AJAY KUMAR MITTAL, J. - (1.) THIS order shall dispose of a bunch of six appeals bearing IT Appeal Nos. 590 and 591 of 2006, 940 and 941 of 2008, 5 and 129 of 2009 as learned counsel for the parties are agreed that identical proposition of law is involved in all the appeals. For brevity, the facts are being extracted from IT Appeal No. 940 of 2008.
(2.) THIS appeal has been preferred by the Revenue under S. 260A of the IT Act, 1961 (in short "the Act") against the order dt. 28th Feb., 2007 passed by the Income-tax Appellate Tribunal, Chandigarh Bench "B" (hereinafter referred to as "the Tribunal") in ITA No. 229/Chd/2006, relating to the asst. yr. 2004-05, claiming the following substantial question of law : "Whether on the facts and circumstances of the case and in law, the Hon'ble Tribunal was justified in holding that the facility provided by PNB, MICR Cheque Processing Centre, cannot be considered as a 'technical service' for the purpose of S. 194J of the IT Act, 1961 ?" Briefly stated, the facts necessary for adjudication as narrated in the appeal are that during the TDS inspection of the SBI, service branch, Chandigarh, the AO found that the bank was not deducting tax at source from the payments made to PNB, MICR Cheque Processing Centre, Chandigarh. The assessee claimed as the service rendered by the PNB, MICR Cheque Processing Centre was not a 'technical service', therefore, S. 194J of the Act was not applicable. Further, it was submitted that mere collection of a fee for use of a standard facility provided to all those willing to pay for it, does not amount to be the fee having been received for technical services. According to the assessee, as per Explanation to S. 191 of the Act, the SBI branch was not in default because the PNB, MICR Cheque Processing Centre had considered the receipt of the subject processing charges as their income and paid the tax on the same to the Department and, thus, there was no loss of revenue. The AO vide order dt. 5th Sept., 2005 treated the Chief Manager, SBI, service branch as an assessee in default and raised the demands under S. 194J r/w S. 201(1) and 201(1A) of the Act. Feeling aggrieved, the assessee filed an appeal before the CIT(A). The CIT(A) vide order dt. 30th Jan., 2006 held that the provisions of S. 194J of the Act were not applicable as the service for cheque processing provided by the PNB, MICR Cheque Processing Centre could not be treated as 'technical service'. The Department feeling dissatisfied approached the Tribunal by way of an appeal who vide order dt. 28th Feb., 2007 upheld the order of the CIT(A) and dismissed the appeal. Hence, the present appeal by the Department.
(3.) THE issue that arises for consideration in these appeals is whether the processing charges which were paid by the assessee to PNB MICR Centre for clearing of cheques by using standard facility provided by the PNB MICR Centre to all its customer-banks would fall within the definition of "technical service" and the payments made for the same were covered under S. 194J of the Act.;