- (1.) THIS appeal by the revenue under Section 260 -A of the Income Tax Act, 1961 arises from an order of the Income Tax Appellate Tribunal at its Lucknow Bench dated 29 November 2013. The assessment year to which the appeal relates is A.Y. 2006 -07.
(2.) THE revenue has framed the following questions of law: "(1) Whether the ITAT erred in law in giving a very restrictive meaning to the terms "fee for professional" and "fee for technical services" when the services provided by the Federation to the assessee are covered under these terms and are also covered U/.194 -J. (2)Whether the ITAT erred in law in concluding that services provided by the Federation to the assessee are not professional or technical services as provided U / s. 194 -J. (3)Whether the ITAT erred in law in concluding that the services provided by the Federation to the assessee are not covered U/s. 194 -J without interpreting the terms professional and technical services as provided U/s. 194 -J. (4)Whether the ITAT was justified in dismissing the Revenue's appeal on account of disallowance rightly made by the Assessing Officer towards the payment of Subscription to Federation U/s. 40(a)(ia) of the I.T. Act at Rs. 48,80,057."
(3.) AT the hearing, the appeal has been pressed only insofar as the first three questions are concerned. The Assessing Officer had made a disallowance under Section 40(a)(ia) on the ground that the assessee had failed to deduct tax at source of Rs.48,80,057/ - which was the subscription to the U.P. Cooperative Cane Federation. The issue was whether, within the meaning of Section 194 -J of the Income Tax Act, 1961, any fees for professional services or for technical services had been paid. The Assessing Officer referred to the objects of the U.P. Cooperative Sugar Federation as being to assist, coordinate, supervise and facilitate the working of Cooperative Sugar Factories and to arrange for the manufacture and supply of sugar machinery to cooperative mills and held that the Federation provides financial advice and other services to the factories from time to time. Each factory pays subscription to the Federation to meet expenses on the basis of production of sugar. The Assessing Officer was of the view that the services which were provided were technical services and, accordingly, made a disallowance on the ground that the tax was not deducted at source. The CIT(A), in appeal, merely recorded the submission of the assessee. After recording the submissions, the only reasoning in the order of the CIT(A) reads as follows: "Looking in to the circumstances of the case, the disallowance on account of subscription to federation which is being paid to the federation not in the course of carrying on any activity by the federation office as per explanation as given in section 194J is deleted." Ex facie, it is clear that there is no independent application of mind by the CIT(A).;