J.K.RANKA,J. - (1.) Instant Income-tax appeal under section 260A of the Income-tax Act, 1961 (for short "Act"), is directed against the order dated February 13, 2015, passed by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (for short, "Tribunal"), and is relevant for the assessment year 2009-10.
(2.) Brief facts relevant for disposal of the appeal are that the respondent is a private limited company promoted by the Government of Rajasthan. Maharashtra Knowledge Corporation Limited (MKCL), Pune, Rajasthan University, Jaipur, Maharana Pratap University of Agriculture and Technology, Udaipur, Vardhman Mahaveer Open University, Kota, Rajcomp, Jaipur and Centre for E-governance, Jaipur mainly imparting computer education to Government employees and students and other persons in the State of Rajasthan through its business franchisee network, i.e., District lead centres (DLCs), and I.T. Gyan Kendra (ITGK) through its programme support agency (PSA) and is running technical courses namely; RS-CIT, a basic computer literacy course along with other courses like RS-CFA, RS-CEL, RS-CRM and RS-CBFSI. These agencies/centres have been entrusted with imparting computer training and these agencies and centres are being paid for their services/jobs by the respondent-company. According to the Assessing Officer (for short, "AO"), the IT Gyan Kendras collects Rs. 2,300/-, per student for the course and sends the full amount to the respondent-RKCL which in turn after keeping Rs. 850/- with itself, sends back Rs. 1450/- to I.T. Gyan Kendras as their share. Out of this amount of Rs. 850/-, the respondent M/s. RKCL pays Rs. 100/- per student to programme support agencies and Rs. 75/- per student to District lead centres (DLCs (on which the company is deducting tax at source. On verification of the records, it came to the notice of the Assessing Officer (Revenue) that the respondent-RKCL is not deducting tax at source on the amount of Rs. 1,450/- paid to IT Gyan Kendras by it for each student and noticing certain irregularities in non-deduction of tax at source, a show-cause notice was issued and the respondent-RKCL was directed to clarify the situation as to why the tax was not being deducted at source. According to the Assessing Officer, the assessee was liable to deduct tax at source on the said amount.
(3.) The assessee, in response to the show-cause notice, contended that the amount of Rs,. 2,300 collected by the respondent was shared between three stakeholders namely; IT Gyan Kendras, the respondent-RKCL and VMOU in the ratio of Rs. 1,450/-, Rs. 750/- and Rs. 100/- respectively and it was contended that the share of revenue/fee amongst various stakeholders has been adopted just for administrative purpose/convenience to maintain check/control over the aggregate receipt, number of registration, timing of receipt etc., so that all, stake holders who-are collaborative partners receive their respective share correctly and on time along with the entire information about the learner's registration. Accordingly, it was contended that it being in the nature of sharing of the fee, no liability towards tax deduction at source arose. It was also contended by the respondent-assessee that wherever tax was liable to be deducted, it was deducted. However, the Assessing Officer was not satisfied with the explanation so offered and held that the respondent-company was under statutory obligation to deduct tax at source on fee payments and thus held that the respondent-assessee was liable for deduction of tax at source and demand along with interest at Rs. 23,32,708/- was created.;