Dishnet Wireless Limited, CHENNAI V. DCIT, CHENNAI

ITA 327/CHNY/2014

• Counselvise Citation: 32721714 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 12-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Keywords: Recovery proceedings; Depreciation; Period of limitation; Advance ruling; Non-deduction of tax; Ignorance of law
• Section: 133A; 194C; 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.320, 321, 322, 323, 324, 325, 326, 327, 328 & 329/MDS/2014 & S.P. NOS.324, 325, 326, 327, 328, 329, 330, 331, 33 2 & 333/MDS/2015 (IN I.T.A. NOS.320 TO 329/MDS/2014) ( )( / ASSESSMENT YEARS : 2007-08 TO 2011-12 M/S DISHNET WIRELESS LIMITED, SPENCER PLAZA, 5 TH FLOOR, 769, ANNA SALAI, CHENNAI - 600 002. PAN : AAACD 5767 E V. THE DEPUTY COMMISSIONER OF INCOME TAX, TDS CIRCLE 1, CHENNAI - 600 034. (+,/ APPELLANT & -+( /PETITIONER) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. N. VENKATARAMAN, SR. COUNSEL FOR SH. R. VIJAYARAGHAVAN, ADVOCATE SH. PRABHAT LATH, CA SH. DEEPANKUR GANDHI, CA -.+, / 0 / RESPONDENT BY : DR. S. MOHARANA, CIT 1 / 2% / DATE OF HEARING : 21.05.2015 3') / 2% / DATE OF PRONOUNCEMENT : 20.07.2015 2 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE APPEALS AND STAY PETITIONS OF THE ASSESSE E ARE DIRECTED AGAINST THE COMMON ORDER PASSED BY THE COM MISSIONER OF INCOME TAX (APPEALS)-VII, CHENNAI, DATED 30.12.2013 AND PERTAIN TO ASSESSMENT YEARS 2007-08 TO 2011-12. THEREFORE, WE HEARD ALL THE APPEALS TOGETHER AND DISPOSING THE SAME BY THIS COMMON ORDER. 2. SHRI N. VENKATARAMAN, THE LD. SR. COUNSEL FOR TH E ASSESSEE, SUBMITTED THAT THE ASSESSEE-COMPANY IS ENGAGED ITSE LF IN THE BUSINESS OF PROVIDING TELECOMMUNICATION SERVICES, N AMELY, CELLULAR SERVICES, DATA ACCESS SERVICES, ETC. IN VARIOUS TEL ECOM CIRCLES IN THE COUNTRY. A SURVEY WAS CONDUCTED UNDER SECTION 133A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') AT THE RE GISTERED OFFICE OF THE ASSESSEE DURING THE FINANCIAL YEAR 2012-2013. SUBSEQUENTLY, THE ASSESSING OFFICER PASSED AN ORDER UNDER SECTION 201(1) AND 201(1A) OF THE ACT FOR THE ASSESSMENT YEARS 2007-08 TO 2011-12, HOLDING THAT THE ASSESSEE DEFAULTED IN DEDUCTION OF TAX IN THE FOLLOWING ACCOUNT:- (1) PROVISION FOR SITE RESTORATION EXPENSES (2) YEAR-END PROVISIONS 3 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 (3) ROAMING CHARGES 3. THE ASSESSEE CHALLENGED THE CORRECTNESS OF THE O RDERS PASSED BY THE ASSESSING OFFICER TREATING THE ASSESS EE AS ASSESSEE IN DEFAULT FOR NON-DEDUCTION OF TAX BEFORE THE CIT( APPEALS). HOWEVER, THE CIT(APPEALS) UPHELD THE ORDERS OF THE ASSESSING OFFICER. HENCE, THE ASSESSEE PREFERRED APPEALS BEF ORE THIS TRIBUNAL. 4. ACCORDING TO THE LD. SR. COUNSEL, THE ASSESSEE W AS DEDUCTING TAX REGULARLY AND FILING QUARTERLY STATEM ENT WITHIN THE TIME PRESCRIBED. REFERRING TO THE PROVISION FOR SITE RE STORATION EXPENSES, THE LD. SR. COUNSEL POINTED OUT THAT THE NATURE OF THE BUSINESS OF THE ASSESSEE REQUIRES TO TAKE PREMISES FROM OTHER LANDL ORDS ON LONG TERM LEASE FOR INSTALLING TELECOM EQUIPMENT SUCH AS TOWERS, ETC. GENERALLY THE ASSESSEE WOULD ENTER INTO LONG TERM L EASE FOR 20 YEARS WITH VARIOUS LANDLORDS. AS PER THE TERMS OF THE LEASE DEED, THE ASSESSEE WAS REQUIRED TO RESTORE THE LEASED PRE MISES ON AS IS BASIS UPON EXPIRY OF THE LEASE PERIOD. THE LD. SR. COUNSEL FURTHER CLARIFIED THAT ON TERMINATION OF LEASE AGREEMENT, T HE ASSESSEE WAS REQUIRED TO RESTORE THE PROPERTY TO THE LESSOR IN T HE SAME POSITION AS IT WAS EXISTING AT THE TIME WHEN THE LEASE WAS ENTE RED INTO. REFERRING TO CERTAIN LEASE AGREEMENTS, A COPY OF EA CH ARE AVAILABLE 4 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 AT PAPER-BOOK, THE LD. SR. COUNSEL POINTED OUT THAT UNDER PARA 5 LICENSOR COVENANTS, IT IS SPECIFICALLY MENTIONED THAT THE SAID AGREEMENT IS FOR A PERIOD OF 20 YEARS AND UNDER PAR A 6, IT WAS SPECIFICALLY MENTIONED THAT UPON TERMINATION OF THE LICENSE, THE LICENSEE SHALL LEAVE THE PREMISES AFTER RESTORING T HE SAME AS IS WHERE IS BASIS. IN FACT, ACCORDING TO THE LD. SR. COUNSEL, COPIES OF THIS AGREEMENT WERE ALSO SUBMITTED THAT BEFORE THE CIT(APPEALS) AND ASSESSING OFFICER. 5. SHRI N. VENKATARAMAN, THE LD. SR. COUNSEL, FURTH ER SUBMITTED THAT THE REVENUE AUTHORITIES DISALLOWED THE CLAIM O F THE ASSESSEE ON THE GROUND THAT ONCE AN EXPENDITURE WAS KEPT UNDER PROVISION, THE SAME WOULD FALL WITHIN THE AMBIT OF SECTION 194C OF THE ACT. THE REVENUE AUTHORITIES FOUND THAT IT IS TO BE PRESUMED THAT THE WORK HAD TO BE CARRIED OUT BY A CONTRACTOR AND THE PAYMENT F OR THAT WORK HAD BEEN DEFERRED TO A FUTURE DATE FALLING OUTSIDE THE RELEVANT ACCOUNTING YEAR. ACCORDING TO THE LD. SR. COUNSEL, ACCOUNTING STANDARD 29 ISSUED BY INSTITUTE OF CHARTERED ACCO UNTANTS OF INDIA, ENABLES THE ASSESSEE TO MAKE A PROVISION IN THE BOO KS OF ACCOUNT, ON AN ESTIMATE BASIS, WITH RESPECT TO AN EXPENDITUR E LIKE SITE RESTORATION EXPENSES. THE LD. SR. COUNSEL INVITED OUR ATTENTION TO ACCOUNTING STANDARD - 29 ISSUED BY INSTITUTE OF CHA RTERED 5 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 ACCOUNTANTS OF INDIA, MORE PARTICULARLY PARA 14 AND SUBMITTED THAT THE ACCOUNTING STANDARD CLEARLY RECOGNIZES A PROVIS ION WHEN AN ENTERPRISE HAS A PRESENT OBLIGATION AS A RESULT OF PAST EVENT. IT ALSO RECOGNIZES A RELIABLE ESTIMATE CAN BE MADE OF THE A MOUNT OF THE OBLIGATION. ACCORDING TO THE LD. SR. COUNSEL, IN F ACT, THE ASSESSEE MADE A PROVISION WITH REGARD TO SITE RESTORATION EX PENSES IN THE LIGHT OF THE ACCOUNTING STANDARD - 29 ISSUED BY THE INSTI TUTE OF CHARTERED ACCOUNTANTS OF INDIA. ACCORDING TO THE LD. SR. COU NSEL, THE SITE RESTORATION EXPENSES CREATES AN ASSET IN THE BOOKS OF ACCOUNT IN THE NAME OF ASSET RETIREMENT OBLIGATION AND SIMULTANE OUSLY A PROVISION IS CREATED OF THE SAME AMOUNT. THE LD. SR. COUNSEL FURTHER POINTED OUT THAT THE SAID ASSET FORMS PART OF DEPRECIATION SCHEDULE AS PER THE BOOKS OF ACCOUNT. 6. THE LD. SR. COUNSEL FOR THE ASSESSEE FURTHER SUB MITTED THAT THE ASSESSEE AT THE TIME OF PREPARATION OF RETURN O F INCOME ADDS BACK THE BOOK DEPRECIATION, INCLUDING THE DEPRECIAT ION CHARGED ON ASSET RETIREMENT OBLIGATION DEBITED TO PROFIT & L OSS ACCOUNT. THE LD. SR. COUNSEL FURTHER CLARIFIED THAT ASSET RETIR EMENT OBLIGATION DOES NOT FORM PART OF BLOCK OF ASSET. THEREFORE, T HE ASSESSEE DOES NOT CLAIM ANY TAX DEDUCTION FOR SITE RESTORATION EX PENSES / ASSET 6 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 RETIREMENT OBLIGATION IN ITS RETURN OF INCOME EITHE R THROUGH DEPRECIATION CHART OR OTHERWISE. 7. SHRI N. VENKATARAMAN, THE LD. SR. COUNSEL, FURTH ER SUBMITTED THAT THE EXPENDITURE ON SITE RESTORATION WILL BE IN CURRED ONLY UPON THE EXPIRY OF THE LEASE TERM AND IT IS ONLY AT THAT POINT OF TIME THE VARIOUS PARTIES / CONTRACTORS WOULD BE ENGAGED FOR DISMANTLING THE TOWERS INSTALLED AND RESTORED THE BUILDING TO ITS O RIGINAL POSITION. ACCORDING TO THE LD. SR. COUNSEL, THE ASSESSEE MAY ALSO SET UP ITS OWN DEPARTMENT TO UNDERTAKE THE WORK OF DISMANTLING AND RESTORATION WORK. THEREFORE, ACCORDING TO THE LD. SR. COUNSEL, AT THE TIME OF PROVISION IN THE BOOKS OF ACCOUNT, NO SERVI CE HAS BEEN RECEIVED BY THE ASSESSEE. ACCORDINGLY, THERE WAS N O LIABILITY TOWARDS ANY PARTY FOR MAKING PAYMENTS. ACCORDING T O THE LD. SR. COUNSEL, WHEN THE EXPENSES ACTUALLY INCURRED AND TH E PAYMENTS WERE MADE TO THE RESPECTIVE CONTRACTORS, IF ANY, TH E TAX WILL BE DEDUCTED AND PAID TO THE GOVERNMENT. HOWEVER, WHEN THE PROVISION WAS MADE IN THE BOOKS OF ACCOUNT, THE PLA CE, POINT OF TIME AT WHICH THE EXPENSES WILL BE ACTUALLY INCURRED ARE NOT KNOWN. MOREOVER, IT IS ALSO NOT KNOWN WHO WILL BE THE CON TRACTOR AND WHAT WILL BE THE AMOUNT REQUIRED TO BE PAID FOR RESTORAT ION. IN FACT, ACCORDING TO THE LD. SR. COUNSEL, THE EXPENSES REQU IRED TO BE 7 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 INCURRED ONLY AFTER THE EXPIRY OF LEASE PERIOD WHIC H WOULD NORMALLY BE ABOUT 20 YEARS. THEREFORE, THE ASSESSEE IS NOT WITHIN ITS KNOWLEDGE THE CONTRACTOR WHO IS LIKELY TO BE ENGAGE D AFTER 20 YEARS AND HOW MUCH AMOUNT IS LIKELY TO BE PAID TO THE CON TRACTOR. THE LD. SR. COUNSEL FURTHER POINTED OUT THAT AFTER MAKING P ROVISION, MAJORITY OF THE SITE RESTORATION EXPENSES WAS REVERSED IN TH E FINANCIAL YEAR 2010-11 AND THE DETAILS OF SUCH REVERSALS WERE FURN ISHED BEFORE THE CIT(APPEALS). EVEN BEFORE THIS TRIBUNAL, ACCORDING TO THE LD. SR. COUNSEL, SUCH DETAILS ARE AVAILABLE AT PAGE 181 OF THE ASSESSEES PAPER-BOOK. 8. SHRI N. VENKATARAMAN, THE LD. SR. COUNSEL FOR TH E ASSESSEE, FURTHER SUBMITTED THAT SINCE THE ASSESSEE COULD NOT IDENTIFY THE CONTRACTOR AND COULD NOT QUANTIFY THE AMOUNT TO BE PAID TO THE CONTRACTOR FOR DEMOLITION OF TOWER AND RESTORE THE SITE, THE ENTIRE MECHANISM FOR DEDUCTION OF TAX AT SOURCE WOULD FAIL . IN OTHER WORDS, ACCORDING TO THE LD. SR. COUNSEL, THE ASSESSEE COUL D NOT IDENTIFY THE CONTRACTOR AND THE AMOUNT OF EXPENSES THAT WOULD B E INCURRED AFTER 20 YEARS. THEREFORE, A PROVISION MADE IN THE BOOKS OF ACCOUNT BY FOLLOWING THE ACCOUNTING STANDARD - 29 DOES NOT REQ UIRE THE ASSESSEE TO DEDUCT TAX IN RESPECT OF SITE RESTORATI ON EXPENSES. 8 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 9. SHRI N. VENKATARAMAN, THE LD. SR. COUNSEL, FURTH ER SUBMITTED THAT SECTIONS 194C AND 194J OF THE ACT REQUIRE TO D EDUCT TAX IN CASE ANY AMOUNT IS CREDITED TO A SUSPENSE ACCOUNT IN THE BOOKS OF A PERSON LIABLE TO PAY SUCH AMOUNT. THE PRIMARY INTE NT OF INTRODUCING EXPLANATION TO SECTION 194C WAS TO NULLIFY THE PRAC TICE PREVAILING AT THAT POINT OF TIME WHEREIN THE TDS PROVISIONS WERE BEING CIRCUMVENTED BY THE PAYERS BY ADOPTING A DEVICE OF CREDITING THE SUM PAYABLE TO PAYEE OR ANY OTHER ACCOUNT. THE LD. SR. COUNSEL FURTHER POINTED OUT THAT EVEN AFTER INTRODUCTION OF EXPLANATION TO SECTION 194C OF THE ACT, TAX WAS REQUIRED TO BE DED UCTED ONLY IN SUCH CASES WHERE THERE IS A CONSTRUCTIVE CREDIT TO THE ACCOUNT OF THE PAYEE OF A SPECIFIED AMOUNT CALCULATED IN ACCORDANC E WITH THE TERMS AND CONDITIONS OF THE ARRANGEMENTS ENTERED IN TO WITH THE PAYEE. REFERRING TO THE CIRCULAR DATED 8.11.1978 I SSUED BY CBDT, THE HIGHEST ADMINISTRATIVE BODY UNDER THE INCOME-TA X ACT, THE LD. SR. COUNSEL POINTED OUT THAT TAX WOULD BE DEDUCTED AT SOURCE IN RESPECT OF THE PROVISION CREATED UNDER MERCANTILE S YSTEM OF ACCOUNTING ONLY WHEN THE PAYEE IS IDENTIFIED AND TH E SUM PAYABLE IS ALSO ASCERTAINED. THE CREDIT SHOULD BE A CONSTRUCT IVE CREDIT TO THE ACCOUNT OF THE PAYEE. IN THE CASE BEFORE US, ACCOR DING TO THE LD. SR. COUNSEL, THE PAYEE IS NOT IDENTIFIED AND IT IS NOT KNOWN WHICH CONTRACTOR WOULD BE ENGAGED BY THE ASSESSEE FOR DEM OLITION OF THE 9 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 TOWER AND RESTORATION OF THE CITE. THE SUM PAYABLE TO THE CONTRACTOR IS ALSO NOT ASCERTAINED. IN THOSE CIRCUMSTANCES, A CCORDING TO THE LD. SR. COUNSEL, THE ASSESSEE IS NOT LIABLE TO DEDU CT TAX IN RESPECT OF THE PROVISION MADE FOR SITE RESTORATION EXPENSES. SINCE THE ASSESSEE IS NOT AWARE OF THE PAYEE, THERE IS NO QUE STION OF DEDUCTION OF TAX. 10. SHRI N. VENKATARAMAN, THE LD. SR. COUNSEL FOR T HE ASSESSEE, INVITED OUT ATTENTION TO FORM 16A FRAMED BY CBDT UN DER RULE 31(1)(B) OF THE INCOME-TAX RULES, 1962 AND SUBMITTE D THAT FORM 16A SPECIFICALLY REQUIRES THE ASSESSEE TO INDICATE NAME AND ADDRESS OF THE DEDUCTEE AND THE PAN OF THE DEDUCTEE . IT ALSO REQUIRES THE ASSESSEE TO SPECIFY THE AMOUNT PAID OR CREDITED. APART FROM THIS, THE ASSESSEE IS ALSO REQUIRED TO MENTION THE DATE ON WHICH THE PAYMENT WAS MADE. IN THIS CASE, ACCORDIN G TO THE LD. SR. COUNSEL, THE ASSESSEE HAS NOT IDENTIFIED THE CONTRA CTOR SOFAR, THEREFORE, THE ASSESSEE COULD NOT DISCLOSE IN FORM 16A THE NAME AND ADDRESS OF THE DEDUCTEE. SIMILARLY, THE PAN OF DEDUCTEE COULD NOT ALSO BE INFORMED TO THE DEPARTMENT. SINCE THE AMOUNT PAYABLE TO THE CONTRACTOR IS NOT ASCERTAINABLE, THE ASSESSE E MAY NOT BE IN A POSITION TO DECLARE THE AMOUNT PAID/CREDITED TO THE DEPARTMENT. APART FROM THEM, THE DATE OF PAYMENT/CREDIT ALSO CO ULD NOT BE 10 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 INFORMED SINCE NO PAYMENT WAS MADE AND AMOUNT WAS N OT CREDITED IN FAVOUR OF ANY PARTICULAR INDIVIDUAL/PERSON. THE REFORE, ACCORDING TO THE LD. SR. COUNSEL, THE ENTIRE MACHINERY FOR TDS W OULD FAIL IN RESPECT OF THE PROVISION MADE BY THE ASSESSEE FOR S ITE RESTORATION EXPENSES. 11. SIMILARLY, THE LD. SR. COUNSEL SUBMITTED THAT I N RESPECT OF YEAR-END PROVISIONS, THE ASSESSEE COULD NOT IDENTIF Y THE PAYEE AND COULD NOT ASCERTAIN THE SUM PAYABLE. THEREFORE, TH E ASSESSEE IS NOT EXPECTED TO DEDUCT TAX AT THE TIME OF MAKING PR OVISION. THE LD. SR. COUNSEL PLACED HIS RELIANCE ON THE JUDGMENT OF DELHI HIGH COURT IN UCO BANK V. UNION OF INDIA & OTHERS IN WP(C) 356 3/2012 AND SUBMITTED THAT IN THE CASE BEFORE THE DELHI HIGH CO URT, CERTAIN DEPOSITS WERE MADE WITH A BANK IN THE NAME OF REGIS TRAR GENERAL OF HIGH COURT, IN TERMS OF DIRECTIONS ISSUED BY THE HI GH COURT. THE ISSUE AROSE BEFORE THE DELHI HIGH COURT WAS WHETHER THE BANKS ARE REQUIRED TO DEDUCT TAX AT SOURCE AND ISSUE CERTIFIC ATES IN THE NAME OF REGISTRAR GENERAL. THE DELHI HIGH COURT FOUND THAT NO TDS IS REQUIRED TO BE DEDUCTED AS THE ULTIMATE BENEFICIARY OR PAYEE IS NOT IDENTIFIABLE. THE LD. SR. COUNSEL FILED A COPY OF THE JUDGMENT OF THE DELHI HIGH COURT. 11 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 12. SHRI N. VENKATARAMAN, THE LD. SR. COUNSEL, INVI TED OUR ATTENTION TO SECTION 194A OF THE ACT AND SUBMITTED THAT THE EXPRESSION PAYEE UNDER SECTION 194A OF THE ACT WO ULD ONLY MEAN THE RECIPIENT OF THE INCOME WHOSE ACCOUNT IS MAINTA INED BY THE PERSON PAYING THE INTEREST. IN THE PRESENT CASE, A CCORDING TO THE LD. SR. COUNSEL, ALTHOUGH THE FD IS MADE IN THE NAME OF THE REGISTRAR GENERAL, THE ACCOUNT REPRESENTS FUNDS, WHICH ARE IN CUSTODY OF THE COURT AND THE REGISTRAR GENERAL IS NEITHER THE RECI PIENT OF THE AMOUNT CREDITED TO THAT ACCOUNT NOR THE INTEREST AC CRUING THEREON. THEREFORE, THE DELHI HIGH COURT FOUND THAT THE REGI STRAR GENERAL CANNOT BE CONSIDERED AS A PAYEE FOR THE PURPOSE OF SECTION 194A OF THE ACT. THE CREDIT BY THE PETITIONER BANK IN THE NAME OF REGISTRAR GENERAL WOULD NOT ATTRACT THE PROVISIONS OF SECTION 194A OF THE ACT. THE LD. SR. COUNSEL FURTHER POINTED OUT THAT THERE IS NO ASSESSEE TO WHOM INTEREST INCOME FROM THE DEPOSITS IN QUESTION CAN BE PAID, NO PERSON CAN FILE A RETURN CLAIMING THE INTEREST PAYA BLE BY THE PETITIONER AS INCOME. THEREFORE, THE DELHI HIGH CO URT FOUND THAT THE TDS IS NOT BE DEDUCTED. IN THIS CASE ALSO, ACCORDI NG TO THE LD. SR. COUNSEL, THE PAYEE IS NOT IDENTIFIED AND NO PERSON COULD CLAIM THE AMOUNT PAYABLE BY THE ASSESSEE BY FILING RETURN OF INCOME AS FOUND BY THE DELHI HIGH COURT. THE LD. SR. COUNSEL SUBMI TTED THAT A SITUATION WOULD BE CREATED FOR RECOVERY OF TAX WITH OUT CORRESPONDING 12 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 INCOME BEING ASSESSED IN THE HANDS OF ANY PERSON. THE LD. SR. COUNSEL ALSO PLACED HIS RELIANCE ON THE DECISION OF MUMBAI BENCH OF THIS TRIBUNAL IN INDUSTRIAL DEVELOPMENT BANK OF INDIA V. ITO (2007) 293 ITR (AT) 267. THE LD. SR. COUNSEL ALSO PLACED RELIANCE ON THE DECISION OF BANGALORE BENCH OF THIS TRIBUNAL IN DCIT V. TELCO CONSTRUCTION EQUIPMENT CO. LIMITED IN I.T.A. NO.478 /BANG/2012, A COPY OF WHICH IS FILED BY THE LD. SR. COUNSEL. 13. SHRI N. VENKATARAMAN, THE LD. SR. COUNSEL FOR T HE ASSESSEE, FURTHER POINTED OUT THAT THE PROVISIONS OF SECTIONS 194A AND 194H OF THE ACT ARE PARI MATERIA TO EXPLANATION IN SECTION 194C AND 194J OF THE ACT. THEREFORE, THE RATIO OF THE ABOVE DECISIO N WOULD APPLY TO THE ASSESSEE ALSO. 14. NOW COMING TO THE YEAR-END PROVISIONS, SHRI N. VENKATARAMAN, THE LD. SR. COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE ENGAGES VARIOUS SERVICE PROVIDERS FOR RENDERING SERVICES LIKE ADDRESS VERIFICATION, CREDIT CERTIFIC ATION, CONTENT DEVELOPMENT, ETC. AT THE YEAR END, TO CLOSE THE BO OKS OF ACCOUNT, THE ASSESSEE ESTIMATES THE AMOUNT OF EXPENDITURE IN CURRED IN THE MONTH OF MARCH WITH RESPECT TO VARIOUS SERVICES REN DERED BY THE SERVICE PROVIDERS FOR WHICH INVOICES ARE YET TO BE RECEIVED BY THE ASSESSEE. ACCORDING TO THE LD. SR. COUNSEL, THE PR OVISIONS ARE 13 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 MADE ON ESTIMATE BASIS AS IT IS NOT IDENTIFIABLE WH AT AMOUNT IS TO BE PAID TO SUCH SERVICE PROVIDERS. IN OTHER WORDS, AC CORDING TO THE LD. SR. COUNSEL, THE PAYEE IS NOT IDENTIFIED AND THE AM OUNT TO BE PAID IS ALSO NOT ASCERTAINABLE. THEREFORE, ACCORDING TO TH E LD. SR. COUNSEL, THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX IN RESPECT OF PROVISION MADE FOR YEAR-END EXPENDITURE. THE LD. SR. COUNSEL FURT HER POINTED OUT THAT WHEN THE NEW CONNECTIONS ARE OFFERED THROUGHOU T INDIA IN THE MONTH OF MARCH AND THE SERVICE PROVIDERS WOULD COND UCT CUSTOMER VERIFICATIONS. AT THE YEAR END, THE ASSESSEE WOULD KNOW HOW MANY NUMBER OF CONNECTIONS ARE OFFERED IN THE MONTH OF M ARCH. HOWEVER, THE ASSESSEE WOULD NOT KNOW AS TO HOW MANY CUSTOMER VERIFICATIONS HAVE BEEN DONE WITH EACH SERVICE PROV IDER ENGAGED BY THE ASSESSEE. THEREFORE, THE ASSESSEE WOULD NOT KN OW THE EXACT AMOUNT PAYABLE TO THE ABOVE SAID SERVICE PROVIDERS. THEREFORE, THE ASSESSEE BY AN OVERALL BASIS, ESTIMATES THE CUSTOME R VERIFICATIONS EXPENDITURE IN RELATION TO EXPENDITURE INCURRED IN THE PAST AND MAKE NECESSARY PROVISION IN THE ACCOUNT. THE LD. SR. CO UNSEL FURTHER CLARIFIED THAT THE AMOUNT IS NOT PAID OR CREDITED I N ANY PARTICULAR ACCOUNT, ONLY A PROVISION WAS MADE IN THE ACCOUNT. ACCORDING TO THE LD. SR. COUNSEL, SINCE THE NAME OF THE PAYEE A ND THAT THE NAME OF SERVICE PROVIDERS ARE NOT IDENTIFIABLE IN THE MO NTH OF MARCH, THE ASSESSEE WAS UNABLE TO DEDUCT TAX AT SOURCE IN THE MONTH OF MARCH. 14 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 HOWEVER, AS AND WHEN THE SERVICE PROVIDERS RAISE AN INVOICE, THE ASSESSEE DULY DEDUCTS THE TDS AT SOURCE AND DISCHAR GES THE OBLIGATION CAST UPON IT. 15. NOW COMING TO ROAMING CHARGES, SHRI N. VENKATAR AMAN, THE LD. SR. COUNSEL FOR THE ASSESSEE, SUBMITTED THAT RO AMING IS A FACILITY PROVIDED BY THE CELLULAR PROVIDER TO ITS CUSTOMERS AUTOMATICALLY TO CONNECT AND RECEIVE VOICE CALLS. THE LD. SR. COUNS EL CLARIFIED THAT WHEN A CUSTOMER OF ONE CIRCLE VISITS ANOTHER TELECO M CIRCLE, HE WOULD BE AUTOMATICALLY CONNECTED WITH OTHER SERVICE PROVIDER IN THE VISITING CIRCLE AND HE CAN MAKE AND RECEIVE VOICE C ALLS AND ACCESS DATA AND OTHER SERVICES WITHOUT ANY HUMAN INTERVENT ION. SIMILARLY, WHEN A CUSTOMER TRAVELS OUTSIDE THE GEOGRAPHICAL AR EA, EVEN OUTSIDE INDIA, HE CAN HAVE THE SERVICES WITHOUT ANY HUMAN INTERVENTION AUTOMATICALLY. THE LD. SR. COUNSEL FU RTHER POINTED OUT THAT WHEN A SUBSCRIBER OF A MOBILE PHONE IN THE STA TE OF ASSAM GOES TO AHMEDABAD, SUCH SUBSCRIBER WILL BE AUTOMATI CALLY ABLE TO MAKE AND RECEIVE VOICE CALLS, SEND AND RECEIVE DATA OR ACCESS OTHER SERVICES WITH THE HELP OF TELECOM SERVICE PRO VIDER AT TELECOM CIRCLE IN AHMEDABAD WITH WHICH THE ASSESSEE HAS ALR EADY ENTERED INTO A BILATERAL ROAMING AGREEMENT. THE ASSESSEE H AS ALSO ENTERED 15 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 INTO SAME AGREEMENT WITH VARIOUS OTHER TELECOM PROV IDES LIKE BHARTI AIRTEL, VODAFONE, TATA, IDEA, ETC. 16. REFERRING TO THE JUDGMENT OF THE APEX COURT IN CIT V. BHARTI CELLULAR LIMITED (330 ITR 239), THE LD. SR. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE WORD TECHNICAL IS PRECEDED BY THE WORD MANAGERIAL AND SUCCEEDED BY THE WORD CONSULTANCY . THEREFORE, SECTION 9(1)(VII) OF THE ACT HAS TO BE INTERPRETED BY THE EXPRESSION FROM THE SURROUNDING WORD, I.E. FROM THE CONTEXT. ACCORDING TO THE LD. SR. COUNSEL, THE WORD TECHNICAL WOULD TAKE IT S COLOUR FROM THE WORD MANAGERIAL AND CONSULTANCY. MANAGERIAL SE RVICES AND TECHNICAL SERVICES CAN BE GIVEN BY HUMAN ONLY AND N OT BY MEANS OF ANY EQUIPMENT. THEREFORE, THE WORD TECHNICAL HAS TO BE CONSTRUED IN THE SAME SENSE INVOLVING DIRECT HUMAN INVOLVEMEN T WITHOUT WHICH THE TECHNICAL SERVICES CANNOT BE HELD TO HAVE BEEN RENDERED. THE LD. SR. COUNSEL INVITED OUR ATTENTION TO AN OBS ERVATION MADE BY THE APEX COURT AND SUBMITTED THAT WHENEVER THE SERV ICES RENDERED WITHOUT DIRECT HUMAN INVOLVEMENT, IT CANNOT BE CONS TRUED TO BE A TECHNICAL SERVICE. THE LD. SR. COUNSEL HAS PLACED HIS RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN SKYCELL COMMUN ICATION LIMITED V. CIT (119 TAXMAN 496) AND SUBMITTED THAT THE TELECOM SERVICES ARE NOT IN THE NATURE OF TECHNICAL SERVICE S. 16 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 17. SHRI N. VENKATARAMAN, THE LD. SR. COUNSEL FOR T HE ASSESSEE, FURTHER SUBMITTED THAT IN THE CASE BEFORE APEX COUR T IN BHARTI CELLULAR LIMITED (SUPRA), THE REVENUE AUTHORITIES O BTAINED EXPERT OPINION FROM SUB-DIVISIONAL ENGINEER OF BSNL IN RES PECT OF THE NATURE OF SERVICE RENDERED BY THE TELECOM SERVICE P ROVIDERS. THE SUB-DIVISIONAL ENGINEER OF BSNL CATEGORICALLY STATE D THAT NO HUMAN INTERVENTION IS REQUIRED WHILE RENDERING ROAMING SE RVICES. HE CLARIFIED THAT HUMAN INTERVENTION IS REQUIRED FOR D OING NECESSARY CONFIGURATIONS FOR PROVIDING ROAMING SERVICES. ONC E CONFIGURATION IS COMPLETED, IT IS NOT REQUIRED. IN VIEW OF THE ABOV E CLARIFICATION OF AN EXPERT IN THE FIELD, ACCORDING TO THE LD. SR. COUNS EL, SINCE THE ROAMING SERVICES ARE PROVIDED WITHOUT HUMAN INTERVE NTION, IT CANNOT BE CONSIDERED FOR TECHNICAL SERVICE. THE HUMAN IN TERVENTION IS REQUIRED, ACCORDING TO THE LD. SR. COUNSEL, WHENEVE R CUSTOMERS ARE FACING PROBLEMS DURING ROAMING. THE LD. SR. COUNSE L FURTHER POINTED OUT THERE ARE MILLIONS OF CALLS WHICH FLOW FROM ONE NETWORK TO ANOTHER NETWORK EVERY MINUTE AND CONNECTING THEM MANUALLY IS BEYOND HUMAN CAPABILITY. ACCORDING TO THE LD. SR. COUNSEL, HUMAN INTERVENTION IS REQUIRED ONLY AT THE TIME OF MAINTE NANCE OR AT THE TIME CERTAIN TECHNICAL DEFECT THAT MIGHT HAVE COME INTO TELECOM 17 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 NETWORK/EQUIPMENTS. ACCORDING TO THE LD. SR. COUNS EL, THE CUSTOMERS PAY FOR ROAMING CHARGES AND NOT FOR HUMAN INTERVENTION. 18. PLACING RELIANCE ON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN IGATE COMPUTER SYSTEMS LIMITED V. DCIT IN I.T.A. NOS. 1301 TO 1303 AND 1616/PN/2013, THE LD. SR. COUNSEL SUBMITTED THAT MERELY BECAUSE HUMAN INTERVENTION IS REQUIRED FOR M AINTENANCE THAT CANNOT LEAD TO THE CONCLUSION THAT THE SERVICES REN DERED ARE TECHNICAL SERVICES WITHIN THE MEANING OF SECTION 19 4J OF THE ACT. ACCORDING TO THE LD. SR. COUNSEL, WHILE PROVIDING R OAMING FACILITY TO ITS CUSTOMERS, THE ASSESSEE IN FACT UTILIZING THE S TANDARD FACILITIES PROVIDED BY THE OTHER TELECOM SERVICE PROVIDER WHIC H CONNECTS AUTOMATICALLY ONCE THE NECESSARY CONFIGURATIONS WER E MADE IN THE SYSTEM. APART FROM THAT, THE RECIPIENTS OF THE AMO UNT ALSO CONFIRMS THAT THEY HAVE INCLUDED THE AMOUNT RECEIVED TOWARDS ROAMING CHARGES IN THEIR TOTAL INCOME AND FILED RETURN BEFO RE THE RESPECTIVE ASSESSING OFFICERS. IN FACT, THE ASSESSEE HAS FILE D AS MANY AS 100 CERTIFICATES BEFORE THE LOWER AUTHORITIES. PLACING RELIANCE ON THE JUDGMENT OF THE APEX COURT IN HINDUSTAN COCA COLA B EVERAGES V. CIT (293 ITR 226), THE LD. SR. COUNSEL SUBMITTED TH AT ONCE THE RECIPIENTS PAID THE TAX BY INCLUDING THE AMOUNT IN THE TOTAL INCOME, THERE CANNOT BE ANY REASON TO TREAT THE ASSESSEE AS ASSESSEE IN 18 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 DEFAULT. THE LD. SR. COUNSEL FURTHER SUBMITTED THA T IT IS ALSO AN OBLIGATION OF THE TDS OFFICER TO VERIFY WHETHER THE RECIPIENT HAS PAID THE TAXES AS REQUIRED UNDER THE INCOME-TAX ACT. TH E LD. SR. COUNSEL PLACED HIS RELIANCE ON SPECIAL BENCH DECISI ON OF THIS TRIBUNAL IN MAHINDRA & MAHINDRA LIMITED V. DCIT (20 09) (313 ITR (AT) 263) AND JUDGMENT OF ALLAHABAD HIGH COURT IN J AGRAN PRAKASHAN LIMITED V. DCIT (345 ITR 288) AND JUDGMEN T OF KARNATAKA HIGH COURT IN RAMCO (BHEL) HOUSE BUILDING CO-OPERATIVE SOCIETY LIMITED V. ITO IN W.P. NO.17037-43/2014. T HEREFORE, ACCORDING TO THE LD. SR. COUNSEL, THE ROAMING CHARG ES CANNOT BE CATEGORIZED AS FEE FOR TECHNICAL SERVICES AND HENCE , THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX. 19. SHRI N. VENKATARAMAN, THE LD. SR. COUNSEL FOR T HE ASSESSEE, FURTHER SUBMITTED THAT ORDERS FOR THE FIRST THREE Y EARS AND THREE QUARTERS OF THE FOURTH YEAR ARE BARRED BY LIMITATIO N. ACCORDING TO THE LD. SR. COUNSEL, UNDER SECTION 201(3)(I) OF THE ACT , THE ASSESSING OFFICER IS EXPECTED TO PASS AN ORDER WITHIN TWO YEA RS FROM THE END OF THE FINANCIAL YEAR IN WHICH QUARTERLY STATEMENT WAS FILED. APART FROM THAT, SECTION 201(3)(II) OF THE ACT FURTHER PR OVIDES THAT NO ORDER CAN BE PASSED BEYOND SIX YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE PAYMENT IS MADE OR CREDIT IS GIVEN, IN AN Y OTHER CASE. 19 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 ACCORDING TO THE LD. SR. COUNSEL, ALL THE QUARTERLY STATEMENTS HAVE BEEN FILED BY THE ASSESSEE WITHIN THE TIME LIMIT, H ENCE, THE FIRST THREE YEARS AND THREE QUARTERS OF THE FOURTH YEAR, THE ORDERS PASSED BY THE TDS OFFICER, IN THE MONTH OF MARCH, 2003, AR E BEYOND PRESCRIBED TIME LIMIT. THEREFORE, IT IS BARRED BY TIME LIMIT. THE LD. SR. COUNSEL FURTHER SUBMITTED THAT FOR THE FIRST TW O YEARS, THE ORDERS ARE PASSED BEYOND THE STIPULATED TIME LIMIT OF MARC H, 201(1). THEREFORE, IT WAS ALSO BARRED BY LIMITATION. REFER RING TO THE AMENDMENT BROUGHT IN BY FINANCE ACT, 2014, THE LD. SR. COUNSEL SUBMITTED THAT LIMITATIONS FOR PASSING THE ORDER UN DER SECTIONS 201(1) AND 201(1A) OF THE ACT HAVE BEEN EXTENDED TO SEVEN YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH PAYMENT IS MADE OR CREDIT IS GIVEN. THIS PROVISION IS APPLICABLE PROS PECTIVELY WITH EFFECT FROM 1.10.2014. THEREFORE, THE AMENDED PROVISIONS OF SECTIONS 201(1) AND 201(1A) CANNOT BE MADE APPLICABLE FOR TH E ASSESSMENT YEARS UNDER CONSIDERATION. 20. ON THE CONTRARY, DR. S. MOHARANA, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE DEFAULT ED TO DEDUCT TAX IN RESPECT OF PROVISION FOR SITE RESTORATION EXPENS ES, YEAR-END PROVISIONS AND ROAMING CHARGES. THEREFORE, THE ASS ESSING OFFICER TREATED THE ASSESSEE AS ASSESSEE IN DEFAULT UNDER S ECTIONS 201(1) 20 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 AND 201(1A) OF THE ACT. ACCORDING TO THE LD. D.R., IN RESPECT OF SITE RESTORATION, THE ASSESSEE DUE TO MISCONCEPTION OF A CCOUNTING STANDARD/PRINCIPLE TO CIRCUMVENT THE STATUTORY OBLI GATION, FAILED TO DEDUCT TAX ON THE PROVISIONS MADE IN SITE RESTORATI ON EXPENSES. ACCORDING TO THE LD. D.R., NO ACCOUNTING STANDARD H AS BEEN CREATED TO OVERRIDE THE SPECIFIC PROVISIONS OF INCO ME-TAX ACT. EVEN OTHERWISE, ACCORDING TO THE LD. D.R., ACCOUNTING ST ANDARD CANNOT OVERRIDE THE SPECIFIC PROVISIONS OF THE ACT. THE L D. D.R. FURTHER SUBMITTED THAT PROVISION CAN BE MADE IN THE BOOKS O F ACCOUNT ONLY WHEN ACTUAL LIABILITY OF EXPENDITURE HAS ACCRUED BU T COULD NOT BE SPENT WITHIN THE RELEVANT ACCOUNTING YEAR FOR BONAF IDE REASONS. HOWEVER, THE EXPENDITURE KEPT IN PROVISION SHOULD B E SPENT IMMEDIATELY IN THE ENSUING DAYS OF SUCCEEDING FINAN CIAL YEAR. IN CASE THE EXPENDITURE IS INDEFINITELY KEPT UNDER PRO VISION, THEN THE PURPOSE OF ACCOUNTING SYSTEM WOULD BE DEFEATED. TH EREFORE, ACCORDING TO THE LD. D.R., ONCE AN EXPENDITURE IS K EPT UNDER PROVISION, THE SAME WOULD FALL WITHIN THE AMBIT OF SECTION 194C OF THE ACT. IN OTHER WORDS, IT HAS TO BE PRESUMED THA T THE WORK HAD TO BE CARRIED OUT BY A CONTRACTOR AND THE PAYMENT FOR THAT WORK HAS TO BE DEFERRED TO A FUTURE DATE FALLING OUTSIDE THE PE RIOD OF RELEVANT ACCOUNTING YEAR. REFERRING TO SECTION 194C(2) OF T HE ACT, THE LD. D.R. SUBMITTED THAT CLAUSE (IV) OF SECTION 194C(2) TAKES CARE OF THIS 21 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 KIND OF SITUATION. BY VIRTUE OF THESE PROVISIONS, IT IS CRYSTAL CLEAR THAT IF ANY AMOUNT OF LIABILITY PAYABLE TO THE CONTRACTO RS IS CREDITED TO ANY ACCOUNT, BY WHATEVER NAME IT IS CALLED, THEN THE AS SESSEE IS LIABLE TO DEDUCT TAX AS REQUIRED UNDER SECTION 194C OF THE ACT. THEREFORE, ACCORDING TO THE LD. D.R., THE CONTENTION OF THE AS SESSEE THAT IT IS ONLY AN PROVISION IS NOT JUSTIFIED. THE LD. D.R. PLACED HIS RELIANCE ON THE JUDGMENT OF THE ALLAHABAD HIGH COURT IN CIT V. BRITISH INDIA CORPORATION (P.) LTD. (1973) 92 ITR 38 AND ALSO ON THE JUDGMENT OF MADRAS HIGH COURT IN CWT V. CROMPTON ENGINEERING CO . (MADRAS) LTD. (1983) 140 ITR 320. 21. REFERRING TO THE ISSUE OF YEAR-END OF PROVISION S, THE LD. D.R. POINTED OUT THE ASSESSEE MADE PROVISION FOR ADDRESS VERIFICATIONS, CREDIT CERTIFICATION CHARGES, ICU CHARGES AND LEASE LINE EXPENSES. THE CONTENTION OF THE ASSESSEE IS THAT THE PAYEES A RE NOT IDENTIFIABLE. THE LD. D.R. POINTED OUT THAT THE AS SESSEE ENGAGED SERVICES FROM OUTSOURCE SERVICE PROVIDERS. THEREFO RE, THE CONTENTION OF THE ASSESSEE THAT THE SERVICE PROVIDE RS ARE NOT IDENTIFIABLE IS NOT ACCEPTABLE. 22. REFERRING TO THE ROAMING CHARGES, THE LD. D.R. POINTED OUT THAT THE ASSESSEE HAD ARRANGEMENT WITH OTHER CELLUL AR SERVICE PROVIDERS OUTSIDE THE HOME NETWORK. IN CASE THE SU BSCRIBER OF THE 22 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 SERVICE PROVIDER TRAVELS OUTSIDE THE JURISDICTION O F THE HOME NETWORK OPERATOR, THE SUBSCRIBER WOULD GET SERVICE FROM BOT H THE HOST- OPERATOR AND HOME-OPERATOR. THE HOST-OPERATOR CHAR GES THE HOME- OPERATOR FOR PROVIDING TELECOM SERVICE TO THE LATTE R. ROAMING FACILITY IS MADE AVAILABLE TO SUBSCRIBERS BY THE HOST-OPERAT OR BY VIRTUE OF ROAMING ARRANGEMENT ENTERED INTO BETWEEN THE HOME-O PERATOR AND HOST-OPERATOR. THEREFORE, ACCORDING TO THE LD. D.R ., THE ROAMING CHARGES ARE NOTHING BUT THE PAYMENTS MADE BY THE AS SESSEE TO OTHER TELECOM SERVICE PROVIDER FOR RENDERING TECHNI CAL SERVICES TO THE ASSESSEE WHICH WOULD IN TURN BE USED BY THE SUB SCRIBERS OF THE ASSESSEE DURING ROAMING. REFERRING TO THE EXPERT O PINION SAID TO BE OBTAINED FROM THE SUB-DIVISIONAL ENGINEER OF BSNL, THE LD. D.R. POINTED OUT THAT REGARDING INTERCONNECTIVITY, INITI ALLY HUMAN INTERVENTION IS REQUIRED FOR ESTABLISHING THE PHYSI CAL CONNECTIVITY AND ALSO FOR DOING THE REQUIRED CONFIGURATION. THEREFO RE, IT CANNOT BE CORRECT TO SAY THAT HUMAN INTERVENTION IS NOT REQUI RED FOR CONNECTING THE SUBSCRIBERS CALL DURING THEIR VISIT TO OTHER S ERVICE PROVIDERS AREA. REFERRING TO THE JUDGMENT OF THE MADRAS HIGH COURT IN SKYCELL COMMUNICATIONS LTD. (SUPRA), THE LD. D.R. POINTED O UT THAT THE CASE BEFORE MADRAS HIGH COURT WAS FOR USE OF SERVICE BY A MOBILE SUBSCRIBER. IN THE CASE BEFORE US, ONE OF THE OPER ATORS PROVIDED TECHNICAL SERVICE TO ANOTHER OPERATOR. THEREFORE, THE JUDGMENT OF 23 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 THE MADRAS HIGH COURT IN SKYCELL COMMUNICATIONS LTD . (SUPRA) MAY NOT BE APPLICABLE TO THE FACTS OF THE CASE. REFERR ING TO THE DECISION OF AUTHORITY FOR ADVANCE RULINGS IN AJMER VIDYUT VI TRAN NIGAM LTD. (2012) 24 TAXMANN.COM 300, THE LD. D.R. SUBMITTED T HAT THE ELECTRICITY TRANSMISSION CORPORATION MADE PAYMENT T O ANOTHER COMPANY TO ENSURE CONSTANT VOLTAGE AT DISTRIBUTION POINT. THE AUTHORITY FOR ADVANCE RULINGS FOUND THAT THE AMOUNT PAID WAS FOR TECHNICAL SERVICES, THEREFORE, TDS HAS TO BE MADE. REFERRING TO THE ISSUE OF LIMITATION, THE LD. D.R. POINTED OUT THAT UNDER SUB-SECTION (3) OF SECTION 201, THE LIMITATION OF TWO YEARS IS PROVIDED AND IT IS APPLICABLE ONLY WHERE THE STATEMENT UNDER SECTION 2 00 WAS FILED. OTHERWISE, THE LIMITATION IS EITHER FOUR YEARS OR S IX YEARS, AS THE CASE MAY BE, FROM THE END OF THE FINANCIAL YEAR IN WHICH THE PAYMENT IS MADE OR CREDIT IS GIVEN. IN THE INSTANT CASE, THE QUARTERLY TDS RETURNS WERE FILED BY THE ASSESSEE WH ICH DO NOT CONTAIN THE TRANSACTIONS WHICH WERE DISPUTED BY THE ASSESSEE. THEREFORE, THE PROVISIONS OF SUB-SECTION (3) OF CLA USE (II) IS NOT APPLICABLE AT ALL. THEREFORE, THE ORDERS PASSED BY THE TDS OFFICERS ARE WITHIN THE PERIOD OF LIMITATION. HENCE, THE CO NTENTION OF THE ASSESSEE THAT THE ORDERS ARE BARRED BY LIMITATION H AS NO LEG TO STAND. 24 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 23. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. ADMITTEDL Y, THE ASSESSEE, A TELECOM OPERATOR, MADE PROVISION FOR SITE RESTORA TION EXPENSES, HOWEVER, TDS WAS NOT MADE. THE PURPOSE FOR WHICH T HE PROVISION WAS MADE IS NOT IN DISPUTE. IN OTHER WORDS, THE A DMITTED CASE OF BOTH THE PARTIES IS THAT THE ASSESSEE MADE THE PROV ISION FOR DISMANTLING THE TOWERS AND RESTORATION OF SITE TO I TS ORIGINAL POSITION AFTER TERMINATION OF THE LEASE PERIOD. THE LEASE P ERIOD IS NORMALLY 20 YEARS AND ABOVE. THE ASSESSEE BY PLACING RELIAN CE ON THE ACCOUNTING STANDARD - 29 CLAIMS THAT A PROVISION WO ULD BE MADE IN RESPECT OF AN OBLIGATION. IN OTHER WORDS, THE ASSE SSEE HAD AN OBLIGATION TO INCUR THE EXPENDITURE AFTER TERMINATI ON OF THE LEASE PERIOD. REVENUE, HOWEVER, CONTENDS THAT DUE TO MIS CONCEPTION AND IGNORANCE OF LAW AND WITH AN INTENTION TO CIRCUMVEN T THE STATUTORY PROVISIONS, THE ASSESSEE MADE THE PROVISION. THE F ACT REMAINS THAT THE PAYMENT WAS NOT MADE TO ANYONE AND IT IS NOT CR EDITED TO THE ACCOUNT OF ANY PARTY OR INDIVIDUAL. THE ACCOUNT DO ES NOT DISCLOSE THE PERSON TO WHOM THE AMOUNT IS TO BE PAID. THE C ONTRACTOR WHO IS SUPPOSED TO BE ENGAGED FOR DISMANTLING THE TOWER AN D RESTORE THE SITE IN ITS ORIGINAL POSITION IS NOT IDENTIFIED. A S CONTENDED BY THE ASSESSEE, THE ASSESSEE BY ITSELF ENGAGING ITS OWN L ABOURERS MAY DISMANTLE THE TOWERS AND RESTORE THE SITE TO ITS OR IGINAL POSITION. IN 25 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 SUCH A CASE, THE QUESTION OF DEDUCTING TAX AT SOURC E DOES NOT ARISE. THE ASSESSEE HAS TO PAY ONLY THE SALARY TO THE RESP ECTIVE EMPLOYEES. SUPPOSE THE WORK IS ENTRUSTED TO A CONT RACTOR, THEN DEFINITELY THE ASSESSEE HAS TO DEDUCT TAX. IN THIS CASE, THE CONTRACTOR WOULD BE IDENTIFIED AFTER THE EXPIRY OF LEASE PERIOD. THEREFORE, EVEN IF THE ASSESSEE DEDUCTS TAX, IT CAN NOT BE PAID TO THE CREDIT OF ANY INDIVIDUAL AS RIGHTLY POINTED OUT BY THE LD. SR. COUNSEL. THE ASSESSEE HAS TO ISSUE FORM 16A PRESCRIBED UNDER RULE 31(1)(B) OF THE INCOME-TAX RULES, 1962 FOR THE TAX DEDUCTED AT SOURCE. THE ASSESSEE HAS TO NECESSARILY GIVE THE D ETAILS OF NAME AND ADDRESS OF DEDUCTEE, THE PAN OF DEDUCTEE AND AM OUNT OR CREDITED. IN THIS CASE, THE ASSESSEE COULD NOT IDE NTIFY THE NAME AND ADDRESS OF DEDUCTEE AND AND HIS PAN. THE ASSESSEE ALSO MAY NOT BE IN A POSITION TO QUANTIFY THE AMOUNT REQUIRED FO R INCURRING THE EXPENDITURE FOR DISMANTLING AND RESTORATION OF SITE TO ITS ORIGINAL POSITION. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE PROVISION WHICH REQUIRES DEDUCTION OF TAX AT SOURCE FAILS. HENCE, THE ASSESSEE CANNOT BE FAULTED FOR N ON-DEDUCTION OF TAX AT SOURCE WHILE MAKING A PROVISION. THEREFORE, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE LD. D.R. ACCORDINGLY , THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THIS GROUND OF APPEAL IS ALLOWED. 26 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 24. NOW COMING TO THE ISSUE OF YEAR-END PROVISIONS, THE CONTENTION OF THE ASSESSEE IS THAT IT IS ENGAGED IN VARIOUS SERVICES LIKE ADDRESS VERIFICATIONS, CREDIT CERTIFICATION, C ONTENT DEVELOPMENT ETC. THE ASSESSEE CLAIMS THAT PROVISIONS ARE MADE ON ESTIMATION BASIS SINCE IT IS NOT IDENTIFIABLE AS TO WHAT AMOUN T HAS TO BE PAID TO THE SERVICE PROVIDERS. IN CASE OF NEW SERVICE CONN ECTIONS, THE ASSESSEE HAS TO NECESSARILY VERIFY THE CUSTOMERS A DDRESS AND IDENTIFICATION. THE CLAIM OF THE ASSESSEE IS THAT IN THE LAST MONTH OF THE FINANCIAL YEAR, IT IS NOT KNOWN HOW MANY CUSTOM ER VERIFICATIONS HAVE BEEN COMPLETED AND THE EXACT AMOUNT REQUIRED T O BE PAID. HOWEVER, ON THE BASIS OF THE PAST EXPERIENCE, THE A SSESSEE IS MAKING AN OVERALL PROVISION FOR INCURRING THIS EXPE NDITURE. FROM THE ORDER OF THE CIT(APPEALS) IT APPEARS THAT APART FRO M IDENTIFICATION AND ADDRESS VERIFICATION, THE ASSESSEE HAS ALSO MAD E PROVISION TOWARDS ICU CHARGES AND LEASE LINE EXPENSES, ETC. FROM THE ORDER OF THE CIT(APPEALS) IT APPEARS THAT THE ASSESSEE AL SO HAS TO PAY THE VARIOUS OTHER SERVICE PROVIDERS FOR PROVIDING VALUE ADDED SERVICE TO ITS SUBSCRIBERS LIKE DAILY HOROSCOPES, ASTROLOGY, S ONGS, WALL PAPER DOWNLOADS, CRICKET SCORES, ETC. ADMITTEDLY, THE AS SESSEE MADE ARRANGEMENT WITH OTHER SERVICE PROVIDES FOR PROVIDI NG THESE KIND OF VALUE ADDED SERVICES. THERE MAY BE JUSTIFICATION W ITH REGARD TO THE EXPENDITURE FOR AVAILING THE SERVICES OF IDENTIFICA TION AND VERIFICATION 27 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 FOR THE LAST MONTH OF FINANCIAL YEAR, SINCE THE ASS ESSEE MAY NOT HAVE THE EXACT DETAILS ON VERIFICATION DONE BY THE CONCERNED PERSONS AND THE AMOUNT REQUIRED TO BE PAID. HOWEVE R, IN RESPECT OF THE DOWNLOADS AND VALUE ADDED SERVICE, ETC. THE ENT IRE DETAILS MAY BE AVAILABLE IN THE SYSTEM. THEREFORE, THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT WHEREVER THE PARTICULARS AN D DETAILS AVAILABLE AND AMOUNT PAYABLE COULD BE QUANTIFIED, T HE ASSESSEE HAS TO NECESSARILY DEDUCT TAX. IN RESPECT OF VALUE ADDED SERVICES LIKE DAILY HOROSCOPES, ASTROLOGY, CUSTOMER ACQUISIT ION FORMS ARE ALL FROM SPECIFIC SERVICE PROVIDERS AND THESE VALUE ADD ED SERVICES ARE MONITORED BY SYSTEM. THEREFORE, EVEN ON THE LAST D AY OF FINANCIAL YEAR, THE ASSESSEE COULD VERY WELL ASCERTAIN THE AC TUAL QUANTIFICATION OF THE AMOUNT PAYABLE AND THE IDENTI TY OF THE PAYEE TO WHOM THE AMOUNT HAS TO BE PAID. TO THAT EXTENT, TH E CONTENTION OF THE ASSESSEE THAT THE PAYEE MAY NOT BE IDENTIFIED M AY NOT BE JUSTIFIED. THE EXACT FACTS NEED TO BE EXAMINED. H OWEVER, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. IN OTHER WO RDS, THE ASSESSING OFFICER HAS TO EXAMINE WHETHER THE PAYMEN T TO THE PARTY /PAYEE IS IDENTIFIABLE ON THE LAST DAY OF FINANCIAL YEAR AND WHETHER THE QUANTUM PAYABLE BY THE ASSESSEE IS ALSO QUANTIF IED ON THE LAST DATE OF FINANCIAL YEAR. IN CASE, THE ASSESSING OFF ICER FINDS THAT THE 28 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 PAYEE COULD NOT BE IDENTIFIED ON THE LAST DAY OF FI NANCIAL YEAR AND THE AMOUNT PAYABLE ALSO COULD NOT BE ASCERTAINED, T HE ASSESSEE MAY NOT REQUIRE TO DEDUCT TAX IN RESPECT OF THAT PR OVISION. HOWEVER, IN CASE THE PAYEE IS IDENTIFIED AND QUANTUM IS ALSO ASCERTAINABLE ON THE LAST DAY OF THE FINANCIAL YEAR, THIS TRIBUNAL I S OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS TO NECESSARILY DEDUCT TAX AT SOURCE. SINCE THE DETAILS ARE NOT AVAILABLE ON RECORD, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF YEAR-END PROVISION IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE ISSUE AFRESH AS INDICA TED ABOVE AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 25. NOW COMING TO ROAMING CHARGES, THE CONTENTION O F THE ASSESSEE IS THAT HUMAN INTERVENTION IS NOT REQUIRED FOR PROVIDING ROAMING FACILITY, THEREFORE, IT CANNOT BE CONSIDERE D TO BE A TECHNICAL SERVICE. WE HAVE GONE THROUGH THE JUDGMENT OF APEX COURT IN BHARTI CELLULAR LIMITED (SUPRA), THE APEX COURT AFT ER EXAMINING THE PROVISIONS OF SECTION 9(1)(VII) OF THE ACT, FOUND T HAT WHENEVER THERE WAS A HUMAN INTERVENTION, IT HAS TO BE CONSIDERED A S TECHNICAL SERVICE. IN THE LIGHT OF THE ABOVE JUDGMENT OF THE APEX COURT, THE DEPARTMENT OBTAINED AN EXPERT OPINION FROM THE SUB- DIVISIONAL 29 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 ENGINEER OF BSNL. THE SUB-DIVISIONAL ENGINEER CLAR IFIED THAT HUMAN INTERVENTION IS REQUIRED FOR ESTABLISHING THE PHYSICAL CONNECTIVITY BETWEEN TWO OPERATORS FOR DOING NECESS ARY SYSTEM CONFIGURATIONS. AFTER NECESSARY CONFIGURATION FOR PROVIDING ROAMING SERVICES, HUMAN INTERVENTION IS NOT REQUIRED. ONCE HUMAN INTERVENTION IS NOT REQUIRED, AS FOUND BY THE APEX COURT, THE SERVICE PROVIDED BY THE OTHER SERVICE PROVIDER CANNOT BE CO NSIDERED TO BE A TECHNICAL SERVICE. IT IS COMMON KNOWLEDGE THAT WHE N ONE OF THE SUBSCRIBERS IN THE ASSESSEES CIRCLE TRAVELS TO THE JURISDICTION OF ANOTHER CIRCLE, THE CALL GETS CONNECTED AUTOMATICAL LY WITHOUT ANY HUMAN INTERVENTION. IT IS DUE TO CONFIGURATION OF SOFTWARE SYSTEM IN THE RESPECTIVE SERVICE PROVIDERS PLACE. IN FACT, THE SUB-DIVISIONAL ENGINEER OF BSNL HAS EXPLAINED AS FOLLOWS IN RESPON SE TO QUESTION NO.23:- REGARDING ROAMING SERVICES AS EXPLAINED TO QUESTION NO.21. REGARDING INTERCONNECTIVITY, INITIALLY HUMAN INTERVENTION IS REQUIRED FOR ESTABLISHING THE PHYSI CAL CONNECTIVITY AND ALSO FOR DOING THE REQUIRED CONFIG URATION. ONCE IT IS WORKING FINE, NO INTERVENTION IS REQUIRE D. IN CASE OF ANY FAULTS HUMAN INTERVENTION IS REQUIRED F OR TAKING NECESSARY CORRECTIVE ACTIONS. IN VIEW OF THE ABOVE, ONCE CONFIGURATION WAS MADE, NO HUMAN INTERVENTION IS REQUIRED FOR CONNECTING THE ROAMING CALLS. THE SUBSCRIBER CAN MAKE AND RECEIVE CALLS, ACCESS AND R ECEIVE DATA 30 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 AND OTHER SERVICE WITHOUT ANY HUMAN INTERVENTION. LIKE ANY OTHER MACHINERY, WHENEVER THE SYSTEM BREAKDOWN, TO SET RI GHT THE SAME, HUMAN INTERVENTION IS REQUIRED. HOWEVER, FOR CONNE CTING ROAMING CALL, NO HUMAN INTERVENTION IS REQUIRED EXCEPT INIT IAL CONFIGURATION IN SYSTEM. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT HUMAN INTERVENTION IS NECESSARY FOR ROUTINE MAINTENANCE O F THE SYSTEM AND MACHINERY. HOWEVER, NO HUMAN INTERVENTION IS REQUI RED FOR CONNECTING THE ROAMING CALLS. THEREFORE, AS HELD B Y THE APEX COURT IN BHARTI CELLULAR LIMITED (SUPRA), THE ROAMING CON NECTIONS ARE PROVIDED WITHOUT ANY HUMAN INTERVENTION AND THEREFO RE, NO TECHNICAL SERVICE IS AVAILED BY THE ASSESSEE. THEREFORE, TDS IS NOT REQUIRED TO BE MADE IN RESPECT OF ROAMING CHARGES PAID TO TH E OTHER SERVICE PROVIDERS. ACCORDINGLY, THE ORDERS OF THE LOWER AU THORITIES ARE SET ASIDE IN RESPECT OF PROVISION FOR SITE RESTORATION EXPENDITURE AND ROAMING CHARGES. HOWEVER, IN RESPECT OF YEAR-END P ROVISION, THE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ISSUE OF LIMITATION RAISED BY THE ASSESSEE FOR PASSING OR DER UNDER SECTIONS 201(1) AND 201(1A) IS ALSO REMITTED BACK T O THE FILE OF THE ASSESSING OFFICER. 31 I.T.A. NOS.320 TO 329/MDS/14 S.P. NOS.324 TO 333/MDS/15 26. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLO WED FOR STATISTICAL PURPOSES. SINCE THE APPEALS ARE ALLOWE D, THE STAY PETITIONS OF THE ASSESSEE BECOME INFRUCTUOUS AND DI SMISSED. ORDER PRONOUNCED ON 20 TH JULY, 2015 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 20 TH JULY, 2015. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-VII, CHENNAI-34 4. 1 92 /CIT (TDS), CHENNAI 5. 7: -2 /DR 6. ( ; /GF.