The Income Tax Appellate Tribunal (ITAT), Jaipur has held that the salary paid to teachers, lectures and staff by the college would not amount to the fee for technical services and the same is subject to TDS under Section 192 of the Income Tax Act.
Facts of the case:
- The assessee is runs a college for women under a registered society in the name ‘’Sri Sathya Sai College for Women’’ at Jawahar Nagar, Jaipur.
- During the Assessment Years under consideration, the assessee paid salary to its employees who are teaching there on which assessee deducted the tax at source under section 192 of the Act.
- During the course of assessment, the Assessing Officer held that the employees to whom assessee paid salary are not having an employer-employee relationship between the college teachers/lecturers/ staff. It was, therefore, held that the assessee is liable to deduct tax at source under section 194J of the Act in place of 192 of the Income Tax Act, 1961.
The ITAT noted that the month-wise salary sheet was also prepared by the college on the basis of the attendance register of the employees. The salary was paid to the employees and due taxes are being deducted u/s 192 of the I.T. Act, 1961.
It was held that the Assessing Officer was not correct in treating the payments made to the teachers on adhoc basis as professional payments as per provisions of section 194J of the Act. The assessee is thus not in default and there is not merit in raising of demand under section 201(1) of the Act and charging of interest under section 201(1A) of the Act.
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