Sec. 194C of the Income-tax Act, 1961 - Deduction of tax at source - The assessee is a public limited company engaged in the business of running a passenger airline under the name and style "Indigo". It filed its quarterly return of tax deduction at source for FY 2009-10 pertaining to AY 2010-11. It collects passenger Fees services from the passengers in the ticket. This sum is paid to Airport Owner/ operator. Passenger service fee has two different components of security and facilitation. Security component is utilized for expenditure in respect of aviation security force deployed at the airport and facilitation is for services provided to the passenger at the airport. On verification of the return it was found by the AO that assessee has paid passenger service fees on which tax deduction at source is not appropriately made. The AO considered the security component as professional fees u/s 194J and held that on total payment shortfall of tax deduction at source was Rs. 135659952/- u/s 201(1) and computed interest u/s 201(1A) of Rs. 40095924/-. CIT (A) held that on total PSF payments tax should have been deducted @ 2% considering such payment falling u/s 194C of the Act and not @ 10% as AO considered them as fees for professional services. ITAT while upholding the decision of CIT(A) held that ”the payment by the assessee to the owner of the airport is for the purpose of work which is covered u/s 194C of the Act. Thus, the assessee should have deducted tax at source u/s 194C of the Act“. - INTER GLOBE AVIATION LTD. V/s ASSTT. CIT - [2020] 181 ITD 225 (ITAT-DELHI)