IDEA CELLULAR LTD, MUMBAI V. CIT TDS (TDS), MUMBAI

ITA 3680/MUM/2014

• Counselvise Citation: 368019914 RSA 2014
• Duration Of Justice: 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 23-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RONAK G DOSHI
• Keywords: Application of stay
• Section: 133A; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I , BENCH MUMBAI , BEFORE SHRI H.L.KARWA, PRESIDENT & SHRI R.C.SHARMA, AM S A NO S . 17 8 TO 180 / MUM/20 1 4 (ARISING OUT OF ITA NO S . 3678 TO 3680 /MUM/2014) ( ASSESSMENT YEAR S : 200 9 - 10, 2010 - 11 & 2011 - 12 ) M/S IDEA CELLULAR LIMITED, 3 RD FLOOR, WINDSOR, OFF. C.S.T. ROAD, KALINA, SANTACRUZ (EAST), MUMBAI - 400 098 VS. ACIT (TDS) - 2(1), MUMBAI PAN/GIR NO. : A A A CB 2100 P ( APPELLANT ) .. ( RESPONDENT ) AND ITA NOS.3678 TO 3680/MUM/2014) ( ASSESSMENT YEAR S :2009 - 10, 2010 - 11 & 2011 - 12 ) M/S IDEA CELLULAR LIMI TED, 3 RD FLOOR, WINDSOR, OFF. C.S.T. ROAD, KALINA, SANTACRUZ (EAST), MUMBAI - 400 098 VS. ACIT (TDS) - 2(1), MUMBAI PAN/GIR NO. : A AACB 2100 P ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI RONAK G. DOSHI /REVENUE BY : SHRI SANJEEV JAIN DATE OF HEARING : 27 TH JUNE , 201 4 DATE OF PRONOUNCEMENT : 27 TH JUNE , 201 4 O R D E R PER BENCH ) : TH ESE STAY APPLICATION S AROSE OUT OF THE APPEAL S FILED BY THE ASSESSEE BEFORE ITAT IN ITA NO. 3678 TO 3780 /M UM /2014 , IN THE MATTER OF ORDER PASSED U/S. 263 OF THE I.T. ACT FOR THE A.Y.2009 - 10 TO 2011 - 12. SA NO S . 178 TO 180 /20 1 4 & ITA NOS. 3678 TO 3680/14 2 2 . THE ASSESSEE HAS FILED APPEALS BEFORE THE TRIBUNAL ON 23 - 5 - 2014 AGAINST T HE ORDER OF CIT U/S. 263 OF THE ACT. THROUGH THESE STAY APPLICATIONS, THE ASSESSEE HAS ASKED FOR STAY OF PROCEEDINGS, WHICH WOULD BE INITIATED PURSUANT TO THE ORDER OF CIT U/S. 263 OF THE ACT AND NOT AGAINST ANY DEMAND. 3 . SINCE NO DEMAND WAS RAISED IN THE ORDER OF CIT PASSED U/S. 263, BOTH LEARNED AR AND DR FAIRLY AGREED TO CONSIDER THE MERIT OF THE ORDER PASSED U/S. 263 OF THE ACT RATHER THAN MERELY DECIDING THE STAY APPLICATION S . AFTER BOTH THE PARTIES HAVING AGREED FOR ARGUING ON MERITS, THE BENCH CONSIDER ED IT REASONABLE TO HEAR THE APPEALS ON MERIT ALSO, SO AS TO RESOLVE THE ENTIRE CONTROVERSY. 4 . BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING MOBILE TELECOM SERVICES. A SURVEY U/S. 133A WAS CONDUCTED ON 9 - 9 - 2011, CONSEQ UENTLY, ORDER DATED 26 - 3 - 2012 U/S. 201(1)/(1A) OF THE ACT , WAS PASSED RAISING A DEMAND OF RS. 5,06,612/ - ON ACCOUNT OF NON - DEDUCTION OF TAXES ON ROAMING CHARGES PAID BY THE ASSESSEE IN THE A.Y.2009 - 10 . THEREAFTER THE CIT (TDS), MUMBAI ISSUED NOTICE U/S. 263 D IRECTING THE ASSESSEE TO SHOW CAUSE AS TO WHY THE ASSESSMENT ORDER DATED 26 - 3 - 2012 SHOULD NOT BE SET ASIDE. IN THE ORDER U/S. 263, THE CIT OBSERVED THAT THE TDS OFFICER HAS FAILED TO GIVE ANY REASON AS TO WHY ONLY AMOUNT OF RS. 36,65,537/ - WAS CONSIDERED FOR DEDUCTION OF TAX, WHEREAS THE ACTUAL ROAMING CHARGES PAID BY THE COMPANY WERE TO THE TUNE OF RS. 95.86 CRORES. THE CIT ALSO OBSERVED THAT TDS OFFICER HAS FAILED TO EXAMINE SA NO S . 178 TO 180 /20 1 4 & ITA NOS. 3678 TO 3680/14 3 APPLICABILITY OF TDS TOWARDS PAYMENT OF COMMISSION AND DISCOUNT TO DEALERS AND RECHA RGE EXPENSES, FINALLY THE CIT HELD THAT THE ORDER PASSED BY ITO( TDS ) U/S. 201(1)/(1A) OF THE ACT WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. HE FURTHER DIRECTED TO ITO( TDS ) TO VERIFY THE ISSUE AND APPLICABILITY OF TDS PROVISIONS. 5 . IT WAS A RGUED BY THE LEARNED A R THAT TAX DEDUCTION ACCOUNT NUMBER IS NOT CENTRALIZED AND ACCORDINGLY ASSESSEE HAS AS MANY AS 21 TAN ( TAX DEDUCTION ACCOUNT) NUMBERS IN RESPECT OF PAYMENT MADE BY VARIOUS CIRCLES. FOR MUMBAI CIRCLE, THE ASSESSEE HAS BEEN ALLOTTED TAN : MUMI 07565 F . HE FURTHER SUBMITTED THAT ASSESSEE HAS FILED SEPARATE TAN FOR EACH CIRCLE AND IT HAS FILED TDS RETURN SEPARATELY FOR EACH CIRCLE AND FOR MUMBAI CIRCLE ASSESSEES JURISDICTION LIES WITH THE ITO(TDS) - 2(2), MUMBAI. HOWEVER, IN THE ORDER PASSE D BY THE CIT (TDS), MUMBAI U/S. 263, THE CIT HAS ASKED THE ITO (TDS) , MUMBAI FOR CONSIDERING THE ENTIRE AMOUNT OF RS. 95.86 CRORES PAID AS ROAMING CHARGES AS PER THE AUDITED ACCOUNT OF THE ASSESSEE IN PLACE OF ROAMING CHARGES PAID FOR MUMBAI CIRCLE. AS PER THE LEARNED AR THE CIT HAS EXCEEDED HIS JURISDICTION INSOFAR AS JURISDICTION OF CIT(TDS), MUMBAI IS CONCERNED , H E FURTHER ARGUED THAT JURISDICTION OF CIT(TDS), MUMBAI IS CONFINED ONLY TO THE CONCERNED AO OF TDS, MUMBAI CIRCLE ONLY AND NOT TO OTHER AOS POSTED AT 22 DIFFERENT CIRCLES ALL OVER INDIA, WHERE ASSESSEE WAS FILING SEPARATE TDS RETURNS. THE MAIN CRUX OF ARGUMENT OF THE LEARNED AR WAS THAT THE CIT(TDS) MUMBAI SHOULD SA NO S . 178 TO 180 /20 1 4 & ITA NOS. 3678 TO 3680/14 4 HAVE ASKED THE CONCERNED ITO(TDS), MUMBAI WITH REGARD TO VERIFY CORRECTNESS OF THE TDS P AYMENT ON THE R OAMING CHARGES, COMMISSION AND DISCOUNT TO DEALERS PERTAINING TO MUMBAI CIRCLE ONLY AND NOT TO OTHER 21 CIRCLES ON WHICH CIT (TDS), MUMBAI HAS NO JURISDICTION. 6 . ON THE OTHER HAND, LEARNED DR CONTENDED THAT SINCE THE ASSESSEE HAS NOT CORRE CTLY DEDUCTED TAX AT SOURCE IN RESPECT OF VARIOUS EXPENDITURE CLAIMED IN THE PROFIT AND LOSS ACCOUNT, CIT HAS CORRECTLY DIRECTED THE AO(TDS) TO EXAMINE THE ENTIRE AMOUNT OF ROAMING CHARGES PAID, WHICH WAS FOUND TO BE DEBITED IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE. 7 . WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE STAY APPLICATIONS AS WELL AS ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT IN CONSEQUENCE TO SURVEY AT MUMBAI OFFICE OF THE ASSESSEE, ITO(TDS) - 2(2), MUM BAI PASSED THE ORDER U/S. 201(1)/201(1A) OF THE ACT AND HELD THAT ASSESSEE IS IN DEFAULT WITH REGARD TO DEDUCTION OF TAX AT SOURCE IN RESPECT OF ROAMING CHARGES OF RS. 39,65,537/ - PAID BY THE ASSESSEE. HOWEVER, THIS ORDER OF AO WAS FOUND BY CIT (TDS), MUMBAI AS ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY THE CIT PASSED ORDER U/S. 263, WHEREIN HE HAS DIRECTED THE ITO(TDS) TO LOOK INTO THE CORRECTNESS OF TAX DEDUCTED AT SOURCE ON THE ENTIRE ROAMING CHARGES OF RS. 95.86 CRORES PAID BY A LL THE 21 CIRCLES AND DEBITED TO AUDITED PROFIT AND LOSS ACCOUNT , AND NOT ONLY THE ROAMING CHARGES PAID BY MUMBAI CIRCLE. THE SA NO S . 178 TO 180 /20 1 4 & ITA NOS. 3678 TO 3680/14 5 CIT(TDS), MUMBAI HAS ALSO FOUND THAT ORDER OF AO(TDS) WAS NOT CORRECT WITH REGARD TO DEDUCTION OF TAX AT SOURCE ON ACCOUNT OF DISC OUNT AND COMMISSION DEBITED BY THE ASSESSEE IN ITS AUDITED PROFIT AND LOSS ACCOUNT. WE FOUND THAT SINCE THE SEPARATE TDS OFFICERS HAVING JURISDICTION ON EACH TAN ARE BOUND TO EXAMINE THE COMPLIANCE OF CHAPTER XVII - D, SEPARATE PROCEEDINGS ARE REQUIRED TO BE INITIATED BY SUCH TDS OFFICERS AND WHEN THERE IS AN ALLEGED NON - COMPLIANCE OF TDS AN APPROPRIATE ORDER HAS TO BE PASSED BY RESPECTIVE TDS OFFICERS. IN THE INSTANT CASE ALSO ASSESSEE HAS FILED TDS RETURN AT VARIOUS PLACES WHERE IT WAS HAVING TAN AND THE S AME WERE ALSO ASSESSED BY DIFFERENT ITO(TDS) HAVING JURISDICTION OVER THE RESPECTIVE TAN. AGAINST THESE ORDERS OF TDS, APPEALS ARE PENDING WITH THE DIFFERENT CIT(A) AS WELL AS BEFORE OTHER APPELLATE AUTHORITIES. SINCE THE ASSESSEE WAS HAVING DIFFERENT TANS , RESPECTIVE TDS RETURNS WERE FILED AND THEY WERE ASSESSED SEPARATELY. EVEN THOUGH INCOME TAX ASSESSMENT OF THE ASSESSEE WAS TO BE FRAMED AT ONE PLACE , WHERE THE REGISTERED OFFICE OF THE ASSESSEE COMPANY IS SITUATED BUT IN RESPECT O F TDS RETURNS, SEPARATE ITO(TDS) IS HAVING JURISDICTION WITH RESPECT TO THE DIFFERENT PLACES FOR WHICH ASSESSEE IS HAVING SEPARATE TAN NUMBERS. UNDER THESE CIRCUMSTANCES, WHEN THE DIFFERENT TDS RETURNS WERE FILED AT DIFFERENT PLACES, CIT(TDS) MUMBAI HAS JURISDICTION TO ALLEGE THE ORDER OF I TO(TDS) , MUMBAI ONLY TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE IN RESPECT OF TAN NUMBER OF MUMBAI CIRCLE. CIT(TDS), MUMBAI HAS NO JURISDICTION TO ALLEGE THAT THE ORDER PASSED SA NO S . 178 TO 180 /20 1 4 & ITA NOS. 3678 TO 3680/14 6 BY ALL OTHER ITO(TDS) AT DIFFERENT PLACES IN INDIA WH ERE ASSESSEE WAS FILING SEPARATE RETURN, TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. MEANING THEREBY THE CIT CAN PASS ORDER U/S. 263 TO ALLEGE THE ORDER OF AO(TDS) TO BE ERRONEOUS AND PREJUDICIAL QUA THE ORDER MENTIONED BY HIM IN HIS ORDER U /S. 263. IN THE INSTANT CASE, THE CIT HAS ALLEGED THE ORDER OF ITO(TDS), MUMBAI AS ERRO NEOUS AND PREJUDICIAL , THEREFORE, IT IS NOT CORRECT TO ALLEGE THE ORDER PASSED BY OTHER ITO( TDS ) AT DIFFERENT PLACES WITHOUT POINTING OUT ANY FAULT THEREIN. ACCORDINGLY , CIT(TDS) WAS TO BE CONFINED TO THE ERRONEOUS ACT OF ITO(TDS), MUMBAI WITH RESPECT TO ROAMING CHARGES, DISCOUNT AND COMMISSION PERTAINING TO MUMBAI CIRCLE ONLY . 8 . IN RESPECT OF TDS ON COMMISSION AND DISCOUNT, WE FOUND THAT HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. IDEA CELLULAR LIMITED, 325 ITD 145 HAS ALREADY DECIDED THE ISSUE AGAINST THE ASSESSEE, HELD THAT COMMISSION IS SUBJECT TO TDS U/S. 194H. ACCORDINGLY, THE CIT WAS JUSTIFIED IN ALLEGING THAT ITO(TDS) WAS NOT CORRECTLY APPRECIATED ASSESSEES D EFAULT FOR NON - DEDUCTION OF TAX AT SOURCE IN RESPECT OF COMMISSION AND DISCOUNT. 9 . IN VIEW OF THE ABOVE, IT IS NOT A FIT CASE FOR GRANT OF ANY STAY OF THE PROCEEDINGS. ACCORDINGLY, WE MODIFY THE ORDER OF CIT(TDS), MUMBAI ONLY TO A LIMITED EXTENT OF DIRE CTING THE ITO(TDS) TO VERIFY THE CORRECTNESS OF TAX DEDUCTED AT SOURCE IN RESPECT OF ROAMING CHARGES, DISCOUNT AND COMMISSION PERTAINING TO MUMBAI CIRCLE ONLY, IN PLACE OF SA NO S . 178 TO 180 /20 1 4 & ITA NOS. 3678 TO 3680/14 7 ENTIRE EXPENDITURE DEBITED IN THE PROFIT AND LOSS ACCOUNT WHICH IS PERTAINING TO ALL 21 TANS ALLOTTED TO THE ASSESSEE ALL OVER INDIA. ASSESSEE IS DIRECTED TO FURNISH FULL DETAILS WITH REGARD TO THE ACTUAL AMOUNT OF EXPENDITURE DEBITED IN RESPECT OF ROAMING CHARGES, DISCOUNT AND COMMISSION BEFORE THE AO ALONG WITH DOCUMENTARY EVIDENCE SO A S TO SUBSTANTIATE ITS CLAIM OF EXPENDITURE BEING PERTAINING TO MUMBAI CIRCLE. ITO(TDS) IS ALSO DIRECTED TO EXAMINE THE CORRECTNESS OF TAX DEDUCTED AT SOURCE U/S. 201(1)/201(1A) OF THE ACT WITH RESPECT TO EXPENDITURE INCURRED ON MUMBAI CIRCLE ON ACCOUNT OF R OAMING CHARGES, DISCOUNT AND COMMISSION. WE DIRECT ACCORDINGLY. 10 . IN THE RESULT, STAY APPLICATIONS HAVE BECOME INFRUCTUOUS. APPEALS ARE ALLOWED IN PART IN TERMS INDICATED HEREIN ABOVE . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 7 TH JUNE . 201 4 . 2 7 TH JUNE ,2014 SD/ - SD/ - ( ) ( H.L.KARWA ) ( ) ( R.C.SHARMA ) / PRESIDENT / ACCOUNTANT MEMBER MUMBAI ; DATED 2 7 / 0 6 /2014 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// SA NO S . 178 TO 180 /20 1 4 & ITA NOS. 3678 TO 3680/14 8 / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI