Whether assessee is to be assessed u/s 44ADA just because TDS is deducted u/s 194J?

Описание: #Najeeb Ur #Rehman vs. Income Tax Officer, Ward 70(1), New Delhi
Bench: Delhi Bench: "SMC" New Delhi
Appeal Number: ITA No. 7256/Del/2026
Assessment Year: 2024-25 (Note: Body of order notes AY 2023-24)
Date of Pronouncement: 18.08.2026
Playlist: 44AD, 44ADA, 194J, 44AA
Question: Whether assessee is to be assessed u/s 44ADA just because TDS is deducted u/s 194J?
The assessee's total receipts of Rs. 32,10,294/- were subjected to Tax Deducted at Source (TDS) under Section 194J of the Income-tax Act, 1961.
Based on this TDS deduction, the lower authorities treated the receipts as technical consultancy and assessed the assessee under Section 44ADA rather than Section 44AD.
The assessee challenged this before the Tribunal, pointing to agreement clauses showing actual services performed relate to design and new looks in the hairstyle industry, which are not technical in nature.
Whether the lower authorities were justified in assessing the assessee under Section 44ADA instead of Section 44AD merely because TDS was deducted under Section 194J for services rendered in the hairstyle industry?
Total receipts subjected to TDS under Section 194J cannot automatically warrant assessment under Section 44ADA if the actual nature of services performed (as per agreement clauses, such as design and new looks in the hairstyle industry) does not constitute technical consultancy under the law.

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