The Madras High Court has recently clarified that ‘Digital Marketing’ cannot be treated as a profession merely because the petitioner (a pioneer in the field of digital marketing, which combines the creativity of marketing with digital tools & methodologies) carried on the business through computers; and rather, it should be treated as a business.
A Single Judge Bench of Justice Krishnan Ramasamy observed that in the event the service provider (taxpayer) carrying on the business of Digital Marketing with cash transactions both on the aspect of receipts and payments in cash below 5% of the turnover, which is below Rs.5 Crores as per the proviso to Section 44AB(a) of the Income Tax Act, the said service provider is exempted from filing an audit report.
The Bench found that the petitioner has sufficiently established with evidence that its turnover is below Rs. 5 crores and the cash transaction is below 5% on both aspects of expenses and receipts, and everything was carried on through bank transactions, which evidence has been completely discarded by the AO while carrying out the assessment. The Bench therefore remanded the matter back to the AO for consideration afresh.
The observation came in reference to the contention raised by the petitioner regarding exemption from filing of audit report in terms of the 1st proviso to Section 44AB(a) of the Income Tax Act while filing income tax return, since the business of Digital Marketing carried on by it has a turnover below Rs. 5 crores, which was not considered by the AO during the course of assessment.
Appearances:
Advocate Hema Muralikrishnan, for the Petitioner
Advocate S. Premalatha, for the Respondent
