Bombay Integrated Security (India) Limited Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai Bench has remanded a case involving Bombay Integrated Security (India) Limited back to the Assessing Officer (AO) for fresh adjudication. The appeal concerned a demand of Rs. 4,08,000/- for alleged non-deduction of Tax Deducted at Source (TDS) under Section 194J of the Income Tax Act, 1961, on payments made for charter plane services, along with consequential interest.
The case originated from a tax audit report for the financial year 2021-22, which flagged a TDS default. The AO subsequently issued a show cause notice regarding a payment of Rs. 40,80,000/- made on December 12, 2021. Due to a lack of response from the assessee, the AO proceeded to determine a TDS liability of Rs. 4,08,000/- (10% of the payment), classifying the payment as subject to TDS under Section 194J, which pertains to fees for professional or technical services. Additionally, interest of Rs. 2,20,320/- was levied under Section 201(1A), culminating in a total demand of Rs. 6,28,320/- via an order issued on December 30, 2024.
Bombay Integrated Security (India) Limited appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], arguing that the payment was for hiring charter plane services from Velocity Charter Private Limited for personnel travel and did not constitute professional or technical services. The assessee cited Explanation (b) to Section 194J read with Explanation 2 to Clause (vii) of Sub-section (1) of Section 9 of the Act to support its claim.
