ARIJIT BANERJEE,J. - (1.) This is an appeal against the order dated 29th August, 2014 passed by the Income Tax Appellate Tribunal 'B' Bench, Kolkata in ITA No.1422/KOL/2012 A.Y. 2010-11. By the said order the Learned Tribunal dismissed the department's appeal against the order dated 16th July, 2012 passed by the Commissioner of Income Tax (Appeals) - I, Kolkata in Appeal No.543/CIT(A) - 1/58(3)/11-12. By the said appellate order, the CIT had allowed the assessee's appeal against an order dated 29th July, 2011 passed by the ITO Wd. - 58(3), Kolkata ITNS - 51 under Sections 201(1)/201(1A) of the Income Tax Act (hereinafter referred as 'the said Act'), whereby the Assessing Officer had held that Section 194J of the said Act applied to the assessee and not Section 194C. Accordingly, the Assessing Officer had held the assessee liable on account of short deduction and interest thereon to the tune of Rs.1,46,36,656/-.
(2.) The brief facts of the case are that the assessee, at all material times, was engaged in the business of media broadcasting and telecasting. It had entered into an Up-linking Service Agreement with one ESSEL Shyam Communication Ltd. (ESCL) for Up-linking and Bandwidth Services as also an Agreement with one Celebrities Management Pvt. Ltd. (CMPL) for Air Time service charges. While making payment to such parties for the services rendered by them, the assessee deducted tax at source in accordance with Section 194C of the said Act. A survey was conducted in the office premises of the assessee company on 20th June, 2011. All documents and records as were called for by the Assessing Officer were supplied by the assessee. Subsequently, the assessment order was passed whereby the Assessing Officer held that the payments made by the assessee to the Multi System Operators on account of channel carriage fees and other payments related to the Up-linking charges and down-linking charges, Bandwidth and Air Time charges are covered by Section 194J of the said Act since such payments were in the nature of fees for professional and technical services. The assessee was held responsible for short deduction and interest thereon. Penalty was also imposed on the assessee under Section 271C and 221(1) of the said Act.
(3.) At this juncture, it would be helpful and profitable to note the relevant provisions of the said Act. Section 194C in so far as the same is material for the present purpose, provides as follows:- "(1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or 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- (i) one per cent. where the payment is being made or credit is being given to an individual or a Hindu undivided family; (ii) two per cent. where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family, of such sum as income-tax on income comprised therein." ;