Shin Satellite Public Co. Ltd, V. ADIT International Taxation Circle 2 (2),

ITA 4107/DEL/2006

• Counselvise Citation: 410720114 RSA 2006
• Duration Of Justice: 4 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 13-10-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 12-12-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHWANI MAHAJAN
• Assessee Lawyers: F V IRANI
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH D DELHI ] BEFORE SHRI R. P. TOLANI, JM AND SHRI K. D. RANJAN, AM I. T. APPEAL NOS. 4107, 4108, 4109 & 4110 (DEL) OF 2006. ASSESSMENT YEARS : 1998-99, 1999-2000, 2000-01 & 2001-02. SHIN SATELLITE PUBLIC COMPANY LIMITED, DY. DIRECTOR OF INCOME-TAX , C/O. MOHINDER PURI & CO., C. AS., VS. INTERNATIONAL TAXATION, 1 A-D VANDHNA, 11TOLSTOY MARG, C I R C L E : 2 (2), N E W D E L H I 110 001. N E W D E L H I. P A N / G I R NO. AAB CS 9905 O. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI F. V. IRANI, ADV.; DEPARTMENT BY : SHRI ASHWANI MAHAJAN, SR. D. R.; O R D E R. P E R B E N C H : THESE APPEALS BY THE ASSESSEE FOR ASSESSMENT YEARS 1998-99 TO 2001-02 ARISE OUT OF ORDER OF THE LD. CIT (APPEALS)-XXIX, NEW DELHI. THESE WE RE HEARD TOGETHER AND ARE BEING DISPOSED OF, FOR THE SAKE OF CONVENIENCE, BY THIS COMMON ORD ER. 2. THE COMMON GROUNDS OF APPEAL RAISED BY THE ASSES SEE READ AS FOLLOWS :- THE UNDER MENTIONED GROUNDS OF APPEAL ARE WITH OUT PREJUDICE TO ONE ANOTHER :- 1. THE COMMISSIONER OF INCOME TAX (APPEALS)-XXIX, NEW DELHI [THE CIT(A)] ERRED IN CONFIRMING THE ORDER PASSED BY THE ASSISTA NT DIRECTOR OF INCOME TAX, 2 I. T. APPEAL NOS. 4107, 4108, 4109 & 4110 (DEL) OF 2005. CIRCLE : 2 (2), INTERNATIONAL TAXATION, NEW DELHI ( THE AO), UNDER S. 154 OF THE INCOME TAX ACT, 1961 (THE ACT) LEVYING INTEREST U PON THE APPELLANT UNDER S. 234A OF THE ACT; 2. THE CIT (A) OUGHT TO HAVE ANNULLED AND QUASHED, OR WITHOUT PREJUDICE, REVERSED, THE ABOVE IMPUGNED ORDER OF THE AO; 3. THE CIT (A) OUGHT TO HAVE : I) HELD THAT THE LEVY, BY THE AO, OF INTEREST UNDER S. 234A OF THE ACT, OTHERWISE THAN IN THE ITNS 150, WAS ILLEGAL, VOID AND WITHOUT JURISDICTION; II) HELD THAT THE LEVY OF SUCH INTEREST, BEING A PART OF THE PROCESS OF ASSESSMENT, COULD NOT HAVE LEGALLY BEEN MADE AFTER THE PROCESS OF ASSESSMENT STOOD CONCLUDED; III) WITHOUT PREJUDICE TO (I) AND (II) ABOVE, HE LD THAT IN ANY EVENT, THE LEVY OF SUCH INTEREST BY THE AO IN RECTIFICATION PROCEEDING S WAS ILLEGAL, VOID AND WITHOUT JURISDICTION AS TWO VIEWS WERE CONCEIVABLY POSSIBLE REGARDING THE LEGALITY OF THE LEVY OF SUCH INTEREST, POST THE CONCLUSION OF ASSES SMENT PROCEEDINGS, IN RECTIFICATION PROCEEDINGS; 4. THE CIT (A) ERRED IN ALLEGING THAT THE APPELLA NT HAD NOT DISPUTED THE COMMISSION, BY IT, OF A DEFAULT UNDER S. 234A OF TH E ACT, OVERLOOKING THE FACT THAT IT WAS APPARENT FROM THE RECORD THAT THE APPELLANT WAS DENYING ITS LIABILITY TO INDIAN TAXATION AND THEREFORE, DENYING ITS LIABILIT Y TO FILE A RETURN OF INCOME UNDER THE ACT. 3. IN THIS CASE THE ASSESSING OFFICER WHILE COMPLET ING ASSESSMENT UNDER SECTION 143(3) OF THE I. T. ACT, 1961 GAVE SPECIFIC DIRECTIONS IN THE ASS ESSMENT ORDER FOR CHARGING INTEREST UNDER SECTION 234-A OF THE ACT. HOWEVER, WHILE COMPUTING TAX LIABILITY IN COMPUTATION FORM IN ITNS-150, THE AMOUNT OF INTEREST UNDER SECTION 234- A WAS NOT INCLUDED. SUBSEQUENTLY, THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 154 TO RECTIFY THE MISTAKE. THE ORDER PASSED BY THE ASSESSING OFFICER CHARGING INTEREST UNDER SE CTION 234-A IN ALL THE FOUR YEARS WAS UPHELD UPTO ITAT VIDE ORDER DATED 10/08/2007 IN I.T. APPEA L NOS. 4107, 4108, 4109 AND 4110 (DEL) OF 2006. 3 I. T. APPEAL NOS. 4107, 4108, 4109 & 4110 (DEL) OF 2005. 4. AGGRIEVED BY THE ORDER OF THE ITAT, THE ASSESSEE PREFERRED APPEALS BEFORE THE HONBLE DELHI HIGH COURT. HONBLE DELHI HIGH COURT VIDE TH EIR JUDGEMENT DATED 17/02/2011 RESTORED THE MATTER TO THE FILE OF THE TRIBUNAL WITH THE DIRECTI ON TO DECIDE THE MATTER AFRESH IN THE LIGHT OF JUDGEMENT IN THE CASE OF ASIA SATELLITE COMMUNICATI ONS CO. LTD. VS. DIT IN I. T. APPEAL NO. 131 OF 2003. HONBLE DELHI HIGH COURT HAS FURTHER DIRECTED THAT THE OTHER ISSUES SHOULD ALSO BE DECIDED AFRESH. 5. AS DIRECTED BY THE HONBLE DELHI HIGH COURT, THE APPEALS WERE FIXED FOR HEARING. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ITAT, DELHI BENCH D IN ORDER DATED 14 TH MARCH, 2011 FOLLOWING THE DECISION OF HONBLE DELH I HIGH COURT IN THE CASE OF ASIA SATELLITE COMMUNICATIONS CO. LTD. VS. DIT [ IN I.T . APPEAL NOS. 131 TO 134 /2003 ] HAS HELD THAT THE SERVICE CHARGES RECEIVED BY THE ASSESSEE F ROM VARIOUS CHANNELS ON ACCOUNT OF BROADCASTING OF THEIR PROGRAMMES THROUGH THE TRANSP ONDERS LOCATED IN THE SATELLITES ARE NOT LIABLE TO BE TAXED AS ROYALTY IN INDIA. ACCORDINGLY, THE ITAT DECIDED THE APPEALS IN FAVOUR OF THE ASSESSEE. IN VIEW OF THESE FACTS THE LD. AR OF THE ASSESSEE SUBMITTED THAT WHEN THE SERVICE CHARGES PAYABLE ARE NOT TAXABLE IN INDIA AS ROYALTY , QUESTION OF LEVY OF INTEREST UNDER SECTION 234-A OF THE ACT WOULD NOT ARISE. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE HAVE GONE THROUGH THE ORDER OF THE ITAT DATED 11 TH MARCH, 2011 WHEREIN ITAT, DELHI BENCH D FOLLOWING THE DECISION OF HONBLE DELHI H IGH COURT IN THE CASE OF ASIA SATELLITE COMMUNICATIONS CO. LTD. VS. DIT (SUPRA) HAS HELD TH AT SERVICES CHARGES RECEIVED BY THE ASSESSEE FROM VARIOUS T.V. CHANNELS ON ACCOUNT OF P ROVIDING FACILITY OF BROADCASTING THEIR PROGRAMMES THROUGH TRANSPONDERS LOCATED IN THE SATE LLITE ARE NOT LIABLE TO BE TAXED AS ROYALTY IN INDIA. SINCE THE AMOUNT IS NOT TAXABLE IN INDIA, Q UESTION OF LEVY OF INTEREST UNDER SECTION 234-A OF THE ACT WILL NOT ARISE. ACCORDINGLY, WE DELETE THE LEVY OF INTEREST UNDER SECTION 234-A IN RESPECT OF ALL THE ASSESSMENT YEARS. 4 I. T. APPEAL NOS. 4107, 4108, 4109 & 4110 (DEL) OF 2005. 7. SINCE WE HAVE HELD THAT THE INTEREST UNDER SECTI ON 234-A OF THE ACT WILL NOT BE LEVIABLE, THE OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE, BECOMES INFRUCTUOUS AND ARE DISMISSED AS SUCH. 8. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEE ARE ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 14 TH OCTOBER, 2011. SD/- SD/- [ R. P. TOLANI ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14 TH OCTOBER, 2011 . *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT.