Case Law Details
Government Polytechnic Education Society Vs ITO (TDS) (ITAT Delhi)
Aassessment order dated 02.02.2021 passed by the Assessing Officer (AO) under Section 201(1)/201(1A) for alleged default towards non deduction of TDS from payments made to Guest faculties with reference to Section 194J of the Income Tax Act, 1961 (the Act) concerning AY 2017-18.
It is the case of the assessee that while the remuneration paid to the regular faculty staff is drawn from salary head and therefore, shown under the head ‘salary’ for accounting purposes, the remuneration paid to Guest Faculty is drawn from contingency/wages head in the light of the order of the Government of Haryana and thus shown under the head ‘Professional and Special Services’ in its income and expenditure account. However, the Guest Faculties are rendering the identical services and relationship between the management and the teaching faculties involve an obligation to obey orders and the work to be supervised and consequently the said relationship could not be called ‘contract for services’ since the teaching staff does not render any professional or technical service. The monthly remuneration paid to the Guest Faculties are in the nature of ‘contract of service’ between the assessee deductor and its teaching staff appointed on adhoc basis and such adhoc salary paid to them being below taxable limit on individual basis, does not warrant deduction of tax at source and as such non deduction of tax at source does not trigger default under Section 201(1)/201A) of the Act.
FULL TEXT OF THE ORDER OF ITAT DELHI
The captioned appeal has been filed by the Assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [‘CIT(A)’ in short] dated 29.10.2021 arising from the assessment order dated 02.02.2021 passed by the Assessing Officer (AO) under Section 201(1)/201(1A) for alleged default towards non deduction of TDS from payments made to Guest faculties with reference to Section 194J of the Income Tax Act, 1961 (the Act) concerning AY 2017-18.
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