A two-judge bench of the Bombay High Court has held that the subscription fees paid to the cable network operator /MSO /DTH Operators attracts TDS liability under Section 194C of the Income Tax Act.
The Income Tax Appellate Tribunal (ITAT) held that the channel subscription fees paid to cable operators/MSO/DTH Operators, were payments for work contract covered u/s 194C and not fees for technical services u/s 194J.
The bench comprising Justice Akil Kureshi and Justice Sarang V Kotwal was hearing an appeal by the Revenue wherein the order of the ITAT was challenged by contending that the order was passed without appreciating that the services received by assessee are technical in nature.
On appeal, the High Court noticed the fact that the assessee is a Multi System Operator. “While making payment of subscription fees paid to the channels, the assessee would deduct tax at source u/s 194C. The Revenue contended that such deduction should have been in terms of Section 194J. Such an issue had been examined by the Division Bench of Punjab & Haryana High Court in case of Kurukshetra Darpans (P) Ltd. Vs. Commissioner of Income Tax wherein the Court referred to the Explanation (3) below Section 194C(2), explained the term “Work” as to include advertising, broadcasting and telecasting including production of programmes etc. The Court was of the opinion that the deduction made by the payer u/s 194C was correct. This Court is in respectful agreement with the view of the High Court of Punjab and Haryana,” the bench said.
Subscribe Taxscan Premium to view the Judgment
