Gujarat Sickle Cell Anemia Control Society vs. Dy. Commissioner of Income Tax, TDS Circle - (Income Tax Appellate Tribunal) (18 Apr 2022)

Payments to Medical Labs & Technicians engaged under Govt Programme subject to TDS

MANU/IB/0182/2022

Direct Taxation

The assessee is a society under the control of Commissioner of Health, Gandhinagar and entered into agreement with different entities for the purpose of carrying out screening (i.e. DTT test, HPLC test etc.) of Sickle Cell Anemia in tribal district of Gujarat. The Assessee has deducted TDS on the payments these entities @2% or at lower rate of 1% under Section194C of Income Tax Act, 1961. The notice was issued to assessee on the rate of TDs deducted. The AO observed that the function performed by these entities fall under the purview of professional services/managerial and consultancy services as per Section 194J of the Act and therefore liability of the deduction of tax arises @ 10% u/s 194J of Act instead of u/s 194C.

Against the said order, assessee preferred first statutory appeal before the learned CIT(A) who partly allowed the appeal of the assessee. Hence, the Assessee has approached present Tribunal. The issue before Tribunal is that whether assessee is liable to deduct tax under s.194J of the Act or Section 194C of the Act.

The court observed that it is apparent and clear from the terms of the agreement that technical persons carried out tests and Laboratory Technician will be with minimum qualification of MLT/DMLT with science graduate while paramedical worker will be with minimum qualification of SI. It is clear that aforesaid services come within Section 194J and 194C of the Act. Therefore, there is no ambiguity in the order passed by CIT(A) and same does not required to be interfered.

Tags : TDS LAB TECHNICIAN