Case Law Details
Dist. Intermediate Educational Office Vs Income Tax Officer (TDS) (ITAT Hyderabad)
ITAT Hyderabad held that payment to contract teachers doesn’t qualify as ‘fee for professional services’ and accordingly TDS under section 194J of the Income Tax Act not deductible.
Facts- The common question that arises in both these appeals is whether the Honorarium/Remuneration paid to the teachers in the Government colleges is in the nature of fee for professional serves liable to TDS under section 194J of the of the Income Tax Act, 1961 (‘the Act’)?
Conclusion- It is, therefore, clear that while requiring the persons responsible for paying to a resident any ‘fee for professional services’ to deduct the TDS at a specified rate, by way of explanation it is provided that for such purpose, the “professional services” shall mean services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AA or of this section. Learned CIT(A) in the order in ITA No. 32/Hyd/2023 rightly referred to the Notification No. 88/2008 dated 28/01/2008 issued by CBDT notifying ‘such other profession’ in the explanation, as sports persons, umpires and referrers, coaches and trainers, team physicians and physiotherapists, event managers, commentators, anchors and sports columnists. Either in the explanation to section 194J of the Act or in the notification issued thereunder, the contract teachers, referred to as teaching professionals by the learned DR are not covered.
Held that we are of the considered opinion that the payments made to the contract teachers do not answer the description of ‘fee for professional services’ and the impugned order in ITA No. 32/Hyd/2023 does not require any interference. On the same analogy, we find it difficult to sustain the impugned order in ITA No. 726/Hyd/2022 is liable to be reversed. Respective learned Assessing Officers are directed to delete the said additions.
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