By Puloma Dalal, Jayesh Gogri, Mandar Telang, Chartered Accountants
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Whether TDS is to be deducted u/s. 194J of the Income Tax Act on service tax applicable on fees to be paid to consultants? Held, No.
Facts:
The Appellant preferred an appeal against the order of ITAT confirming first appellate authority’s order which held that TDS u/s. 194J of the Income Tax Act, 1961 (I T Act) would not be applicable on service tax component paid separately in respect of professional fees. They further argued that the ITAT had illegally relied on the CBDT Circular dated 28-04-2008 while deciding the present appeal.
Held:
Referring to section 194J of the I. T. Act and the Circular dated 28-04-2008, the Hon. High Court held that section 194J of the I. T. Act used the words “Any sum paid” which related to the fees for professional or technical fees and would not include the service tax which was to be paid separately. As per the terms of the agreement, service tax was to be paid separately and was not included in the fees payable. Since the ITAT and lower authority had considered the wordings of section 194J of the I. T. Act while deciding the appeal, even if the Circular dated 28-04-2008 was held to be not applicable in the present case, then also the order passed was in accordance with the law and needed no intervention. Further, since no substantial question of law was involved, the appeal was dismissed.
