The Delhi tribunal has held that payments to institutions providing technical training to employees of assessee are not payments for pro-viding professional services and would not attract withholding tax provisions of 194J.

The assessee, a joint venture company, made payment (including tuition fees and training-related expense) to a management development institute for providing advanced management training to its director without withholding any tax (TDS).

According to the assessing officer, the payments were for professional services and hence liable for TDS under section 194J of the I-T Act. Accordingly, he held the assessee as an ‘assessee in default’ and levied penalty for non-deduction of TDS.

The tribunal observed that the institute was providing management training and running various kinds of programmes and by doing so it was merely ‘imparting knowledge’ to the participants.

By no stretch of imagination it can be said that the participant was a recipient of

professional services from the institute. Hence, the tribunal held that it was not liable to withhold the tax.


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Chartered Accountant

Thanks for this information.Same case is also happening with our company. We have provided training to employees of the other co. and they have deducted tax u/s 194J.

Thanks for info mam

Could u pls. cite the case in reference to which the decision was given ITAT
Finance Controller CA. CS. CFA. CIFRS. M.COM.

Forum Moderator

Thanks for the information but can you give me ref number

Based on tribunal judgement any employer can not stop deducting TDS from the Training fees. When we analyse sec 194J. It gives reference to Explantion 2 of Sec 9(1)(vii). where Technial service is defined.

For the purposes of this clause, “fees for technical services” means any consideration (including any lump sum consi-deration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction87, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head “Salaries”.

Hence the training fees paid to the management institute will attract TDS. The employer shall keep deduct TDS till we get clarifcation from the Dept.

Recently qualified CA Final

can some one please give me a citation or a copy of the caselaw


Finally what is the conclusion?  In our case, our employees attended workshop.  Whether tds is applicable in this case.  They have charged service tax in their bill.

Student CA Final

In The case of: Lloyds Register Industrial Services (India) Pvt. Ltd. v. ACIT,  Appeal No.: ITA No. 940 & 7628/Mum/04, Decided on: November 4, 2009, training fee cannot be termed as “fee for technical services” and no TDS provision will apply.



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