TaxTMI 
TaxTMI 
2016 (3) TMI 727
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....on 194J of the Act. 3) On the facts and circumstances of the case and in law, the learned CIT (A) has erred in not directing the learned TDS Officer to verify payment of tax in respect of the recipient telecom operators for whom the appellant could not furnish confirmations despite the fact that other requisite details for such verification were available with the learned CIT (A)/TDS Officer. 4) On the facts and circumstances of the case and in law, the learned CIT (A) has erred in directing the learned TDS Officer to levy interest under section 201(1A) on the tax demand raised under section 201(1) of the Act. 2. The Tribunal vide order dated 27.11.2015 has decided ground no. 1 against the assessee whereby the Tribunal has held that the proceedings initiated and completed under section 201(10/201(1A) were within the period of limitation. 3. At the outset, the ld A/R for the assessee has submitted that the Bench in the matter of M/s. Bharti Hexacom Ltd. vs. ITO in ITA No. 256/JP/2010, in the identical facts and circumstances has held in favour of the assessee. Besides that, it was also submitted that the other Benches of Chennai, in the matter of M/s. Vodafon....
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....maintain and operate customer care centre round the clock for the subscribers of assessee company. 2. To implement GSM services in accordance with the GSM specifications. 3. Settlement of Bills. 4. To monitor technical aspects concerning both the pre-commercial and commercial phases of GSM national roaming. 5. To implement fraud prevention procedures. All the above activities require constant human involvement for monitoring and for unhindered operations. Moreover, Service Tax Act has also recognized the roaming as service for the purpose of service tax vide the Finance Bill, 2007. Thus the reliance on the decision in the case of Bharti Cellular Limited placed by the assessee is misplaced. Here it is also pertinent that " The definition of "fees for technical services" is very wide. It covers within its ambit any managerial, technical or consultancy services rendered by a person. The service of this nature involves human skill as well as computerized machines. It is not automatic. But it is fully supported by services of personnel and requires human application of mind along with technical equipments." The facts mentioned in the order....
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.... Billing process * Usage of roaming subscriber in visited network is captured in a file called TP, i.e. transferred account procedure for GSM/CIBER, i.e., cellular inter-carrier billing exchange record for. * TAP file contains details of calls made by subscriber, viz., location, calling party, time of call and duration, etc. * TAP/CIBER files are rated as per tariffs charged by visiting network operator. * Such TAP/CIBER file is transferred to home network of subscriber (i.e. to Hexacom). * Home network (i.e. Hexacom) then bills these calls to the Hexacom's subscriber and pays roaming charges based on the TAP to the visited network operator (i.e. Airtel). The roaming operator charges as per the roaming agreement with Hexacom, whereas the subscriber is billed as per the tariff subscribed. * The entire process is automatic. It is concluded that the above transaction flow that the service of providing airtime by visiting telecom circle is directly to the subscriber and not to Hexacom. The subscriber of Hexacom uses the network set up by the visiting circle and instead of amount being recovered from the roaming subscriber, ....
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.... provided to the subscriber. There is commercial arrangement to connect the technical networks basically to be able to do business. In fact DOT mandates that it should be so connected. There is no payment made for connecting the networks. Payments are made for calls which the roaming subscriber makes. If no calls are made no payment is made in spite of the fact that the networks are inter connected. He further relied on the decision in the case of CIT Vs. Bharti Cellular Ltd. 319 ITR 139 (Del) wherein it has been held by the Hon'ble Delhi High Court that roaming services not involving human interference and is not technical services as contemplated under Explanation 2 to Section 9(1)(vii) of the Act and not liable for tax deduction at source U/s 194J of the Act. This view has been earlier held by the Hon'ble Madras High Court in the case of Skycell Communications Ltd. Vs. DCIT (2001) 251 ITR 53 (Mad) order dated 23/2/2001 wherein the Hon'ble High Court has held that provisions of Cellular mobile telephone facility to subscribe is not a technical service. Deduction of tax at source need not to be made from subscriptions U/s 194J of the Act. He further relied on the decision in the c....
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....ransco Ltd. (ITA No. 755(Del)/2011 A.Y. 2005-06. He also relied on the decision in the case of DCIT Vs. Parasrampuria Synthetics Ltd. 20 SOT 248 (Delhi). The revenue filed appeal against the order of Hon'ble Delhi High Court in the case of Bharti Cellular Ltd. before the Hon'ble Supreme Court. The Hon'ble Supreme Court has held as under:- "In cases requiring examination by technical experts, the Department ought not to proceed only by the contracts placed before the officers. With the emergence of our country as one of the BRIC countries and with technological advancement, the Department ought to examine technical experts so that the matters could be disposed of expeditiously. Further, this would enable the appellate forum, including the Supreme Court, to decide the legal issues based on the factual foundation. Held accordingly, remanding the matters for determination with technical assistance, that in these cases, in which a cellular provider under an agreement pays interconnect/access/port charges to BSNL/MTNL, the question whether the cellular provider has rendered technical services and has to deduct tax at source, depended on whether the charges were ....
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....n in ITA No. 656/JP/2010 to the present set of facts. For the sake of clarity, we are hereby reproducing para 6 of the said order as under :- "6. We have heard the rival contentions of both the parties and perused the material available on the record. Recently this Bench has decided similar issue in the case of Tata Tele Services, which is identical to the assessee's case. The facts of the case has been demonstrated by the AR that the assessee was issuing bill on net amount on MRP has been fixed on prepaid card sold. The assessee has not transferred any income to the distributor but the distributor was allowed to avail the airtime to the extent of MRP price. In books of account, the assessee had credited these receipts on net basis. The finding on the case of Tata Tele Services is reproduced as under: "2.23. We find merit in the contention of ld. Counsel that there is no jurisdictional high court judgment on this issue. Hon'ble Karnataka High Court Judgment is elaborate, detailed, considers the previous Delhi and Kerala High Court judgment against the assessee and is latest comprehensive adjudication on the issue. Even if it is held that there exist divergence of ....