Tata Teleservices Limited, CHENNAI V. ITO TDS II(5), CHENNAI

ITA 339/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4060 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 25-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SPARSH BHARGANA
• Keywords: TDS
• Section: 194C; 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./I.T.A. NO.339/CHNY/2018 / ASSESSMENT YEAR : 2007-2008. M/S. TATA TELESERVICES LIMITED, 13 TH FLOOR, PRIME INFOCITY -II, RAJIV GANDHI SALAI, KANDANCHAVADI, CHENNAI 600 096. [PAN AAACT 2438A] VS. THE INCOME TAX OFFICER, TDS II (5) CHENNAI. ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI. SPARSH BHARGANA, C.A. /RESPONDENT BY : SHRI. SRIDHAR DORA, JCI.T /DATE OF HEARING : 06 - 0 2 - 201 9 /DATE OF PRONOUNCEMENT : 07 - 0 2 - 201 9 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST AN ORDER DATED 21.11.2017 OF LD. COMMISSIONER OF INCO ME-TAX (APPEALS)- 17, CHENNAI. ASSESSEE IS AGGRIEVED ON BEING TREATED AS ONE IN DEFAULT U/S.201(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AND LEVY OF INTEREST U/S.201(1A) OF THE ACT. 2. GROUNDS TAKEN BY THE ASSESSEE INTER ALIA INCLUDE A GRIEVANCE THAT PAYEES HAD SHOWN THE RECEIPTS FROM THE ASSES SEE IN THEIR ITA NO.339/CHNY/2018. :- 2 -: RESPECTIVE TAX RETURNS AND PAID TAXES DUE THEREON AND HENCE ASSESSEE COULD NOT BE TREATED AS ONE IN DEFAULT UNDER SECTI ON 201(1) OF THE ACT. AS A COROLLARY TO THIS ASSESSEE ALSO STATES THAT LE VY OF INTEREST U/S.201(1A) OF THE ACT HAD TO BE RESTRICTED TO THE PERIOD UPTO THE PAYMENT OF TAXES BY THE PAYEES/DEDUCTEES. THE ABOV E TWO GRIEVANCE APPEAR AS GROUNDS 5 & 6. 3. APART FROM THESE, ASSESSEEE THROUGH ITS OTHER GROUN DS ASSAIL APPLICATION OF SECTION 194C OF THE ACT ON INTERCONN ECTION USAGE CHARGES (IN SHORT THE IUC) PAID TO OTHER TELECO M OPERATORS. 4. WE HAVE HEARD THE RIVAL CONTENTIONS. BY VIRTUE OF THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF HINDUSTAN COCA COLA BEVEREGES P. LTD VS. CIT, (2007 ) 293 ITR 226 AND FIRST PROVISO TO SECTION 201(1) OF THE ACT, AN ASSESSEE CANNOT BE DE EMED AS ONE IN DEFAULT, WHERE THE RESIDENT PAYEES/ RECIPIENTS HA D FURNISHED THEIR RETURNS OF INCOME U/S.139 OF THE ACT AND TOOK INTO ACCOUNT THE RECEIPTS OF THE ASSESSEE FOR COMPUTING THEIR INCOME AND PAID TAX DUES ON THE INCOME DECLARED BY THEM. HERE THE PLEADING OF THE ASSESSEE THROUGH ITS GROUNDS 5 AND 6 ARE THAT IUC PAID TO VA RIOUS SERVICE PROVIDERS BY IT WERE CONSIDERED BY THE RESPECTIVE SERVICE PROVIDERS AND INCLUDED AS A PART OF THEIR RECEIPTS AND RETURN S FILED BY THEM PAYING DUE TAXES THEREON. IF THIS ARGUMENT OF THE ASSESSEE IS CORRECT, IT CANNOT BE CONSIDERED AS ONE IN DEFAULT. ITS LIAB ILITY FOR INTEREST WOULD ITA NO.339/CHNY/2018. :- 3 -: ALSO BE LIMITED PERIOD ENDING ON THE DATE ON WHIC H DEDUCTEES/ PAYEES HAD PAID TAXES. THUS WITHOUT EXPRESSING ANY OPINION ON THE GROUNDS OF THE ASSESSEE THAT IT WAS NOT LIABLE TO D EDUCT TAX AT SOURCE IN RESPECT OF IUC PAYMENTS TO VARIOUS TELECOM PROVI DERS, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMIT THE I SSUE BACK TO THE FILE OF THE LD. AO, FOR VERIFYING WHETHER PAYEES HAD I NCLUDED THE AMOUNTS RECEIVED FROM THE ASSESSEE IN THEIR RETURNS OF INCO ME AND PAID DUE TAXES THEREON. ASSESSEE HAS TO PRODUCE RECORDS IN SUPPORT OF HIS PLEADING BEFORE THE LD. AO. LD. ASSESSING OFFICER SHALL THEREAFTER PROCEED ACCORDING TO LAW. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 7TH DAY OF FEBR UARY 2019, AT CHENNAI. SD/ - (N.R.S. GANESAN) / JUDICIAL MEMBER SD/ - (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER / CHENNAI / DATED:7TH FEBRUARY, 2019. KV / COPY TO: 1 . / APPELLANT 3. ( ) / CIT(A) 5. / DR 2. / RESPONDENT 4. / CIT 6. / GF