Vodafone Mobile Services Ltd., New Delhi V. ACIT, New Delhi

ITA 409/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2974 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: misc
• Appeal Filed On: 20-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SH. N.K.SAINI, ACCOUNTANT MEMBER AND SH.K.N.CHARY, JUDICIAL MEMBER ITA NO. 409 / DEL/20 1 5 ( ASSESSMENT YEAR: 20 04 - 05 ) VODAFONE MOBILE SERVICES LTD. (EARLIER KNOWN AS VODAFONE ESSAR MOBILE SERVICES LTD) , CIRCLE OFFICE: C - 48, OKHLA INDUSTRIAL AREA, PHASE - II NEW DELHI PAN: AAACS4457Q VS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 51(1) NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 4 10 / DEL/20 1 5 ( ASSESSMENT YEAR: 2005 - 06 ) VODAFONE MOBILE SERVICES LTD. (EARLIER KNOWN AS VODAFONE ESSAR MOBILE SERVICES LTD), CIRCLE OFFICE: C - 48, OKHLA INDUSTRIAL AREA, PHASE - II NEW DELHI PAN:AAACS4457Q VS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 51(1) NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 41 1 / DEL/20 15 ( ASSESSMENT YEAR: 200 6 - 07 ) VODAFONE MOBILE SERVICES LTD. (EARLIER KNOWN AS VODAFONE ESSAR MOBILE SERVICES LTD), CIRCLE OFFICE: C - 48, OKHLA INDUSTRIAL AREA, PHASE - II VS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 51(1) NEW DELHI 2 O ORDER PER K.N. CHARY , JUDICIAL MEMBER THESE THREE APPEALS RELAT E TO THE ASSESSMENT YEARS 2004 - 05 TO 2006 - 07 AND ARE PREFERRED BY THE ASSESSEE CHALLENGING THE FINDINGS OF THE LEARNED CIT(A) - IX, NEW DELHI (HEREINAFTER REFERRED TO THE AS THE ACT) WHERE UNDER THE LEARNED CIT(A) REFUS ING TO DELETE THE TDS LIABILITY OF ASSESSEE DETERMINED BY THE LEARNED AO UNDER SECTION 201 / 201(1A) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT ) . FACTS OF THESE THREE APPEALS ARE SIMILAR HENCE WE SHALL DISPOSE THEM OF BY WAY OF COMMON O RDER WITH REFERENCE TO THE FACTS INVOLVED FOR THE AY 2004 - 05. 2. BRIEFLY STA TED FACTS ARE THAT THE ASSESSEE IS A SUBSIDIARY COMPANY OF VODAFONE ESSAR LTD. AND IS ENGAGED IN TELEPHONY SERVICES THROUGH PRE - PAID AND POST - PAID CONNECTIONS. IN CONNECTION WITH T HE TELEPHONY SERVICES, THE ASSESSEE ALSO PAYS ROAMING CHARGES TO OTHER TELECOM OPERATORS , THAT RELEVANT TAX HAS BEEN DULY DEDUCTED AND DEPOSITED BY THE ASSESSEE ON UPFRONT COMMISSION PAID TO THE PREPAID DISTRIBUTORS DURIN G THE SUBJECT YEAR, THAT T HE LD. AO IN HIS ORDER, TREATING THE ASSESSEE AS AN ASSESSEE - IN - NEW DELHI PAN:AAACS4457Q (APPELLANT) (RESPONDENT) ASSESSEE BY SH. SALIL KAPUR & MS. ANANYA KAPUR, ADVOCATES RESPONDENT BY SH. ARUN KUMAR YADAV, SR. DR DATE OF HEARING 14.12.2017 DATE OF PRONOUNCEMENT 15 .12.2017 3 DEFAULT , STATED THAT THOUGH THE ASSESSEE SUBMITTED THAT RELEVANT TAX HAD BEEN DEDUCTED ON THE AMOUNT OF COMMISSION AS PER THE PROVISIONS OF THE SECTION 194H OF THE ACT, HOWEVER, NO EVIDENCE TO SUBS TANTIATE THE SAME WAS FURNISHED BEFORE HIS OFFICE , AS SUCH, ON ACCOUNT OF FAILURE TO SUBMIT THE NECESSARY SUPPORTING, THE ASSESSEE WAS HELD TO BE ASSESSEE - IN - DEFAULT ON UPFRONT COMMISSION. FURTHER, ON ACCOUNT OF FAILURE TO DEDUCT TAX ON ROAMING CHARGES, TH E ASSESSEE WAS HELD TO BE AN ASSESS E E - IN - DEFAULT ON NON - DEDUCTION OF TAX ON ROAMING CHARGES. ACCORDINGLY, THE AO RAISED THE DEMAND OF RS. 2,10,27,473/ - AS TDS LIABILITY ALONG WITH INTEREST ON COMMISSION PAID TO THE DISTRIBUTORS ON PRE - PAID CONNECTIONS AND RS. 3,88,73,502/ - AS TDS LIABILITY AND INTEREST ON ROAMING CHARGES. ASSESSEE ALSO FILED A WRIT PETITION BEFORE THE HON BLE DELHI HIGH COURT CONTENDING THAT THE TDS PROCEEDINGS ARE TIME BARRED. THE HON BLE DELHI HIGH COURT VIDE ORDER DATED 22.03.20 11 HAS IN PRINCIPLE ALLOWED THE REVENUE TO PASS UNDER SECTION 201 OF THE ACT FOR THE YEAR UNDER CONSIDERATION WITH A DIRECTION NOT TO TAKE ANY COERCIVE STEPS FOR RECOVERY OF TILL THE DISPOSAL OF THE WRIT PETITION. THE AO PROCEEDED WITH THE MATTER AND CONCLUDED THE PROCEEDINGS UNDER SECTION 201 READ WITH SECTION 201(1A) OF THE ACT BY DETERMINING TDS LIABILITY AND INTEREST THEREON AT 5 , 99 , 00 , 939 / - . IN THE APPEAL PREFERRED BY THE ASSESSEE , LEARNED CIT(A) OBSERVED THAT THE ISSUE IS PENDING BEFORE THE HON BLE HIGH COURT OF DELHI UNDER THE WRIT PETITION FILED BY THE ASSESSEE , AS SUCH , WITHOUT ADJUDICATING THE SAME , HE SEN T THE MATTER BACK TO THE AO STATING ONCE THE ORDER OF THE HON BLE HIGH COURT IS PASSED , THE AO TO APPLY THE SAME IN THE RELEVANT YEAR. 4 3. AT THE OUTSET, IT IS BROUGHT TO OUR NOTICE BY THE LEARNED AR THAT IN WP(C) 8535/2011 & CM APPLS 19305/2011, 9781/2012, WP(C) 8536/2011 & CM APPLS19307/2011, 9778/2012 AND WP(C) 8537/2011 & CM APPLS 19309/2011, 9776/2012 THE MATTERS PREFERRED BY THE ASSESSE E , THE HON BLE JURISDICTIONAL HIGH COURT WAS PLEASED TO QUASH THE NOTICE ISSUED BY THE REVENUE SEEKING TO INITIATE THE PROCEEDINGS AGAINST THE ASSESSEE TO DECLARE THEM TO BE THE ASSESSEE IN DEFAULT UNDER SECTION 201(3) OF THE ACT, AS SUCH THE DETERMINATION THE TDS LIABILITY DONE BY THE AO U/S 201/201(1) (A) OF THE ACT DOES NOT SURVIVE. LEARNED DR DOES NOT CONTROVERT THIS FACT. 4. WE HAVE GONE THROUGH THE RECORD . LEARNED AR SUBMITTED THAT WP(C) 8535/2011 RELATE TO THE FINANCIAL YEAR 2003 - 04 , WP(C) 8536/2011 RELATE TO THE FINANCIAL YEAR 2004 - 05 AND WP(C) 8537/2011 RELATE TO THE FINANCIAL YEAR 2005 - 06 AND THE ORDER DATED 9.3.2016 IS PASSED IN THESE THREE WPCS, HOWEVER, A TYPOGRAPHICAL MISTAKE HAD CREPT IN PARAGRAPH NO. 30 AND 31 OF THIS ORDER INASMUCH AS FOR THE FINANCIAL YEARS BY TYPOGRAPHICAL MISTAKE ASSESSMENT YEAR IS MENTIONED. 5. WE HAVE GONE THROUGH THE RECORD. ORDER OF THE LEARNED CIT(A) VIDE PARAGRAPH NO. 3.1 READS THAT THE ASSESSEE CHALLEN GED THE TDS PROCEEDINGS AS TIME BARRED BEFORE HON BLE HIGH COURT AND IN THIS CONTEXT LEARNED CIT(A) DIRECTED THE LEARNED AO TO APPLY THE ORDERS OF THE HON BLE HIGH COURT AS AND WHEN THEY ARE PASSED IN THE CASE OF THE ASSESSEE. WE, THEREFORE, IN VIEW OF THE ORDER DATED 9.3.2016 OF THE HON BLE HIGH COURT , DEEM IT JUST AND CONVENIENT TO SET ASIDE THE ISSUE TO THE FILE AO TO APPLY THE ORDER OF THE HON BLE HIGH COURT IN WP(C) 8535/2011 & CM APPLS 19305/2011, 9781/2012, WP(C) 5 8536/2011 & CM APPLS19307/2011, 9778/2012 AND WP(C) 8537/2011 & CM APPLS 19309/2011, 9776/2012 TO THE CASE OF THE ASSESSEE. WE ACCORDINGLY DIRECT THE LD. AO TO TO APPLY THE ORDER OF THE HON BLE HIGH COURT IN WP(C) 8535/2011 & CM APPLS 19305/2011, AND BATCH, TO THE CASE OF THE ASSESSEE. 6 . IN THE RESULT, THESE APPEAL S ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15 TH DECEMBER , 2017. SD/ - SD/ - ( N.K.SAINI ) (K.N.CHARY) ACCOUNTNAT MEMBER JUDICIAL MEMBER DATE: - 15 TH DEC ,2017 SH COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 1 4 .1 2 .2017 PS 2. DRAFT PLACED BEFORE AUTHOR 15 .1 2 .2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 15 .1 2 .2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 15 .1 2 .2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.