Jt. Commissioner of Income Tax (OSD) , International Taxation, Hyderabad V. Idea Cellular Limited, Hyderabad

ITA 170/Hyd/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2815 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 29-01-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 07-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR PANDEY
• Assessee Lawyers: RONAK G DOSHI
• Keywords: Period of limitation; Time period of passing order; TDS
• Section: 201(1); 195

Judgement Text

IN THE INCOME TAX A PPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER I TA NO S . 166, 167, 168, 169 AND 170 / HYD/201 9 A YS : 2006 - 07, 2007 - 08, 2008 - 09, 2009 - 10 AND 2010 - 11 JOINT COMMISSIONER OF INCOME - TAX (OSD) I, HYDERABAD. VS. IDEA CELLULAR LTD., HYDERABAD. PAN AAACB 2100P A PPELLANT RESPONDENT REVENUE BY: S H RI SUNIL KUMAR PANDEY ASSESSEE BY: SHRI RONAK G. DOSHI DATE OF HEARING: 2 9 / 0 1 / 20 20 DATE OF PRONOUNCEMENT: 11 / 0 3 /20 20 O R D E R PER P. MADHAVI DEVI, J.M.: TH ESE ARE THE REVENUE APPEALS DIRECTED AGAINST THE COMMON ORDER OF CIT(A) 10, HYDERABAD FOR THE AYS. 2006 - 07 TO 2010 - 11. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY, WHICH IS A TELECOM OPERATOR PROVIDING CELLULAR SERVICES IN THE STATES OF ANDHRA PRADESH AND TELANGANA HAD PAID IUS AND ROAMING CHARGES TO VARIOUS INTERNATIONAL TELECOM OPERATORS DURING PREVIOUS YEARS R ELEVANT TO AYS BEFORE US, BUT, DID NOT DEDUCT TDS U/S 195 OF THE IT ACT AND DID NOT REMIT THE TDS TO CENTRAL GOVT. ACCOUNT ON PAYMENTS MADE TO INTERNATIONAL TELECOM OPERATORS. THEREFORE, THE AO HAD ISSUED SHOW CAUSE NOTICES U/S 201(1) & 201(1A) DATED 25/11 /2016 TO THE ASSESSEE ASKING IT AS TO WHY IT SHOULD NOT BE TREATED AS AN ASSESSEE IN DEFAULT . ASSESSEE EXPLAINED THAT THE PAYMENTS I.T.A. NO S . 166 TO 170/ HYD/1 9 IDEA CELLULAR LTD., HYD. 2 MADE BY THE ASSESSEE TO INTERNATIONAL TELECOM OPERATORS DO NOT FALL IN THE CATEGORY OF FEES FOR TECHNICAL SERVICES AS DECIDED BY THE HONBLE ITAT, BANGALORE IN ASSESSEES OWN CASE VIDE ORDER DATED 06/11/2015 IN ITA NO. 648 TO 651/BANG/2014 AND, THEREFORE, THERE WAS NO LIABILITY OF THE ASSESSEE TO MAKE TDS. THE AO WAS, HOWEVER, NOT CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE AND HELD THAT THE ASSESSEE IS LIABLE TO MAKE TDS AND, THEREFORE, THE ASSESSEE IS AN ASSES SEE IN DEFAULT UNDER SECTION 201(1) AND INTEREST U/S 201(1A) OF THE ACT. ACCORDINGLY, HE RAISED THE DEMAND FOR THE RELEVANT AYS. 3. AGGRIEVED BY THE ORDERS OF AO, THE ASSESSEE PREFERRED APPEALS BEFORE THE CIT(A), WHO GRANTED RELIEF TO THE ASSESSEE BY R ELYING UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF UB ELECTRONIC INSTRUMENTS LTD., [2015], 371 ITR 314 (AP) TO HOLD THAT THE SHOW CAUSE NOTICES ISSUED BY THE DEPARTMENT FOR INITIATING PROCEEDINGS U/S 201(1) ARE BARRED BY LIMITATION. 4. AGAINST THE ORDER OF CIT(A) FOR THE ALL T HE YEARS UNDER CONSIDERATION, THE REVENUE IS IN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL, WHICH ARE COMMON IN ALL THE APPEALS UNDER CONSIDERATION: 1. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS ON FACTS AND IN LAW. 2. THE LD. CIT(A) ERR ED IN HOLDING THAT THE PROCEEDINGS U / S 201(1 )/ 201(1A) ARE BARRED BY LIMITATION OF TIME. 3. THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT NO TIME LIMIT HAS BEEN PRESCRIBED BY THE INCOME - TAX ACT. 1961 FOR COMPLETION OF PROCEEDINGS U / S 201(1) / 201(1 A) IN CASE OF NON - RESIDENTS. 4. THE LD. CIT(A) ERRED IN RELYING ON THE JUDGMENTS IN THE CASES OF CIT V NHK JAPAN BROADCASTING CORPN. I.T.A. NO S . 166 TO 170/ HYD/1 9 IDEA CELLULAR LTD., HYD. 3 (2008) 305 ITR 137, (2008) 217 CTR 592 DELHI AND CIT V HUTCHINSON ESSAR TELECOM LTD. (2010) 323 ITR 230 (DELHI) AS NO DIS TINCTION WAS MADE BETWEEN PAYMENTS TO RESIDENTS AND NON - RESIDENTS IN THESE CASES BY THE COURTS. 5. THE LD. CIT(A) ERRED IN NOT TAKING INTO CONSIDERATION THE AMENDMENT BROUGHT ABOUT IN SECTION 201(3) OF THE INCOME - TAX ACT, 1961. 6. THE LD. CIT(A) ERRED IN RELYING ON THE JUDGMENTS IN THE CASES OF CIT V U.B. ELECTRONIC INSTRUMENTS LTD. (2015) 371 ITR 314 (AP) AND CIT V BHARAT HOTELS LTD. (2016) 384 ITR 77, (2016) 288 CTR 682 (KARNATAKA) AS THESE WERE DELIVERED IN CASE OF PAYMENTS TO RESIDENTS. 7. THE LD. CIT(A) ERRED IN NOT TAKING INTO CONSIDERATION THE JUDGMENT DELIVERED BY THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN TIMES LTD. V UNION OF INDIA, AIR 1998 SC 688 AND THE HON'BLE HIGH COURTS IN THE CASES OF CIT(TDS) V HMT LTD. (2012) 248 CTR 103 (P&H ); CIT V TRICHUR CO - OP. BANK LTD. (2003) 266 ITR 574, (2003) 184 CTR 400 (KERALA) AND MASS AWASH (P.) LTD. V CIT(IT) (2017) 397 ITR 305, (2018) 300 CTR 299 (ALLAHABAD), WHEREIN IT WAS HELD THAT WHEN LEGISLATURE HAS MADE NO PROVISION FOR LIMITATION, IT WOUL D NOT BE OPEN TO COURT TO INTRODUCE ANY SUCH LIMITATION ON GROUND OF FAIRNESS OR JUSTICE. 8. ANY OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 5. THE LD. DR SUPPORTED THE ORDERS OF AO AND PLACED RELIANCE UPON THE DECISIONS MENTIONED IN THE G ROUNDS OF APPEAL, WHEREAS, THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDERS OF CIT(A) AND HAS ALSO FILED PAPER BOOK CONSISTING OF VARIOUS CASE LAW, WHEREIN, IT HAS BEEN HELD THAT INITIATION OF PROCEEDING S U/S 201(1) OF THE ACT AFTER A PERIOD OF 4 YE ARS IS BARRED BY LIMITATION. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, WE FIND THAT IN THE CASE BEFORE US, AYS ARE 2006 - 07 TO 2010 - 11, WHEREAS, THE SHOW CAUSE NOTICES WERE ISSUED ON I.T.A. NO S . 166 TO 170/ HYD/1 9 IDEA CELLULAR LTD., HYD. 4 25/11/2016 I.E. CLEARLY AFTER THE LAPSE OF 4 YEA RS FROM THE END OF THE RELEVANT FYS, IN WHICH, PAYMENTS WERE MADE. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF UB ELECTRONIC INSTRUMENTS LTD. (SUPRA) HAS CONSIDERED THAT THERE IS NO LIMITATION PERIOD PRESCRIBED FOR INITIATING ACTION U/S 201(1) A ND 201(1A) OF THE ACT, BUT AFTER CONSIDERING CASE LAW ON THE SUBJECT CLEARLY HELD THAT 4 YEARS IS TO BE TREATED AS THE REASONABLE PERIOD WITHIN WHICH ANY PENAL ACTION CAN BE INITIATED AGAINST THE ASSESSEE AND FAILURE TO INITIATE STEPS WITHIN THAT PERIOD WOULD DISABLE THE DEPARTMENT TO PROCEED AGAINST THE ASSESSEE. THIS DECISION HAS BEEN RELIED UPON BY THE CIT(A) TO GRANT RELIEF TO TH E ASSESSEE. 6.1. THE DECISION OF THE HONBLE APEX COURT RELIED UPON BY THE LD.DR IS ON A DIFFERENT SET OF FACTS AND IS DISTINGUISH FROM THE FACTS OF THE CASE BEFORE US. SINCE THE DECISION RELIED UPON BY THE CIT(A) IS OF JURISDICTIONAL HIGH COURT, THIS TR IBUNAL IS BOUND TO FOLLOW THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT . H ENCE, THERE IS NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND UPHOLDING THE SAME, WE DISMISS THE GROUNDS RAISED BY THE REVENUE IN ALL THE APPEALS UNDER CONSIDERATION. 7. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH , 20 20 . SD/ - SD/ - (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER ( P. MADHAVI DEVI ) JUDICIAL MEMBER HYDERABAD, DATED 11 TH MARCH , 20 20 . KV I.T.A. NO S . 166 TO 170/ HYD/1 9 IDEA CELLULAR LTD., HYD. 5 COPY FORWARDED TO: 1. DCIT 1, INTERNATIONAL TAXATION, 5 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, OPP. LB STATIDUM, HYDERABAD. 2 . IDEA CELLULAR LTD., H.NO. 5 - 9 - 62, KHAN LATEEF KHAN ESTATE, FATEHMAIDAN ROAD, NAMPALLY, HYDERABAD. 3 . CIT(A) - 1 0 , HYDERABAD. 4. 5. CIT (IT & TP) , HYDERABAD. THE DR, ITAT, HYDERABAD 6 . GUARD FILE