In Brief
Prasar Bharati (Doordarshan) paid advertising agencies 15% commission for telecasting advertisements on behalf of consumer companies under written agreements. The Income Tax authorities held that Section 194H of the Income Tax Act, 1961 (which requires deduction of tax at source on commission payments) applied, and Prasar Bharati had failed to deduct tax, thereby violating Section 201(1). The Supreme Court upheld this, holding that the payments constituted 'commission' within Section 194H's definition because the relationship was principal-agent and the payment was for services rendered. The appellant was obligated to deduct tax at source, and non-compliance attracted Section 201 consequences. The appeal was dismissed.
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