TaxTMI 
TaxTMI 
2017 (11) TMI 568
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....e Appellant respectfully submits that: On the facts and circumstances of the case and in law, the notice issued under section 263 of the of Income Tax Act, 1961 ('Act') by the learned Commissioner of Income Tax (TDS), Chandigarh (hereinafter referred to as the 'learned CIT (TDS)') and the order passed under section 263 of the Act are illegal, bad in law and without jurisdiction. 2 On the facts and in circumstances of the of the case and in law, the learned CIT(TDS) erred in assuming the jurisdiction under section 263 of the Act since:- 2.1 the revisionary proceedings under section 263 of the Act have merely been initiated on the basis of the letter received from Assistant Commissioner of Income Tax (TDS), Chandigarh ('ACIT') and the CIT (TDS) did not arrive at any independent satisfaction for initiation of such proceedings. 2.2 by acceding to the request of the learned ACIT, the CIT(TDS) has effectively enhanced the time limitation prescribed under section 201(3) of the Act for completion of201 proceedings by a TDS officer. 2.3 the order passed by the learned ACIT is neither 'erroneous' nor 'prejudicial' to the interest of the ....
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.... facts and circumstances of the case." 3. The following are the common grounds taken in ITA Nos. 716 to 718/Del/2017:- The Appellant respectfully submits that: On facts and circumstances of the case and in law, the learned Commissioner of Income (Appeals), Karnal ['learned CIT(A)'] has erred in passing the order under section 250 of Income Tax Act, 1961 ('Act'), confirming the contentions of the Income Tax Officer - Karnal ('learned TDS officer') that the Appellant is liable to deduct tax at source on 19 charges as per the provisions of the section 194J of the income tax act (' Act'). Each of the ground is referred to separately, which may kindly be considered independent of each other. Ground No.1 - The order passed by the learned TDS officer is bad in law 1.1 On the facts and circumstances of the case and in law, the learned CIT(A) has erred in upholding the order passed by the learned TDS officer, which is bad-in-law. 1.2 On the facts and circumstances of the case and in law, the learned CIT(A) officer has erred in upholding the order of the learned TDS Officer in treating the Appellant as 'assessee in default', despite o....
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....les laid down in judicial precedents cited by the Appellant and also ignoring the binding Apex Court judgment in the case of CIT vs Delhi Transco Limited 68 taxmann.com 231 and CIT vs Kotak; Securities Limited 67 taxmann.com 356. 3. Ground No.3 - No TDS demand can be under section 201(1) of the Act can be recovered from the Appellant 3.1 On the facts and circumstances of the case and in law, the order of the learned CIT(A)/TDS Officer is bad in law in so far it seeks to recover tax demand under section 201 of the Act in contradiction to the settled principle that the payer cannot be held liable for payment of the tax demand in cases involving non-deduction of tax at source and only interest liability under section 201(IA) of the Act, If any, can be levied in such cases. 3.2 Without prejudice to Ground No. 3.1, on the facts and circumstances of the case and in law, the Ld. CIT(A)/TDS Officer has erred in raising demand under section 201(1) of the Act even though taxes would have been paid on roaming charges by the recipient parties. Such an action has resulted in double recovery of taxes, which is against the rules of taxation principles. 3.3 Without prejudice to Ground ....
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.... proposal under section 263 of the Act are correct, as the Assessing Officer while passing order u/s 201(1) r.w.s. 201(lA) have not dealt with the issue of TDS on Roaming Charges/Interconnect Charges paid by the Assessee. In view of above facts and in the interest of natural justice, before passing any order u/s. 263 an opportunity of being heard is given to the assessee, vide Ld. CIT's office letter No. 6518 dated 23.03.2012 and the case was fixed for hearing on 29.03.2012. On said date, a letter requesting to adjourn the case on any other convenient date was received. The case was fixed for hearing on 27.04.2012 and finally on 23.03.2013. The assessee submitted its reply stating therein as under:- In this regard, on behalf of and under instruction of our subject client, we wish to submit that a reply providing our detailed submission against initiation of revisionary proceedings under section 263 of the Act and also on the merits of the case has been filed vide our letter dated April 27, 2012. In the above reply, it was inter-alia submitted as under: Conditions pre-requisite for initiation of revisionary proceeding under section 263 of the Act are not present in the instant....
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.... because he is inclined to follow the other legally sustainable view in preference to the one followed by the AO. The Hon'ble Summit Court in Malabar Industrial Co. Ltd., v. CIT [(2000) 243 ITR 83 (SC)] has held that: 'Where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income Tax Officer is unsustainable in law. Tthe same view has been reiterated by several Hon'ble High Courts including the Hon'ble Delhi High Court in CIT Vs. Ansal Properties & Ind. Pvt. Ltd., (2009) 315 ITR 225 (Del). In this case it has been noticed that: That at the time when the Commissioner issued the notice under section 263 and passed the order dated March 23, 2004, the question of surcharge on undisclosed income was a debatable one. When an issue was debatable, the provisions of section 263 could not be invoked. From the above discussion it is axiomatic that no revision can be done on a debatable issue. An issue becomes debatable if two legally sustainable views exist on a particular point. When the AO accepts....
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.... roaming subscriber makes/ receives calls while he is roaming in the telecom service area of the other telecom operator for which it is entitled to receive appropriate service charges from VOL. It is imperative to note that services provided by the other telecom operators are standard automated services, which are available for any telecom operator willing to avail those services (to enable its subscribes to make/receives calls when the subscribers are roaming) in consideration for payment of appropriate charges. Reliance in this regard is placed on the decision of the Hon'ble Madras High Court in the case of Skycell Communications Vs DCIT 251 ITR 53, wherein it has been held as under: "Technical service referred in section 9(1) (vii) contemplates rendering of a "service" to the payer of the fee. Mere collection of a "for use of a standard facility provided to all those willing to pay for it does not amount to the fee having been received for technical services." The Hon'ble High Court thus came to the following conclusion: "At the time the income tax act was enacted in the year 1961, as also, at the time when explanation 2 to section 9(1)(ii) was introduced by t....
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....rators and hence, cannot be classified as FTS for the purpose of the Act. B. No human intervention is involved in provision of roaming services. As per section 9 of the Act, FTS has been defined to mean "any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head "Salaries". In absence of specific meanings of the terms 'technical', 'managerial' and 'consultancy' in the Act, reliance can be placed on the dictionary meanings of such terms. The same has been listed below: As per the Concise Oxford Dictionary, the term 'technical' has been defined to mean, "requiring special knowledge to be understood". The Black's Law Dictionary defines the word technical as "belonging or peculiar to an art or profession". The word "management" is derived from the word "manager" which a per the Concise Oxford Dictionary....
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....lso held that the deductor cannot be treated as an assessee in default till it is found that the recipient has also failed to pay such tax directly. CIT Vs Bharti Cellular Limited & other 330 ITR 239 (Supreme Court). The Hon'ble Supreme Court held that in case where taxes have been paid no demand can be raised under section 201(1) of the Act. Vodafone Essar Limited Mumbai Vs DCIT (TDS) 113 ITJ 385 (Mumbai Tribunal): The Mumbai Tribunal, relying upon the decision of the Supreme Court in case of Hindustan Coca Cola Beverage Pvt. Ltd., (supra) held that the recovery could not once again be made from the tax deductor where the payee included the income on which tax was alleged to have been short deducted in its taxable income and paid taxes thereon. In view of the aforesaid submissions and facts and in circumstances of the case, we wish to summarize that the order passed by the learned TDS Officer was neither erroneous nor prejudicial to the interests of revenue and hence, 'Section 263 of the Act cannot be invoked in the present case. Even on merits of .the case, roaming charges paid VDL to the other telecom operators do not qualify as FTS for the purpose of the Act and h....
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....terconnection charges/roaming charges fall under the ambit of section 194J of the Income tax Act, 1961. 4. In view of the above discussion, Ld. CITI found that the orders passed under section 201(1) read with section 201 (1A) of the Act for the financial year 2006-07 to 2008-09 relevant to the assessment year 2007-08 to 2009-10, are erroneous and also prejudicial to the interest of revenue. Hence the same are set aside with the direction to Assessing Officer to examine the default of the assessee to the extent of not deducting tax at source on oaming/Interconnect Charges paid during these years and chargeability of interest 'under section 201(1) read with section 201(lA) of the Income tax Act, 1961 by examining the issues on the lines as directed by Hon'ble Supreme Court in the case of M/ s Bharti Cellular Ltd. to the Assessing Officer of Gurgaon who completed the order under section 201(1)/201(lA) of the Income tax Act, 1961. 7. Against the aforesaid order of the Ld. CIT passed u/s. 263 of the Act dated 30.3.2013, assessee is in appeal before the Tribunal. 8. Ld. Counsel of the assessee has stated that the notice issued under section 263 of the of Income Tax Act, 196....
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....any human intervention at all and hence, such payments cannot be classified as FTS liable for deduction of tax at source under Section 194J of the Act; no demand u/s. 201/201(1A) of the Act can be raised where taxes so deductible but not deducted by the payer are directly paid by the recipient and such an action would result in double recovery of the demand. In support of his arguments, he draw our attention towards the page no. 27 to 32 of the Paper Book which is copy of the order u/s. 201(1) & 201(1A) of the I.T. Act, 1961 dated 29.3.2011 passed by the ITO (TDS), Karnal and relied upon the order of the AO and stated that Section 194J of the Act is not applicable in the present case. He further draw our attention towards page no. 47 of the PB which is a copy of notice of proposal for revision u/s. 263 of the Act issued by the Ld. CIT(TDS) dated 23.3.2012 and further draw our attention towards the page no. 48- 76 of the PB filed by the assessee which are the copy of the submission/reply to the show cause notice of the Ld. CIT in which it is was specifically mentioned that the issue in dispute has been duly examined by the AO. Further, Ld. Counsel of the assessee draw our attention ....
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....vant records available with us, especially the impugned order passed by the Ld. CIT u/s. 263 of the Act alongwith Paper Book filed by the Assessee as well as the Written Submissions filed by the Revenue before us. After perusing the aforesaid order of the Ld. CIT, we are of the considered opinion that the order of the Ld. CIT is wrong in assuming the jurisdiction under section 263 of the Act because the revisionary proceedings under section 263 of the Act have merely been initiated on the basis of the letter received from Assistant Commissioner of Income Tax (TDS), Chandigarh and the Ld. CIT (TDS) did not arrive at any independent satisfaction for initiation of such proceedings; by acceding to the request of the learned ACIT, the CIT(TDS) has effectively enhanced the time limitation prescribed under section 201(3) of the Act for completion of 201 proceedings by a TDS officer; the order passed by the learned ACIT is neither 'erroneous' nor 'prejudicial' to the interest of the revenue since the learned ACIT took one of the two permissible views after conducting a detailed enquiry in respect of applicability of withholding tax provisions on the roaming charges paid by ....
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....passed the order dated 29.3.2011 judiciously after making all the enquiries / verification, which has been replied and on the basis of the said reply, the AO has passed his order dated 29.3.2011 by relying upon the Hon'ble High Court and ITAT decision. Despite that the Ld. Commissioner of Income Tax has wrongly invoked Section 263 of the Act, which is not sustainable in the eyes of law and therefore, the same deserve to be quashed. We further find that Hon'ble Supreme Court in the case of CIT vs. Green World Corporation 314 ITR 81 (SC) has held as under:- "The jurisdiction u/s. 263 can be exercised only when both the following conditions are satisfied: i) The order of the AO should be erroneous; and ii) It should be prejudicial to the Revenue interest. These conditions are conjunctive. An order of assessment passed by the AO should not be interfered with only because another view is possible." 10.1 An order would be erroneous only when the AO makes no enquiries during the course of assessment proceedings. This principle was noticed by the Delhi High Court in Geevee Enterprises vs. Addl. CIT 99 ITR 375 (Del.). In arriving at this decision, the Delhi High Court drew strength....