Law:

Section:

Section 194C is not applicable to professional fees for services rendered by professionals, e.g., lawyers, chartered accountants, doctors, architects, etc. Section 194C of the Income-tax Act, 1961 - Deduction of tax at source - Contractors/sub-contractors, payments to - Whether section 194C is not applicable to professional people who render services, e.g., lawyers, chartered accountants, legal advisers, doctors, engineers, architects, consultants, etc., and receive payments from persons who need their services - Held, yes - Whether, therefore, circular dated 8-3-1994 making section 194C applicable to fees for professional services rendered by such professionals is to be quashed - Held, yes Circulars and notifications - CBDT Circular dated 8-3-1994 HELD Section 194C really deals with contractors who are businessmen, e.g., building contractor, or contractor who does work of transportation or loading of goods, or for supply of materials. The context of that provision shows that it is not dealing with professionals like lawyers, doctors, accountants, etc., and it does not refer to payment of fees to such professionals. [Para 9] In view of the decisions in Chamber of Income-tax Consultants v. CBDT [1994] 209 ITR 660/ 75 Taxman 669 (Bom.); Madras Bar Association v. CBDT [1995] 216 ITR 240 (Mad.) and All Gujarat Federation of Tax Consultants v. CBDT [1995] 214 ITR 276/ 80 Taxman 460 (Guj.), the impugned circular is to be quashed, so far as it is made applicable to professionals. [Paras 11 and 12] CASES REFERRED TO Associated Cement Co. Ltd. v. CIT [1993] 201 ITR 435/ 67 Taxman 346 (SC) [Para 7], Chamber of Income-tax Consultants v. CBDT[1994] 209 ITR 600/ 75 Taxman 669 (Bom.) [Para 11], Madras Bar Association v. CBDT [1995] 216 ITR 240 (Mad.) [Para 11] andAll Gujarat Federation of Tax Consultants v. CBDT [1995] 214 ITR 276/ 80 Taxman 460 (Guj.) [Para 11]. Vikram Gulati for the Petitioner. JUDGMENT M. Katju, J. - This writ petition has been filed for a writ of certiorari to quash the impugned Circular dated March 8, 1994, Annexure 1, to the petition. 2. Heard learned counsel for the parties. 3. Petitioner No. 1 is a registered body representing the Moradabad Chartered…

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