ORDER

Per CHANDRA POOJARI, AM:

This appeal filed by the assessee is directed against the order of the CIT(A) , Trivandrum dated and pertains to the assessment year 2010-11.

2. The only issue in this appeal is with regard to determination of short deduction of Rs.8,25,310/- u/s. 201(1) of the Act and the payments made in the instant case do not fall within the ambit of section 194J of the Act, instead section 194C of the Act would be attracted.

2.1 The assessee has filed the following additional ground:

“For that the assessee cannot be treated as an assessee in default where the payees have admitted the income and paid the tax due in their return of income.”

The assessee submitted that failure to raise the additional ground was due to inadvertence and is not intentional. Therefore, he prayed to admit the above additional ground.

2.2 We have heard both the parties. We find that the assessee has sufficient and reasonable cause for failure to raise the additional ground before the Tribunal. Hence, we admit the additional ground.

3. The facts of the case are that a survey was carried out in the business premises of the assessee on 20.07.2010 to verify whether tax had been deducted at source against the payments made to various artists who participated in the reality shows telecast by the assessee. It was found during the course of survey that the assessee had deducted tax at source from the payments made to various artists like singers, musicians etc who participated in the reality shows as guests or judges, at 1% as per the provisions of section 194C of the Act on the ground that these payments were made as per the agreement entered into with the artists for production of the programmes meant for telecast by the assessee. The case of assessee was that its case falls u/s 194C and since it has rightly deducted the tax at 1%, no further action whatsoever can be taken against them. However, the details furnished by the assessee in this regard were scrutinized and further seen that the assessee had made the payments to the artists directly. Finding that no written agreement for executing the contract work to produce a programme for telecast had ever been signed by the parties concerned, the assessing authority came to the conclusion that the payments made cannot be said to be for the work of telecasting or producing a programme for telecasting by the assessee as contemplated under the provisions of section 194C Thus, the assessing authority observed that the payments have been made as remuneration for the service rendered by the artists and therefore could well be defined as payments for providing service which qualify for deduction of tax at source at 10% as per section 194J of the Act.

4. On appeal, the CIT(A) observed that section 194C requires a person responsible for paying any sum to any resident for carrying out any work in pursuance of a contract between the contractor and a specified person to deduct tax at one per cent when the payment is made to an individual or HUF and two percent in all other cases. In terms of clause (iv)(b) of Explanation to section 194C, payment made towards a contract concerning broadcasting and telecasting including production of programmes for such broadcasting or telecasting would be covered by section 194C. Section 194J of the Act provides for deduction of tax at source from fees for professional or technical services. As ruled by the Hon'ble Delhi High Court in the case of CIT vs Delhi Transco Ltd (380 ITR 398), professional and technical servicewss consist of services of technical nature when special skills or knowledge relating to technical field are required for their provision, managerial services are rendered for performing management functions and consultancy services relate to provision of advice by someone having special qualification that allow him to do so. What constitutes technical services cannot be understood in a rigid formulaic manner. It will vary from industry to industry. There will have