Archive · 25 Jul 2026
ITAT Rules Attendance Doesn't Make Teachers Employees
A coaching institute in Kerala won a tax case against the Income Tax Department.
The department wanted to charge the institute ₹9.48 lakh because it thought the teachers were employees.
The teachers had fixed working hours and had to follow attendance rules.
But the ITAT said that just because teachers follow some rules doesn't make them employees.
The teachers were free to teach in their own way and didn't get benefits like provident fund or gratuity.
The ITAT also noted that the tax department had accepted the teachers' income as professional income, not salary.
So, the institute didn't have to pay the extra tax.
The ITAT quashed a ₹9.48 lakh tax demand against Brilliant Study Centre Pvt. Ltd.
The case involved whether contractual teachers should be treated as employees.
The ITAT ruled that administrative supervision does not establish an employer-employee relationship.
Key factors included no employment contracts, no statutory benefits, and freedom to teach in their own manner.
The ITAT noted that the tax department had accepted the teachers' income as professional income.
- Who
- Brilliant Study Centre Pvt. Ltd. (Kerala-based coaching institute) and the Income Tax Department
- What
- A tax demand of ₹9.48 lakh was quashed by the ITAT, ruling that contractual teachers are not employees.
- When
- The order was passed on 16 June 2026.
- Where
- The case was heard by the Income Tax Appellate Tribunal (ITAT), Cochin Bench.
- Why
- The ITAT ruled that administrative supervision does not establish an employer-employee relationship.
Income Tax Department
Brilliant Study Centre Pvt. Ltd.
Nature of Relationship
Income Tax Department
The teachers are employees due to fixed working hours, attendance monitoring, and leave approval requirements.
Brilliant Study Centre Pvt. Ltd.
The teachers are independent professionals as they have no employment contracts and are free to teach in their own manner.
Tax Deduction
Income Tax Department
Tax should be deducted under Section 192 (salaries).
Brilliant Study Centre Pvt. Ltd.
Tax should be deducted under Section 194J (professional fees).
Employee Benefits
Income Tax Department
Teachers should receive statutory benefits like provident fund and gratuity.
Brilliant Study Centre Pvt. Ltd.
Teachers are not entitled to statutory employee benefits.
- Case Name
- Brilliant Study Centre Pvt. Ltd. vs Income Tax Officer (TDS), Ward TDS, Kottayam
- Date of Order
- 16 June 2026
- Tax Demand Amount
- ₹9.48 lakh
- Section Under Which Tax Deducted
- Section 194J (professional fees)
- Section Under Which Tax Should Have Been Deducted (According to IT Department)
- Section 192 (salaries)
- Key Factors Considered by ITAT
- No employment contracts, no statutory benefits, freedom to teach in own manner, and acceptance of professional income by the IT Department