The AO held the assessee is liable to deduct tax u/s. 194H on the bank guarantee commission under the new scheme by Notification No 56/2012 which came into force on 01-01-2013. The Tribunal reversed the lower authorities order, as there is no principal-agent relationship between the bank and the assessee, which is a mandatory condition for invoking the provisions of S. 194H. Further, it noted that the bank guarantee commission partook the character of interest u/s. 2(28A), and the exemption provided u/s. 194A(3)(iii) is available to assessee qua such payment.  (AY. 2012-13)