARAT FLUORO CHEMICALS LIMITED (SUPRA) . WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF T HIS TRIBUNAL HOLD THAT THE SERVICES PROVIDED BY THE DEDUCTOR WOULD NO T FALL IN THE CATEGORY OF TECHNICAL SERVICES, THEREFORE, THE ASSE SSEE HAS RIGHTLY DEDUCTED TAX U/S 194C OF THE ACT. NOW COMING TO GRO UND NOS.2 & 3 ARIHAND CHARITABLE TRUST INDORE /ITANO.90 9/2019 23 OF THIS APPEAL AS WE HAVE DECIDED THE ISSUE OF DEDU CTION OF TAX U/S 194C OF THE ACT IN FAVOUR OF THE ASSESSEE, THEREFOR E, GROUND NO.2 & 3 OF THE ASSESSEE ARE ALLOWED. THE AO IS HEREBY DIR ECTED TO DELETE THE IMPUGNED ADDITIONS. 12. IN RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31.08.20 20. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIAL MEMBER INDORE; DATED : 31/08/2020 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE