2018 (5) TMI 582

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....yments of commission to its distributors on the sale of pre-paid SIM cards, recharge coupons etc. during the year under consideration but no TDS was deducted on the said commission payment as per the provisions of Section 194H of the Income Tax Act, 1961 as per the Assessing Officer. Therefore, the assessee was asked vide letter dated 12.03.2012, to furnish information regarding total amount of commission allowed to its distributors on sale of such pre paid products along with details of TDS made. In the said letter, the assessee was specifically asked to explain the reason thereof if no TDS is deducted as explained above. The assessee filed reply dated 22.03.2012. By following various judicial decision, the Assessing Officer held that the ....

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.... liable to deduct tax at sources u/s 194J of the Act on payment made/ credited in respect of roaming charges to other telecom operators for the technical services provided by them to the subscribers of the deductor assessee, which it failed to do so. Therefore, the assessee failed to deduct tax at source u/s 194J of the Act on the amount of roaming charges paid/credited amounting to Rs. 2,37,37,341/- for the year under consideration and assessee is deemed to be an assessee in default u/s 201(1) for an amount of Rs. 2,37,37,341/- & consequential interest thereon of Rs. 5,69,696/- u/s 201(1A) of the Act. 3. Being aggrieved by the said order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. ....

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.... payment of roaming charges he supported the order of the CIT(A). With respect to Ground No. V he submitted that interest for non deduction of tax at source u/s 201(1A) is automatic and mandatory. The Ld. DR relied upon order of the CIT(A). 6. The Ld. AR for Revenue's appeal in A.Y. 2010-11, relied upon the order of the CIT(A). The Ld. AR further submitted that the issue contested herein was decided against the assessee by the Hon'ble Delhi High Court in case of the assessee's own case in CIT vs. Idea Cellular Ltd. for A.Ys 2003-04 and 2004-05 reported in (2010) 189 Taxmann 118. But, the Ld. AR submitted in case of Bharati Airtel Limited vs. DCIT (2014) (372 ITR 33), Hon'ble Karnataka High Court and in assessee's own case (87 taxmann.com....

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....rati Airtel Limited vs. DCIT (2014) (372 ITR 33), Hon'ble Karnataka High Court and in assessee's own case (87 taxmann.com 295) Hon'ble Rajasthan High Court decided this issue in favour of the assessee. As per Ld. AR, the order u/s 201 of the Act was passed by ITO TDS, Rohtak and thus, the Hon'ble Punjab and Haryana High Court which has necessary jurisdiction. After looking into the address of the assessee, the assessee's address is at Noida, Uttar Pradesh. Thus, in both these circumstances the jurisdictional High Court will not be the Hon'ble Delhi High Court. The Ld. AR relied upon the decision of the Hon'ble Supreme Court in case of CIT vs. Vegetable Products Ltd. 88 ITR 192 wherein it is held that if two reasonable constructions of a tax....

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....nt would not be Fees for Technical services. Thus, payment made to other telecom operators should not be regarded as payment towards fees for technical service. The Ld. AR relied upon the decision of the Hon'ble Supreme Court in case of CIT vs. Bharati Cellular 193 taxman 97. The Ld. AR also relied upon the decision of the Delhi Tribunal in case of Bharati Airtel Ltd. Vs. ITO (TDS) (2016) 67 taxmann.com 223. The Ld. AR further submitted that any payment for the use of standard facility does not amount to fees for technical services. The Ld. AR relied upon the decision of the Hon'ble Apex Court in case of CIT vs. Kotak Securities Ltd. 67 taxmann.com 356 wherein it is held that facility provided with 'no customization to user' / 'customer nee....