Payment made to agencies conducting test of Sickle Cell Anemia is liable for Sec. 194J TDS: ITAT

Case Details: Gujarat Sickle Cell Anemia Control Society v. DCIT - [2022] 141 taxmann.com 6 (Ahmedabad-Trib.)

Judiciary and Counsel Details

• • Mahavir Prasad, Judicial Member & Waseem Ahmed, Accountant Member
  • Rupesh R. Shah, A.R. for the Appellant.
  • Purushottam Kumar, Sr. DR for the Respondent.

Facts of the Case

Assessee, a society under the control of the Commissioner of Health, Gandhinagar, entered into an agreement with various agencies for purpose of carrying out DTT test, HPLC test, etc. of Sickle Cell Anemia in the tribal district of Gujarat.

It deducted tax at source on payments made to these agencies under section 194C. Assessing Officer (AO) held that services carried out by agencies would fall under the purview of professional services/managerial and consultancy services as per section 194J. Therefore, the liability of deduction of tax arose at the rate of 10 percent under section 194J instead of section 194C.

Against the said order, the assessee preferred first statutory appeal before the learned CIT(A) who upheld the order of AO. Aggrieved-assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that AO concluded based on the scope of the agreement that the services carried out by the agencies are professional services. The services include conducting different medical tests i.e. DTT, HPLC, etc. for Sickle Cell Anemia on the target population, tagging the population as per the tests performed, making a database of such tests & their results, and making all data available to society.

The screening test was conducted as per the guideline of the Government of Gujarat in this regard. The tests conducted by the personnel of the agencies in the field can be performed by medically qualified personnel and their report is submitted to society after approval of the local Medical Officer.

It is apparent from the terms of the agreement that technical persons carrying out tests and Laboratory technicians will be with minimum qualification of MLT/DMLT with science graduate while paramedical workers will be with minimum qualification of SI. Accordingly, the services come within sections 194J and 194C and TDS was to be deducted under section 194J.

List of Cases Referred to

• • Arihant Charitable Trust v. ITO [IT Appeal No. 909 (Ind.) of 2019, dated 31-8-2020] (para 9).