Vodafone Mobile Services Limited , New Delhi V. DCIT International Taxation Circle 2(2) , CHENNAI

ITA 1653/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5768 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 30-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SPARSH BHARGAVA
• Keywords: Scheme of amalgamation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . , , BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./I.T.A. NO. 1653/MDS/2017 / ASSESSMENT YEAR : 2014-2015 M/S. VODAFONE MOBILE SERVICES LTD, (FORMERLY KNOWN AS VADAFONE CELLULAR PVT. LIMITED NOW SANDS AMALGAMATED WITH VODAFONE MOBILE SERVICES LIMITED) C-48, OKHLA INDUSTRIAL AREA, PHASE II, NEW DELHI VS. THE DEPUTY COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION CIRCLE 2(2) CHENNAI. [PAN AAACB 8614L ] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : SHRI. SPARSH BHARGAVA, ADVOCATE $%! ' # /RESPONDENT BY : DR. S. PANDIAN, IRS, JCIT. & ' ' () /DATE OF HEARING : 05-12-2017 *+ ' () /DATE OF PRONOUNCEMENT : 07-12-2017 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: ASSESSEE IN THIS APPEAL FILED AGAINST AN ORDER DA TED 12.05.2017 OF THE LD. COMMISSIONER OF INCOME TAX (A PPEALS)-16, CHENNAI, HAS TAKEN ALTOGETHER FIVE GROUNDS OF WHIC H GROUND NO.1 READS AS UNDER:- ITA NO.1653/MDS/2017 :- 2 -: 1. GROUND NO.1- APPELLATE ORDER PASSED BY COMMISS IONER OF INCOME TAX (APPEALS) IS BAD IN LAW AND HENCE, VO ID-AB- INITIO. 1.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN HOLDING THE APPEAL FILED BY THE APPELLANT AGAINST THE ORDER PASSED BY THE LD. OFFICER UNDER SECTION 2 01(1) /201(1A) OF THE ACT AS INVALID WITHOUT TAKING COGNI ZANCE OF THE FACT THAT VCL DID NOT EXIST ON THE DATE OF FILI NG OF APPEAL AND WAS SUCCEEDED BY APPELLANT THAT IS VMSL AS A RESULT OF ITS MERGER WITH APPELLANT. 1.2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS FAILED TO APPRECIATE THE FACT THAT FILING OF AN APP EAL BY AN ENTITY WHICH CEASES TO EXIST IS A LEGAL IMPOSSIBILI TY AND APPEAL FILED IN THE NAME OF VCL WOULD HAVE BEEN LE GALLY INVALID. 2. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT M/S. V ODAFONE CELLULAR PRIVATE LIMITED HAD FILED FORM 15CA/CB GIV ING DETAILS OF PAYMENT TO NON-RESIDENTS AS REQUIRED IN RULE 37BB O F INCOME TAX RULES, 1962, FOR THE RELEVANT PREVIOUS YEAR. ACCORD ING TO THE LD. AUTHORISED REPRESENTATIVE, LD. DCIT ISSUED NOTICE TO THE ASSESSEE FOR GIVING REASONS WHY TAX WAS NOT DEDUCTED ON REMITTA NCES TO VARIOUS FOREIGN PARTIES AGGREGATING TO D2,20,65,400/- FOR I NTERNATIONAL ROAMING, WHICH AS PER THE LD. DCIT WAS ROYALTY/FEE FOR TECHNICAL SERVICES. AS PER THE LD. AR, ASSESSEE HAD THEREUPO N GIVEN REPLY WHY ROAMING CHARGES SHOULD NOT BE TREATED AS TECHNICAL SERVICES AND WHY NO ELEMENT OF ROYALTY WAS THERE IN SUCH PAYMENTS. AS PER THE LD. AUTHORISED REPRESENTATIVE, ASSESSEE HAD ALSO BROUG HT TO THE NOTICE ITA NO.1653/MDS/2017 :- 3 -: OF THE LD. ASSESSING OFFICER THE ORDER OF JURISDICT IONAL HIGH COURT IN COMP. PETN NO. 225 OF 2012, DATED 5 TH JUNE, 2013, THROUGH WHICH A SCHEME OF AMALGAMATION STOOD APPROVED WITH EFFECTI VE DATE FROM 11.12.2015. AS PER THE LD. AUTHORISED REPRESENTATI VE BY VIRTUE OF THE SAID SCHEME, FOUR COMPANIES INCLUDING VODAFONE CELL ULAR PVT. LTD STOOD AMALGAMATED WITH M/S. VODAFONE MOBILE SER VICES LIMITED. AS PER THE LD. AUTHORISED REPRESENTATIVE, LD. ASSESSIN G OFFICER HIMSELF HAD FOUND THAT M/S. VODAFONE MOBILE SERVICES LTD A S ONE IN DEFAULT, THOUGH THE RETURNS WERE FILED BY M/S. VODAFONE CEL LULAR PRIVATE LIMITED. CONTENTION OF THE LD. AUTHORISED REPRESEN TATIVE WAS THAT M/S. VODAFONE MOBILE SERVICES LTD, WHICH WAS THE AMALGA MATED COMPANY, HAD FILED APPEAL AGAINST THE ORDER OF THE LD. ASSES SING OFFICER TREATING THE ASSESSEE AS ONE IN DEFAULT U/S.201(1) OF THE A CT. AS PER THE LD. AUTHORISED REPRESENTATIVE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD REFUSED TO CONSIDER SUCH APPEAL TAKIN G A VIEW THAT APPELLANT BEFORE HIM WAS DIFFERENT FROM THE ASSES SEE. AS PER THE LD. AUTHORISED REPRESENTATIVE JUST BECAUSE PAN OF THE AMALGAMATING COMPANY VIZ M/S. VODAFONE CELLULAR PRIVATE LIMITED AND PAN OF AMALGAMATED COMPANY VIZ M/S. VODAFONE MOBILE SERVI CES LTD WERE DIFFERENT, LD. COMMISSIONER OF INCOME TAX (APPEALS) OUGHT NOT HAVE DISMISSED THE APPEAL OF THE ASSESSEE. CONTENTION O F THE LD. AUTHORISED REPRESENTATIVE WAS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) DID ITA NO.1653/MDS/2017 :- 4 -: NOT CONSIDER THE JUDGMENT OF HONBLE JURISDICTIONA L HIGH COURT APPROVING THE MERGER. 3. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE PERUSED THE ORDERS AND HEARD THE CONTENTIO NS. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD DISMIS SED THE APPEAL OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS:- THE APPELLANT M/S. VODAFONE MOBILE SERVICES LTD HA VING PAN NO. AAACS 4457Q HAS E-FILED APPEAL VIDE ACKNOWLEDGEMENT NO.380747571040816 IN FORM NO.35 AGAINST THE ORDER PASSED IN THE CASE OF ASSESSEE M/ S. VODAFONE CELLULAR PVT. LTD HAVING PAN NO. AAACB 861 4L U/S.201(1) (1A) OF THE INCOME TAX ACT, 1961 DATED 28.06.2016 FOR A.Y. 2014-15. THEREFORE, THE APPEAL FILED IN THE NAME OF M/S. VODAFONE MOBILE SERVICES LTD, H AVING PAN NO.AAACS4457Q HAS E-FILED APPEAL VIDE ACKNOWLEDGMENT NO.380747571040816 IS TREATED AS INVALID APPEAL IN THE EYES OF IN THE VIEW OF THE AB OVE, APPEAL IN THE NAME OF M/S. VODAFONE MOBILE SERVICES LTD HAVING PAN AAACS4457 HAS E-FILED APPEAL VIDE ACKNOWLEDGMENT NO.380747571040816 APPEARING IN THE APPEAL REGISTER OF COMMISSIONER OF INCOME TAX (APPE ALS)- 16, CHENNAI AT ITA NO.63/CIT(A)-16/FY 16-17 IS TREA TED AS INVALID APPEAL. HENCE IT BECOMES INFRUCTUOUS AND FOR STATISTICAL PURPOSE TREATED AS DISMISSED. IT IS TRUE THAT ORDER U/S.201(1)/(1A) OF THE ACT WA S PASSED BY THE LD. ASSESSING OFFICER IN THE NAME OF M/S. VODAFONE CELL ULAR PRIVATE LIMITED. HOWEVER, IN THE CONCLUDING PART OF THE S AID ORDER HE NOTED AS :- ITA NO.1653/MDS/2017 :- 5 -: IN VIEW OF THE FACTS NARRATED ABOVE, THE ASSESSEE M/S. VODAFONE MOBILE SERVICES LTD IS HELD TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF THE FOLLOWING REMITTANCES MADE DURING THE FINANCIAL YEAR 2013-14 WITHOUT DEDUCTION OF TAX AT SOURCE. SL.NO HEAD OF REMITTANCE AS PER FORM 15CA TREATED AS AMOUNT (IN D) 1 INTERNATIONAL ROOMING CHARGES ROYALTY /FEE FOR TECHNICAL SERVICES 2,20,65,400/ - TOTAL 2,20,65,400/- IT IS THEREFORE CLEAR THAT LD. ASSESSING OFFICER WA S AWARE OF THE MERGER OF THE ASSESSEE COMPANY WITH M/S. VODAFONE MOBILE S ERVICES P. LTD. WE ALSO FIND THAT THE HONBLE JURISDICTIONAL HIGH C OURT VIDE THE JUDGMENT DATED 5 TH JUNE, 2013 HAD GIVEN APPROVAL FOR THE SCHEME OF AMALGAMATION. ONCE THE SCHEME OF AMALGAMATION IS A PPROVED BY THE HONBLE JURISDICTIONAL HIGH COURT, WE CANNOT SAY TH AT THE APPEAL ON BEHALF OF THE AMALGAMATING COMPANY CANNOT BE FILED BY NEWLY FORMED AMALGAMATED COMPANY. IN OUR OPINION, LD. COMMISSIO NER OF INCOME TAX (APPEALS) FELL IN ERROR IN REFUSING TO CONSIDER THE APPEAL OF THE ASSESSEE JUST FOR A REASON THAT PERMANENT ACCOUNT N UMBERS WERE DIFFERENT. ONCE THE MERGER IS APPROVED BY THE HON BLE JURISDICTIONAL HIGH COURT WHAT IS RELEVANT IS ONLY THE PERMANENT A CCOUNT NUMBER OF THE AMALGAMATED COMPANY AND THE PERMANENT ACCOUNT NUMBERS OF ITA NO.1653/MDS/2017 :- 6 -: THE AMALGAMATING COMPANIES ARE NOT AT ALL RELEVANT. WE ARE OF THE OPINION THAT THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) OUGHT HAVE ADJUDICATED THE APPEAL OF THE ASSESSEE ON MERITS. W E THEREFORE SET ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME T AX (APPEALS) AND REMIT THE APPEAL BACK TO HIM FOR CONSIDERATION AFRE SH IN ACCORDANCE WITH LAW. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THURSDAY, THE 7TH DAY OF DECEMB ER, 2017, AT CHENNAI. SD/- SD/- ( ) (GEORGE MATHAN) / JUDICIAL MEMBER ( . '#'$ ) (ABRAHAM P. GEORGE) % &' / ACCOUNTANT MEMBER - ' / CHENNAI . / DATED:7TH DECEMBER, 2017. KV / ' $(0 1 2 1 ( / COPY TO: 1 . ! / APPELLANT 3. & 3( ( ) / CIT(A) 5. 167 $(8 / DR 2. $%! / RESPONDENT 4. & 3( / CIT 6. 79 :' / GF