Delhi ITAT Directs CIT(A) to Decide Whether CAM Charges Attract 2% TDS U/S 194C or 10% U/S 194-I

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, in this case, has mentioned that the Commissioner of Income Tax (Appeals) [CIT(A)] should determine whether Tax Deducted at Source (TDS) on Common Area Maintenance (CAM) levies 2% u/s 194C or 10% u/s 194-I is applicable, as the case cannot proceed on incorrect information.

The case facts of the taxpayer company, Fairwood Holdings Pvt. Ltd., was involved in the business of project development and consultancy services in energy, transportation, city development, turnkey projects in the infrastructure, residential, industrial, and commercial fields, along with supplementary services for provisions of layouts, blueprints, design plans and drawings.

Also Read: All Details of Section 194C for TDS Payment to Contractors

On the premises of the business, an investigation was performed wherein it was discovered that a TDS liability was due on the deductor company/assessee.

The Assessing Officer stated that the payment of CAM expenses is included in the norms of section 194-I of the Income Tax Act, 1961, and it was said that the ‘assessee in default’ shall be obligated to file TDS of INR 3,42,723/-. The AO discovered a total demand of Rs 3,42,723, thereby deeming the assessee to be the ‘assessee in default’.

The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the order when the assessee appealed to them. The tribunal decided it was appropriate to restore the issue to the CIT(A) for a fresh examination based on the facts, as there were evident errors in the order.

The tribunal discovered that the CIT(A) had considered different facts, ruling that the expenses incurred by the assessee were classified as “fees for professional or technical services.” However, the CIT(A) did not address whether CAM charges should be taxed at a rate of 2% or 10%.

On 24.07.2026, the bench of M. Balaganesh (Accountant Member) and Kavita Rajagopal (Judicial Member) permitted the appeal for statistical purposes.