The Income Tax Appellate Tribunal (ITAT), Jaipur has held that the salary paid to teachers, lectures and staff by the college would not amount to the fee for technical services and the same is subject to TDS under Section 192 of the Income Tax Act.
The assessee runs a college under the name and style of Sri Sathya Sai P.G. College for Women. During the Assessment Years under consideration, the assessee paid salary to its employees who are teaching thereon which assessee deducted the tax at source under section 192 of the Act. During the course of assessment, the Assessing Officer held that the employees to whom assessee paid salary are not having an employer-employee relationship between the college teachers/lecturers/ staff. It was, therefore, held that the assessee is liable to deduct tax at source under section 194J of the Act in place of 192 of the Income Tax Act, 1961.
The Tribunal noted that the month-wise salary sheet was also prepared by the college on the basis of the attendance register of the employees. The salary was paid to the employees and due taxes are being deducted u/s 192 of the I.T. Act, 1961.
“From the record, I found that the assessee is running a college for women under a registered society in the name ‘’Sri Sathya Sai College for Women’’ at Jawahar Nagar, Jaipur. The assessee has appointed teachers/ lecturers and staff for full-time employment as per terms of the appointment letter issued by the college. The assessee is paying monthly fixed salary as per the terms of employment of service. The appointment is made under an employer-employee relationship between the college and the teachers/lecturers/ staff. I also found that the college authorities have full control over the teachers/ lecturers/ staff as per their working hours and working days fixed by the employer and they were also supposed to do other work related to the college activities as and when required. Since there were employee and employer relationship between the college teachers/lecturers/staff, therefore, tax on the salary paid to them was correctly deductible u/s 192 of the Act. I also found that in order to establish employee and employer relationship between the college teachers/lecturers/staff, the assessee also produced salary registers and appointment letters before the lower authorities,” the Tribunal said.
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