The Commissioner Of Income Tax, Tds-2, Mumbai v. M/S. Reliance Life Insurance Co Ltd

(Private Secretary) IN THE HIGH COURT OF JUDICATURE ATBOMBAYO.O.C.J. INCOME TAX APPEAL NO. 500 OF 2017 The Commissioner of Income Tax, TDS-2, Mumbai..Appellant Versus M/s. Reliance Life Insurance Co Ltd..Respondent ................... Mr. P.C. Chhotaray for the Appellant Mr. P.C. Chhotaray for the Appellant Mr. B.G. Yewale i/by M/s. Rajesh Shah & Co for theRespondentMr. B.G. Yewale i/by M/s. Rajesh Shah & Co for theRespondent ................... CORAM : AKIL KURESHI & S.J. KATHAWALLA, JJ. DATE : JUNE 18, 2019. P.C.: 1.Revenue is in the appeal against the judgment ofthe Income Tax Appellate Tribunal, Mumbai ("the Tribunal" for short) dated 22.6.2016. 2.Following question is presented for our consideration:- "Whether on the facts and in the circumstances of the caseand in law, the Tribunal was justified in holding that tax wasdeductible from payment of outsourcing expenses such asprocessing charges and business services etc. under Section194C instead of Section 194J of the Income Tax Act, 1961 without appreciating that the nature of services received bythe assessee requires certain parameters of technical /managerial skill of highly specialized competency and fallswithin the purview of Section 194J of the Act and not 194C ofthe Act?" 3.Learned counsel for the parties pointed out thatsimilar issue came up for consideration in Income TaxAppeal No. 604 of 2017 and connected appealsconcerning this very assessee. The Court consideredthe issue in following manner:- 2. Question Nos.a to c relate to the requirement ofdeduction of tax at source by the respondent whether thesame was correctly deducted. Each question relates to adifferent payment and we shall therefore examine eachquestion separately. 3.Respondent–assessee is an Insurance Company.Question Nos. a and b pertain to a deduction of tax at sourceon the payment of outsourcing expenses. The assessee haddeducted tax under Section 194C of the Act. The revenueargues that the same ought to have been under Section 194Jof the Act since payments were for managerial and technicalservices. 4.The CIT (Appeals) and the Tribunal examined thenature of expenditure and came to the conclusion that theassessee had hired the services for various works such asstorage of data, scanning of documents, processing charges, call centre operations etc. Looking to the nature of servicesoutsourced, it was held that the same were basically clericalservices of repetitive nature of work and payments weretherefore, neither for managerial nor for technical services.Having perused the documents on record and looking to thenature of services described, we do not find that the Tribunalhas committed any error. The work outsourced was in thenature of clerical work. No question of law arises. 5.In so far as question No.c is concerned, the samepertains to the charges of the event management paid by theassessee. In this context, the CIT (Appeals) and the Tribunalnoted that the assessee had arranged conference at Agra.The payments were essentially for domestic ticketing,reimbursing hotel expenses, tour leaders’ expenses. Suchservices were essentially in the nature of travel agent whohad arranged the ticket booking and hotel facilities. TheTribunal therefore held that payments were not for anytechnical services availed by the assessee. No question oflaw arises." 4.In the result, the appeal is dismissed. [ S.J. KATHAWALLA, J. ] [ AKIL KURESHI, J ]