DCIT (TDS), Chandigarh V. Vodafone South Limited, Mohali

ITA 447/CHANDI/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6702 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Question of law; Non-deduction of tax; Corroborative evidences; Relationship of principal and agent; TDS; Set aside
• Section: 201(1); 250

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B CHANDIGARH !, ' # $ , $ % & ' ( ) , *+ # BEFORE: SMT. DIVA SINGH, JM & SMT.ANNAPURNA GUPTA, AM ./ ITA NOS.317 TO 320/CHD/2019 / A.Y : 2007-08 TO 2010-11 VODAFONE IDEA LIMITED, (EARLIER KNOWN AS VODAFONE SOUTH LTD., WHICH GOT MERGED WITH VODAFONE MOBILE SERVICES LTD. WHICH SUBSEQUENTLY GOT MERGED WITH IDEA CELLULAR LTD. AND CONSEQUENTLY KNOWN AS VODAFONE IDEA LTD. PLOT NO. C-131, ELTOP INDUSTRIAL AREA, PHASE-III, MOHALI. VS THE ACIT (TDS), CHANDIGARH. ./ PAN /TAN NO. : AABCB5847L/AAACB2100P / APPELLANT / RESPONDENT ./ ITA NOS.425 TO 427/CHD/2019 / A.Y : 2011-12 TO 2013-14 VODAFONE IDEA LIMITED, (EARLIER KNOWN AS VODAFONE SOUTH LTD., WHICH GOT MERGED WITH VODAFONE MOBILE SERVICES LTD. WHICH SUBSEQUENTLY GOT MERGED WITH IDEA CELLULAR LTD. AND CONSEQUENTLY KNOWN AS VODAFONE IDEA LTD. PLOT NO. C-131, ELTOP INDUSTRIAL AREA, PHASE-III, MOHALI. VS THE DCIT (TDS), CHANDIGARH. ./ PAN /TAN NO. : AABCB5847L/AAACB2100P / APPELLANT / RESPONDENT & ./ ITA NOS.447 & 448 /CHD/2019 & ITA NOS. 607 & 608/CHD/2019 / A.Y : 2009-10 & 2010-11 & 2011-12 & 2012-13 THE DCIT (TDS), CHANDIGARH. VS M/S VODAFONE SOUTH LTD., C-105, INDUSTRIAL AREA, PHASE-5, MOHALI. ./ PAN /TAN NO. : PTLH10739B / APPELLANT / RESPONDENT ! / ASSESSEE B Y : SH.SALIL KAPOOR & MS. SOUMYA SINGH, ADVOCATES ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 2 OF 31 ' ! / REVENUE BY : SHRI G.S.PHANI KISHORE, CIT-DR & SHRI APUL JAYASWAL, SR.DR # $ %/ DATE OF HEARING : 18.07.2019 &'() %/ D ATE OF PRONOUNCEMENT : 31.07.2019 *./ ORDER PER BENCH THESE 11 APPEALS HEARD TOGETHER ARE BEING DECIDED BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE. SEVEN OF THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE WHICH PERTA IN TO 2007-08 TO 2013-14 ASSESSMENT YEARS WHEREIN THE CORRECTNESS OF THE SEPARATE ORDERS OF CIT(A)-2 CHAN DIGARH IS ASSAILED ON IDENTICAL GROUNDS AND IN THE FOUR DEPAR TMENTS APPEALS PERTAINING TO 2009-10 TO 2012-13 ASSESSMENT YEARS, THE ISSUES RAISED IN THE RESPECTIVE ORDERS WERE ALS O STATED TO BE IDENTICAL. ACCORDINGLY, WITH THE CONSENT OF THE PARTIES, A COMMON ORDER IS BEING PASSED IN THESE APPEALS. 2. THE ASSESSEE HAS ASSAILED THE FINDING THAT THE A SSESSEE IS IN DEFAULT FOR NON DEDUCTION OF TDS IN TERMS OF THE REQUIREMENT OF SECTION 194H FOR THE PRE-PAID CHEQUE S FOR SIM. THE REVENUE HAS ASSAILED THE RELIEF GRANTED TO THE ASSESSEE WHEREIN ON THE ROAMING CHARGES IT HAS BEEN HELD THAT TDS WAS NOT ATTRACTED IN TERMS OF SECTION 194J OF THE ACT. 3. TAKING UP THE ASSESSEE'S APPEALS FIRST, IT WAS A COMMON STAND THAT THE FACTS, CIRCUMSTANCES AND POSITION OF LAW IN ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 3 OF 31 EACH OF THE ASSESSEE'S APPEALS REMAIN IDENTICAL. AC CORDINGLY, IT HAS BEEN CANVASSED THAT THE ARGUMENTS ADVANCED I N ITA 317/CHD/2019 PERTAINING TO 2007-08 ASSESSMENT YEAR MAY BE APPLIED TO EACH OF THE REMAINING APPEALS. 4. HOWEVER, CONSIDERING THE FACT THAT THE REJECTION OF ASSESSEE'S CLAIM HAS BEEN MAINTAINED BY THE TAX AUT HORITIES RIGHT UPTO 2013-14 ASSESSMENT YEAR AS PER THE PRESE NT BUNCH OF APPEALS AND SINCE THIS IS THE LATEST ORDER IN POINT OF TIME ON SAME SET OF FACTS, CIRCUMSTANCES AND POS ITION OF LAW, THUS KEEPING IN MIND THE ARGUMENT THAT THE GRO UNDS RAISED IN ITA 427/CHD/2019 ARE ALSO IDENTICAL, THE PARTIES WERE REQUIRED TO ADDRESS THEIR ARGUMENTS ADDRESSING THE FACTS IN THE SAID APPEAL ON RECORD UNLESS THERE IS AN ADDED REASONING IN 2008-09 ASSESSMENT YEAR. CONSIDERING THE RECORD, THE PARTIES AGREED THAT THE FACTS AS TAKEN INTO CONSIDERATION BY THE CIT(A) IN HIS LATEST ORDER PER TAINING TO 2013-14 ASSESSMENT YEAR AS THE LATEST POSITION AVA ILABLE IN LAW WOULD BE REFERRED TO AS IT WOULD BRING OUT THE COMPLETE FACTS. IN VIEW THEREOF, THE GROUNDS RAISED IN ITA 427/CHD/2019 ARE EXTRACTED HEREUNDER : THE APPELLANT RESPECTFULLY SUBMITS THAT: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGARH [' LEARNED CIT(A)'] HAS ERRED IN PASSING THE ORDER UNDER SECTI ON 250 OF THE INCOME TAX ACT, 1961 ('ACT'), CONFIRMING THE CONTEN TIONS OF THE ASSISTANT COMMISSIONER OF INCOME TAX OFFICER (TDS) - CHANDIGARH ('LEARNED TDS OFFICER') THAT THE APPELLANT IS LIABL E TO DEDUCT TAX AT ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 4 OF 31 SOURCE ON DISCOUNT EXTENDED TO ITS PREPAID DISTRIBU TORS AS PER THE PROVISIONS OF THE SECTION 194H OF THE INCOME TAX AC T, 1961 ('ACT'). EACH OF THE GROUND IS REFERRED TO SEPARATELY, WHICH MAY KINDLY BE CONSIDERED INDEPENDENT OF EACH OTHER: 1. GROUND NO. 1 - THE ORDER PASSED BY THE LEARN ED CIT(A) IS BAD IN LAW 1.1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, AND IN VIEW OF THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS SPICE INFOTAINMENT (CA 285 OF 2014), THE ORDER PASS ED BY THE LEARNED CIT(A) IS 'BAD IN LAW' SINCE THE SAME HAS BEEN PASS ED IN THE NAME OF VODAFONE SOUTH LIMITED WHICH DID NOT EXIST AS ON TH E DATE OF PASSING THE APPELLATE ORDER UNDER SECTION 250 OF THE ACT. HENCEFORTH ALL THE GROUNDS ARE WITHOUT PR EJUDICE TO GROUND NO. 1 2. GROUND NO. 2 - THE APPELLANT IS NOT LIABLE TO DE DUCT TAX AT SOURCE ON DISCOUNT EXTENDED TO ITS PRE-PAID DISTRIBUTORS O N DISTRIBUTION OF PRE- PAID SERVICES 2.1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A)/TDS OFFICER HAVE ERRED IN UPHOLDING THE APPE LLANT AS AN 'ASSESSEE IN DEFAULT' FOR NON-DEDUCTION OF TAX AT S OURCE UNDER SECTION 194H OF THE ACT ON DISCOUNT AMOUNTING TO INR 33,53, 59,310 EXTENDED TO THE DISTRIBUTORS OF ITS PRE-PAID SERVICES AND THERE BY, ERRED IN COMPUTING DEMAND UNDER SECTION 201(1)/201(1A) OF THE ACT. 2.2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A)/TDS OFFICER HAVE ERRED IN HOLDING THAT THE R ELATIONSHIP BETWEEN THE APPELLANT AND THE PRE-PAID DISTRIBUTORS IS NOT THAT OF 'PRINCIPAL TO PRINCIPAL' AND THE DISCOUNT ALLOWED TO THEM IS IN N ATURE OF 'COMMISSION' LIABLE FOR TAX DEDUCTION AT SOURCE AS ENVISAGED UND ER SECTION 194H OF THE ACT. 2.3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A)/TDS OFFICER HAVE ERRED IN NOT APPRECIATING T HE FACT THAT THERE IS NO PAYMENT/CREDIT TO THE ACCOUNT OF DISTRIBUTORS BY THE APPELLANT TOWARDS THE DISCOUNT EXTENDED TO THEM AND THEREFORE , PROVISIONS OF SECTION 194H OF THE ACT DO NOT APPLY ON SUCH DISCOU NT. 2.4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A)/TDS OFFICER HAVE ERRED IN NOT APPRECIATING T HAT DISCOUNT ALLOWED BY THE APPELLANT IS NOT INCOME IN THE HANDS OF ITS DISTRIBUTORS AND THAT INCOME, IF ANY, ARISES ONLY WHEN THE PRE-P AID SERVICES ARE FURTHER DISTRIBUTED BY THE DISTRIBUTORS. 2.5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A)/TDS OFFICER HAVE ERRED IN NOT APPRECIATING T HE FACT THAT THERE IS NO FLOW OF MONIES FROM THE APPELLANT TO THE DISTRIB UTOR OF PRE-PAID SERVICES BUT RATHER FROM THE DISTRIBUTOR TO THE APP ELLANT, AND HENCE, THE PROVISIONS OF SECTION 194H OF THE ACT FAIL TO APPLY . ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 5 OF 31 2.6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A)/TDS OFFICER HAVE ERRED IN NOT APPRECIATING T HE DIFFERENCE IN NATURE OF DISTRIBUTION ARRANGEMENT ENTERED BY THE A PPELLANT UNDER PREPAID MODEL AND POST-PAID MODEL. 2.7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A)/ TDS OFFICER HAS ERRED IN TOTALLY IGNORING T HAT THE ARRANGEMENT WITH THE POST-PAID DISTRIBUTORS IN ON 'PRINCIPAL TO AGENT' WHILE UNDER PREPAID MODEL IT IS ON 'PRINCIPAL TO PRINCIPAL' BAS IS AND HENCE, THE CONCLUSION OF THE LEARNED TDS OFFICER THAT BOTH THE ARRANGEMENTS ARE IDENTICAL IS GROSSLY INCORRECT. 2.8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED C1T(A)/TDS OFFICER HAS ERRED PLACING RELIANCE ON TH E DECISION OF THE DELHI HIGH COURT IN THE CASE OF IDEA CELLULAR AND T HE KERALA HIGH COURT IN THE CASE OF VODAFONE ESSAR CELLULAR LIMITE D, WITHOUT APPRECIATING THAT THE FACTS IN THOSE CASES WERE DIF FERENT FROM THE FACTS OF THE APPELLANT'S CASE. 2.9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) HAS GROSSLY ERRED IN NOT TAKING ANY COGNIZAN CE OF THE LATEST FAVORABLE JUDGMENT IN APPELLANT'S OWN CASE. 2.10. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) HAS ERRED IN SUMMARILY REJECTING THE GROUNDS ON DOUBLE RECOVERY UNDER SECTION 201(1) OF THE ACT, WITHOUT E VEN CONSIDERING THE CONTENTION OF THE APPELLANT. 2.11. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE ORDER OF THE LEARNED CIT(A)/TDS OFFICER IS BAD IN LAW IN SO FAR IT SEEKS TO RECOVER TAX DEMAND UNDER SECTION 201 OF THE ACT IN CONTRADICTION TO THE SETTLED PRINCIPLE THAT THE PAYER CANNOT BE HELD LIA BLE FOR PAYMENT OF THE TAX DEMAND IN CASES INVOLVING NON-DEDUCTION OF TAX AT SOURCE AND ONLY INTEREST LIABILITY UNDER SECTION 201(1A) OF THE ACT , IF ANY, CAN BE LEVIED IN SUCH CASES. 5. THE LD. AR INVITING ATTENTION TO THE ORDER PASSE D BY THE AO U/S 201(1) R.W.S. 201(1A) OF THE ACT SUBMITTED T HAT THE AO HAS HELD THE ASSESSEE TO BE IN VIOLATION OF THE REQUIREMENTS OF SECTION 194H AND HENCE IN DEFAULT F OR NOT DEDUCTING TDS FOR THE AMOUNTS PERTAINING TO THE PRE -PAID SIM CARDS TO ITS DISTRIBUTORS ETC. 5.1 REFERRING TO THE RECORD, IT WAS SUBMITTED THAT IN EACH OF THE YEARS ASSAILED AN IDENTICAL ORDER AND REASONING HAS BEEN ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 6 OF 31 GIVEN. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEF ORE THE CIT(A) STATING THAT VARIOUS JUDICIAL FORUMS HAVE HE LD ON SIMILAR SET OF FACTS AND CIRCUMSTANCES CONSIDERING SIMILAR AGREEMENTS ENTERED INTO BETWEEN THE PARTIES THAT WI THHOLDING TAX PROVISIONS U/S 194H ARE NOT APPLICABLE TO DISCO UNT EXTENDED TO PRE-PAID DISTRIBUTORS ON TRANSFER OF PR E-PAID SIM CARDS/TALK TIME. IT WAS SUBMITTED THAT THOUGH THE WRITTEN SUBMISSIONS OF THE ASSESSEE HAVE BEEN EXTRACTED IN PART IN THE ORDERS, HOWEVER, WITHOUT ASSIGNING ANY SPECIFIC REASONING, RELIEF HAS NOT BEEN GRANTED. REFERRING TO THE RECORD, IT WAS SUBMITTED THAT RELIANCE HAD BEEN PLA CED UPON THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF OF BHARTI AIRTEL (2015) 372 ITR 33 (KHC) AND ORD ER OF THE BENGALORE BENCH IN THE CASE OF VODAFONE SOUTH LTD. VS DCIT DATED 31.07.2005 I.E. IN THE CASE OF ASSESSEE ITSEL F. THE KARNATAKA HIGH COURT, IT WAS SUBMITTED IN 72 TAXMAN N 347 HAS AFFIRMED THE DECISION. SIMILAR REASONING ON FAC TS IT WAS SUBMITTED, IS AVAILABLE IN ASSESSEE'S FAVOUR IN THE DECISION OF THE RAJASTHAN HIGH COURT IN THE CASE OF VODAFONE DI GITAL LINK LTD. IT WAS SUBMITTED, HAD ALSO BEEN RELIED UP ON. 5.2 IT WAS SUBMITTED THAT WITHOUT ADDRESSING THE LE GAL POSITION, THE CIT(A) FOLLOWING THE PAST PRACTICE RE JECTED THE ASSESSEE'S CLAIM. AS A RESULT OF THESE ACTIONS, THE PRESENT APPEALS HAVE BEEN FILED. ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 7 OF 31 5.3 RELYING UPON THE SYNOPSIS FILED, IT WAS HIS SUB MISSION THAT THE POINT AT ISSUE IS FULLY COVERED IN ASSESSE E'S FAVOUR. APART FROM THE AFORESAID DECISIONS CITED BEFORE THE CIT(A), RELIANCE WAS FURTHER PLACED UPON THE FOLLOWING ORDE RS OF THE ITAT : I) VODAFONE ESSAR GUJARAT LIMITED (NOW AMALGAMATED WIT H THE APPELLANT) (IN ITA NO. 386/AHD/L 1) (AHMEDABAD BENCH OF THE TRIBUNAL) II) VODAFONE EAST LIMITED (NOW AMALGAMATED WITH THE APPELLANT ITSELF) (ITA 1499- 1502/KOL/2015, ITA 136-137/KOL/2016, ITA 1537-1540/ KOL/2015] (KOLKATA BENCH OF THE TRIBUNAL) III) VODAFONE SOUTH LIMITED (NOW AMALGAMATED WITH T HE APPELLANT) (ITA NOS. 601 & 602/B/13; 618 TO 621/B/14 AND ITA. 956 & 957) (BANG ALORE BENCH OF THE TRIBUNAL); IV) VODAFONE SPACETEL LIMITED (NOW AMALGAMATED WITH THE APPELLANT ITSELF) (ITA NOS. 76- 77/PAT/2012) (PATNA BENCH OF THE TRIBUNAL), V) VODAFONE CELLULAR LIMITED (NOW AMALGAMATED WIT H APPELLANT ITSELF) (ITA NOS. 817, 818, 1577, 1578, 1961 & 1962/PUN/2013) (PUNE BENCH OF THE TRIBUNAL) VI) VODAFONE CELLULAR LIMITED (NOW AMALGAMATED WIT H APPELLANT ITSELF) (ITA NO. 2804 & 1644/MDS/2014 & 376 & 377/MDS/2015), VODAFONE SOUTH LIMITED (NOW AMALGAMATED WITH APPELLANT ITSELF) (ITA NO. 1414 & 1415/MDS/2014)(CHENNAI BENCH OF THE TRIBUNAL) VII) VODAFONE DIGILINK LIMITED (NOW AMALGAMATED WIT H APPELLANT ITSELF) (ITA NOS. 67 TO 69/JP/2015) (JAIPUR BENCH OF THE TRIBUNAL) VIII) TATA TELESERVICES (MAHARASHTRA) LIMITED (ITA NO. 2045/MUM/2014) (MUMBAI BENCH OF THE TRIBUNAL) 5.4 THE LD. AR IN ALL FAIRNESS SUBMITTED THAT FOR THE SAKE OF COMPLETENESS, IT WAS HIS DUTY TO INVITE ATTENTIO N TO THE DECISIONS AGAINST THE ASSESSEE AVAILABLE IN PUBLIC DOMAIN WHICH WERE RENDERED BY THE KERALA HIGH COURT, DELHI HIGH COURT AND THE CALCUTTA HIGH COURT. THESE CONTRARY V IEWS EXPRESSED BY THE RESPECTIVE COURTS, IT WAS SUBMITTE D, HAVE BEEN FULLY ADDRESSED BY THE HON'BLE KARNATAKA HIGH COURT AND RAJASTHAN HIGH COURT IN THEIR DECISIONS. THUS, IT WAS ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 8 OF 31 HIS ARGUMENT THAT THE LATEST DECISIONS OF THE HIGH COURTS AND THE CONSISTENT ORDERS OF THE ITAT ARE AVAILABLE IN FAVOUR OF THE ASSESSEE. IT WAS ALSO HIS SUBMISSION THAT TH ERE IS NO DECISION OF THE JURISDICTIONAL HIGH COURT. ACCORDI NGLY, RELYING UPON THE PROPOSITION THAT IN CASE THERE ARE CONTRARY VIEWS OF THE HIGH COURTS THEN RELYING UPON THE DECI SION OF THE APEX COURT IN THE CASE OF CIT VS VEGETABLE PROD UCTS (1973) 88 ITR 192 (S.C), IT WAS HIS SUBMISSION THAT THE ISSUE HAS TO BE DECIDED IN FAVOUR OF THE ASSESSEE. IT WAS HIS SUBMISSION THAT THE SAID POSITION OF LAW HAS REPEAT EDLY BEEN FOLLOWED BY THE VARIOUS BENCHES OF THE ITAT THAT WH EREVER THE DECISION OF THE JURISDICTIONAL HIGH COURT WAS N OT AVAILABLE AND THERE WERE CONTRARY VIEWS EXPRESSED B Y DIFFERENT HIGH COURTS, THE VIEW FAVOURABLE TO THE A SSESSEE HAD TO BE FOLLOWED. FOR THE SAID PROPOSITION, RELI ANCE WAS ALSO PLACED UPON THE DECISION OF THE SPECIAL BENCH RENDERED BY FIVE MEMBERS IN THE CASE OF NARANG OVERSEAS P.LT D. REPORTED IN 111 ITD 1 (MUM) (SB). 5.5 APART FROM THE DECISIONS CITED, IT WAS HIS SUBM ISSION THAT THE ASSESSEE HAS FILED A SEPARATE PAPER BOOK O F CASE LAWS ADDRESSING THE ISSUES WHICH HAVE CAME UP FOR CONSIDERATION U/S 194H ON WHICH THE ASSESSEE IS PLA CING HEAVY RELIANCE. RELEVANT DECISIONS CITED READ AS U NDER : ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 9 OF 31 1. BHARTI AIRTEL LID. VS. DC1T [2015 372 ITR 33| KA RNATAKA HIGH COURT 2. HINDUSTAN COFCA COLA BEVERAGES (P.) (LTD.) VS. C IT, JAIPUR [2017 87 TAXMANN.COM 295] RAJASTHAN HIGH COURT 3. TATA TELESERVICES (MAHARASHTRA) LIMITED VS ACIT, TDS-3(1) (ITA NOS. 2043 TO 2045/MUM/2014) (MUMBAI TRIBUNAL) 4. TATA SKY LTD. VS. ACIT, MUMBAI [68 ITR (T) 1621 5. VODAFONE SPACETEL LIMITED VS ACIT, TDS (ITA NOS. 76-77/PAT/2012) (PATNA TRIBUNAL) 6. VODAFONE CELLULAR LIMITED VS. DY CIT (TDS-1) (IT A NOS. 817,818 1577, 1578,1961 & 1962 /PUN/2013) (PUNE TRIBUNAL) 7. TATA TELESERVICES LIMITED VS THE ITO, TDS-1, JAI PUR (ITA NOS. 309/JP/2012, 502,503, 504 & 505/JP/2011) JAIPUR TRIBUNAL 8. IDEA CELLULAR LIMITED VS ITO (ITA NO. 356,357,35 8 AND 359/JP/2012) JAIPUR TRIBUNA 9. VODAFONE SOUTH LIMITED VS DEPUTY COMMISSIONER O F INCOME TAX (ITA NOS. 601 & 602/B/13; 618 TO 621/B/14 AND ITA. 956 & 957) BANGA LORE IT AT BENCH 10. ACIT VS. RELIANCE COMMUNICATIONS [ITA 4677/M/20 12 & 6726/M/2012] (MUMBAI TRIBUNAL) 11. CIT VS. QATAR AIRWAYS [2011 332 ITR 2531 BOMBAY HIGH COURT 12. VODAFONE SOUTH LTD. VS. DCIT [2016 66 TAXMANN.C OM 15] AP HIGH COURT 13. VODAFONE ESSAR GUJARAT LTD. VS. ACIT [2015 60 T AXMANN.COM 15] AHMEDABAD TRIBUNAL 14. BHARTI HEXACOM LTD. VS. ITO (TDS) II, JAIPUR [4 2 ITR(T) 6861 15. VODAFONE CELLULAR LTD. VS, DCIT (ITA 1414 & 141 5/MDS/2014) DATED 21.09.2017 (CHENNAI TEIBUNAL) 16. JAGRAN PRAKASHAN LIMITED (ALLAHABAD HC) 345 ITR 288 5.6 OVER AND ABOVE THE DECISIONS, ATTENTION WAS F INALLY INVITED ALSO TO THE ORDER DATED 30.05.2018 OF THE C HANDIGARH BENCH RENDERED IN THE CASE OF M/S BHARTI AIRTEL LTD . V ITO IN ITA 340/CHD/2013. THE SAID ORDER, IT WAS SUBMITTED , IS AUTHORED BY THE LD. ACCOUNTANT MEMBER. ACCORDINGLY, IT WAS HIS SUBMISSION THAT THE ISSUE IS FULLY COVERED IN F AVOUR OF THE ASSESSEE AND THE ADDITION, ACCORDINGLY, MADE MA Y BE DELETED. ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 10 OF 31 6. THE LD. CIT-DR PLACED HEAVY RELIANCE ON THE RESP ECTIVE IMPUGNED ORDERS. INVITING ATTENTION TO THE FINDING OF THE CIT(A), AVAILABLE IN PARA 5.4.7 AND 5.4.8 IN 2013-1 4 ASSESSMENT YEAR, THE LD. CIT-DR CARRYING US THROUGH THE SAME, DISPUTED THE ARGUMENT THAT THERE WAS SIMILARI TY OF FACTS IN THE CASE OF THE PRESENT ASSESSEE VIS-A-VIS THE FACTS CONSIDERED IN THE FAVOURABLE DECISION CITED IN THE CASE OF THE OTHER ASSESSEES. FOR READY REFERENCE, THE RELEVANT FINDINGS RELIED UPON IS EXTRACTED HEREUNDER : 5.4.7 IT IS ALSO PERTINENT THAT THE SAME ENTITY TIL L AY 2006-07 (FY 2005-06) HAD BEEN DEDUCTING TDS ON DISCOUNTS TO DISTRIBUTORS ON PRE-P AID SIMS AND OTHER SERVICES. THIS GETS REVEALED FROM THE STATEMENT GIVEN DURING THE ASSESSMENT PROCEEDINGS FOR THE FY 2005-06. TO QUOTE THE RELEVANT EXCERPTS ARE AS UNDER: 'AT THE VERY OUTSET, WE WISH TO SUBMIT THAT FOR THE FY 2005-06 AND TILL 31 ST DECEMBER 2006, THE AGREEMENT BETWEEN VSL-PUNJAB AND THE DISTRIBUTORS WAS ON 'PRINCIPAL TO AGENT' BASIS, WHE REIN VSL-PUNJAB PAID COMMISSION TO THE PRE-PAID DISTRIBUTORS AND DE DUCTED TAX AT SOURCE THEREON. HOWEVER, WITH EFFECT FROM JANUARY 2 007 THE ARRANGEMENT BETWEEN VSL-PUNJAB AND THE PRE-PAID DIS TRIBUTORS HAS CHANGED TO 'PRINCIPAL TO PRINCIPAL'. THUS THE QUEST ION OF TREATING VSL-PUNJAB AS AN 'ASSESSEE-IN-DEFAULT' FOR FY 20005 -06 AND FOR THE PERIOD APRIL 1, 2006 TO DECEMBER 31, 2006 DOES NOT ARISE AS VSL- PUNJAB HAD DEDUCTED TAXES AT SOURCE ON THE COMMISSI ON PAID TO THE PRE-PAID DISTRIBUTORS. WE CAN PROVIDE THE AGREEMENT COPIES IF REQUIRED BY THE DEPARTMENT.' IT IS CLEAR THAT THE DECISION TO DISCONTINUE DEDUCT ION OF TAXES WAS BASED ON CHANGE IN AGREEMENT FROM 'PRINCIPAL TO AGENT' BASED TO 'PRINCIPAL TO PRINCIPAL' BASIS. MERE CHANGE IN AGREEMENT DOESN'T ALTER THE B ASIC CHARACTER OF THE RELATIONSHIP BETWEEN THE SERVICE PROVIDER AND THE D ISTRIBUTOR. THIS ISSUE OF THE RELATIONSHIP BEING BETWEEN 'PRINCIPAL 8S AGENT', HA S, EVEN OTHERWISE, BEEN DEALT WITH IN THE PRECEDING PARAGRAPHS. 5.4.8 AO MADE THE ADDITION ON THE GROUND THAT, S AME CHANNEL OF DISTRIBUTORS SELLING THE POST-PAID SIM CARDS, ALSO SELL THE PREP AID AND RECHARGE VOUCHERS AND THUS THE SERVICES BEING OFFERED BY THE DISTRIBUTORS ARE SIMILAR. THUS THE NATURE OF INCOME EARNED BY DISTRIBUTORS IN ITS VERY SUBSTANCE AND EFFECT IS COMMISSION WHICH IS PAID FOR SERVICES RENDERED BY THE NET WORK OF DISTRIBUTORS. ON AN ANALYSIS OF FACTS, IT IS CLEAR THAT IN THE CASE OF THE TELECOM OPERATORS THE MARGIN ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 11 OF 31 RETAINED BY THE DISTRIBUTORS ( ON SALE OF PREPAID S IM CARDS AND RECHARGE VOUCHERS) WHICH. IS TERMED AS DISCOUNT IS NOTHING B UT COMMISSION PAYMENT FOR THE SERVICES RENDERED BY THE DISTRIBUTORS ON WHICH, LIKE IN THE CASE OF POSTPAID CONNECTION, TDS IS REQUIRED TO BE DEDUCTED UNDER SE CTION 194H . IN THIS REGARD REFERENCE IS ALSO DRAWN TO THE ALLUSION MADE, TO THE APEX COURT'S ORDER, IN THE ORDER OF THE KERALA HIGH COU RT WHILE DEALING WITH THE CASE OF VODAFONE ESSAR CELLULAR LTD. THE FACTS WERE THAT BLP MOBILE CELLULAR LTD, WHOSE BUSINESS IN KERALA HAD BEEN TAKEN OVER BY VOD AFONE ESSAR LTD, FOR THE SAME TRANSACTION I.E SALE OF SIM CARDS AND RECHARGE COUPNS THROUGH DISTRIBUTORS UNDER THE PRE-PAID SCHEME, ALONGWITH BSNL CONTESTED SALES TAX LIABILITY STATING THAT THE TRANSACTION DID DOT INVOLVE SALE OF GOODS BUT WAS ONLY RENDERING SERVICES. THE COURT HAD, AFTER REFERRING TO THE JUDGEMENT OF SUPREME COURT IN BSNL VS. UNION OF INDIA. (EMPHASIS SUPPLIED) 6.1 RELYING UPON THE SAME IT WAS HIS SUBMISSION TH AT THE CIT(A) HAS TAKEN INTO CONSIDERATION THAT THERE WAS A CHANGE IN THE AGREEMENT BETWEEN VSL PUNJAB I.E. ASSESSEE A ND THE DISTRIBUTORS. AS PER THE CLAIM PUT FORTH IN THE EA RLIER YEARS, THE CIT(A) CONSIDERED THAT THE ASSESSEE WAS ACTING ON A PRINCIPAL TO AGENT BASIS AND IN THE YEAR UNDER CONSIDERATION, IT WAS CLAIMED THAT THE NATURE OF RESPONSIBILITIES AND CONTRACTUAL OBLIGATIONS ARE BEING DISCHARGED WERE O N A PRINCIPAL TO PRINCIPAL BASIS. THE CLAIM, IT WAS SUBMITTED, APPEARS TO HAVE NOT BEEN ACCEPTED BY THE CIT(A). T HE ARGUMENTS OF THE LD. AR THAT THE TERMS OF AGREEMENT S ARE IDENTICAL TO THE TERMS AND AGREEMENTS AS CONSIDERED BY THE HON'BLE KARNATAKA HIGH COURT, IT WAS SUBMITTED, WER E NOT BORNE OUT FROM THE ORDER OF THE CIT(A). ACCORDINGLY , IT WAS HIS SUBMISSION THAT THE ARGUMENT THAT THERE WAS A S IMILARITY ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 12 OF 31 ON FACTS, CANNOT BE SAID TO HAVE SUPPORTED BY THE O RDERS AS THIS CONCLUSION IS NOT COMING OUT FROM THE RECORD. 7. THE LD.AR IN RESPONSE SUBMITTED THAT THE ASSESSE E ALL ALONG OVER THE YEARS HAS BEEN ARGUING THAT THE DECI SION OF THE KARNATAKA HIGH COURT IS ON THE SAME SET OF FACT S. INVITING ATTENTION TO THE PAPER BOOK PAGE 31 TO 33, IT WAS SUBMITTED THAT THE ASSESSEE HAS MADE SIMILAR ARGUME NTS BEFORE THE CIT(A) AS PER THE WRITTEN SUBMISSIONS DA TED 04.10.2018 WHICH IS PART OF THE DETAILED SUBMISSION S INDICATED AT SR.NO. 2 AT PAGES 15-122. REVERTING T O PAGES 31-32 IT WAS HIS SUBMISSION THAT THE ASSESSEE HAS SPECIFICALLY DRAWN ATTENTION TO THE SPECIFIC CLAUSE S AND THE WORDINGS IN THE AGREEMENT AS CONSIDERED BY THE DECI SIONS CONSIDERED BY HON'BLE KARNATAKA HIGH COURT AND AVAI LABLE IN THE FACTS OF THE ASSESSEE'S CASE. ACCORDINGLY, IT WAS SUBMITTED THAT IT CANNOT BE SAID THAT THE ASSESSEE DID NOT DRAW ATTENTION OF THE CIT(A) TO THE FACTS THAT THE TERMS AND CONDITIONS OF THE CONTRACTS CONSIDERED BY THE HON'B LE COURT AND IN THE CASE OF THE ASSESSEE WERE IDENTICAL. REF ERRING TO THE IMPUGNED ORDER IT WAS HIS SUBMISSION THAT THE FIRST APPELLATE AUTHORITY INFACT HAS NOT GIVEN ANY NEGATIVE FINDING AND INFACT HAS NOT CARE D TO DIRECTLY ADDRESS THIS ISSUE AND HAS SKIRTED IT. ACCORDIN GLY, IT WAS HIS PRAYER THAT IN THE ABSENCE OF ANY ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 13 OF 31 DIRECT FINDING AGAINST THE ASSESSEE IN THE FACE OF THE CONSISTENT DECISIONS ON THE ISSUE, THE CLAIM BE ALL OWED. 8. THE LD. CIT-DR ON THE OTHER HAND, CONSIDERING TH E WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A) REFERRE D TO BY THE LD. AR AGREED THAT A CLAIM APPEARS TO HAVE BEEN MAD E WHICH HAS NOT BEEN ADDRESSED. IN THE CIRCUMSTANCES HE MA DE A PRAYER THAT THE MATTER MAY BE REMANDED BACK FOR CON SIDERING WHETHER THE TERMS AND CONDITIONS OF THE AGREEMENTS ARE IDENTICAL. THE LD. AR CONSIDERING THE SAID REQUEST AGREED THAT TO THE EXTENT OF VERIFICATION ON FACTS I.E. TH E TERMS AND CONDITIONS IN THE AGREEMENTS IN THE PRESENT PROCEED INGS WERE MATERIALLY IDENTICAL TO THE TERMS AND CONDITIONS IN THE AGREEMENTS AVAILABLE TO THE HON'BLE KARNATAKA HIGH COURT AND IN ASSESSEE'S CASES CONSIDERED BY THE ITAT HE W OULD NOT OBJECT TO THE ISSUE BEING REMANDED. HOWEVER, AS FA R AS THE LEGAL ISSUE IS CONCERNED, IT WAS HIS PRAYER THAT IT MAY BE DECIDED IN TERMS OF THE CONSISTENT DECISIONS WHICH ARE IN FAVOUR OF THE ASSESSEE. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY THE LEGAL ISSUE AS FAR AS THE TRIBUNALS AND AUTHORITIES WITHIN THE TER RITORIAL JURISDICTION OF THE KARNATAKA HIGH COURT AND THE RA JASTHAN HIGH COURT ARE CONCERNED, THERE IS NO DOUBT THAT TH E ISSUE ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 14 OF 31 STANDS CONCLUDED IN FAVOUR OF THE ASSESSEE. ADMITTE DLY FOR THE TRIBUNALS AND THE AUTHORITIES WHICH ARE IN THE TERRITORIAL JURISDICTION OF THE KERALA HIGH COURT, DELHI HIGH C OURT AND THE CALCUTTA HIGH COURT ARE CONCERNED, THE ISSUE CA N BE CONSIDERED TO BE SETTLED AGAINST THE ASSESSEE. THER E IS NO DECISION AVAILABLE ON THE ISSUE OF THE JURISDICTION AL HIGH COURT IS AN UNDISPUTED FACT. THE ISSUE, THUS, WHICH ARISES FOR CONSIDERATION IN THE PRESENT PROCEEDINGS IS WHA T WOULD CONSTITUTE A BINDING PRECEDENT IN THESE PECULIAR FA CTS AND CIRCUMSTANCES FOR THE COURTS AND THE TRIBUNALS WHER E THERE IS NO DECISION OF A JURISDICTIONAL HIGH COURT AVAIL ABLE. THE SAID ISSUE HAS BEEN ADDRESSED BY THE APEX COURT IN THE CASE OF CIT VS VEGETABLE PRODUCTS (1973) 88 ITR 192 (S.C ) WHERE THE COURT WAS PLEASED TO HOLD THAT IF THE COURT FINDS THAT THE LANGUAGE OF A TAXING PROVISION IS AMBIGUOUS OR CAPABLE OF MORE MEANINGS, THEN THE COURT HAS TO ADOPT THAT INTERPRETATION WHICH FAVOURS THE ASSESSEE. THE PRINCIPLE HAS BEEN FOLLOWED BY THE SPECIAL BENCH IN THE CASE OF NARANG OVERSEAS (CITED SUPRA) AND HAS COME UP FOR CONSIDERATION VARIOUSLY AND REPEATEDLY BY DIFFERENT HIGH COURTS. REFERENCE MAY BE MADE TO THE DECISION OF THE APEX COURT IN TH E CASE OF CIT VS MADHO PRASAD JATIA 105 ITR 179 (S.C) WHEREIN THE COURT FACED WITH DIVERGENT INTERPRETATIONS ON THE L EGAL ISSUE PREFERRED TO TAKE THE VIEW IN FAVOUR OF THE SUBJECT HOLDING ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 15 OF 31 THAT THOUGH THERE IS NO EQUITY IN TAX LAWS BUT IF FROM AMONGST THE TWO VIEWS AVAILABLE, THE INTERPRETATION IN FAVOUR OF THE SUBJECT IS ALSO IN CONSONANCE WITH ORDINARY NOTIONS OF EQUITY AND FAIRNESS, SUCH A VIEW WOULD FURTHER FORT IFY THE COURT IN ADOPTING SUCH A COURSE. SIMILARLY IN CIT VS J.K. HOSIERY FACTORY 159 ITR 85 (S.C) THE APEX COURT HELD THAT WHERE TWO INTERPRETATIONS WERE POSSIBLE, THE COURT COULD TAKE THE INTERPRETATION THAT IS FAVOURABLE TO THE A SSESSEE BEARING IN MIND THAT A TAXING STATUTE IS BEING CONS TRUED. THUS, IN CASE OF CLEAVAGE OF OPINIONS, THE ISSUE IS WELL SETTLED THAT IN THE ABSENCE OF DECISION OF THE JURI SDICTIONAL HIGH COURT, THE BINDING PRECEDENT FOR THE TRIBUNALS AND AUTHORITIES WOULD BE THE DECISIONS IN FAVOUR OF THE ASSESSEE NOT ONLY ON THE PRINCIPLES OF AMBIGUITY BUT ALSO ON THE PRINCIPLE THAT THESE DECISIONS ARE LATEST IN POINT OF TIME. ACCORDINGLY, THE LEGAL ISSUE ON FACTS TO BE ESTABLI SHED STANDS CONCLUDED IN FAVOUR OF THE ASSESSEE. 10. THE ISSUE WHICH NEXT COMES UP FOR CONSIDERATIO N IN THESE PECULIAR FACTS AND CIRCUMSTANCES IS THAT ADMI TTEDLY THE ASSESSEE HAS CONSISTENTLY CLAIMED THAT THE TERMS AN D CONDITIONS OF THE AGREEMENT OF THE ASSESSEE WITH TH E PARTIES IS IDENTICAL TO THE TERMS AND AGREEMENTS TAKEN INTO CONSIDERATION BY THE HON'BLE KARNATAKA AND RAJASTHA N HIGH COURT. THE SAID ISSUE ON FACTS, IT IS SEEN HAS BEE N LEFT ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 16 OF 31 UNADDRESSED, BOTH BY THE AO AND THE CIT(A) IN THE R ESPECTIVE YEARS. ACCORDINGLY, WE DEEM IT APPROPRIATE TO SET ASIDE THE ISSUE IN TERMS OF THE PRAYER OF THE LD. CIT-DR WHIC H WAS NOT OPPOSED BY THE LD. AR SUBJECT TO THE DECISION ON LA W BEING ADJUDICATED BY THIS FORUM. THE LAW POINT STANDS CO NCLUDED BY US IN THE PRECEDING PARAS IN FAVOUR OF THE ASSES SEE. THE PARTIES, ACCORDINGLY, WERE REQUIRED TO ADDRESS THEI R ARGUMENTS AS TO WHICH FORUM THE ISSUE FOR VERIFICAT ION ON FACTS BE REMANDED TO. THE LD. CIT-DR MADE A PRAYER THAT IT MAY BE REMANDED TO THE AO. THE LD. AR AGREED REQUE STING THAT THE CONCERNED AUTHORITY MAY BE DIRECTED TO GIV E THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD AN D IN THE EVENTUALITY HE IS NOT CONVINCED BY THE ASSESSEE'S EXPLANATION, THE ASSESSEE BE COMMUNICATED THE SPECI FIC OBJECTIONS AND BE AFFORDED A REASONABLE OPPORTUNITY TO MEET THE OBJECTIONS. 11. ACCORDINGLY, ON A CONSIDERATION OF THE PECULI AR FACTS AND CIRCUMSTANCES OF THE PRESENT APPEALS, WE DEEM I T APPROPRIATE ACCEDING TO THE REQUESTS OF THE PARTIES AS NOTED ABOVE TO REMAND THE ISSUE FOR VERIFICATION ON FACTS BACK TO THE FILE OF THE AO. THE AO SHALL PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REA SONABLE AND EFFECTIVE OPPORTUNITY OF BEING HEARD, SPECIFICA LLY ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 17 OF 31 CONFRONTING THE OBJECTIONS IF ANY TO THE ASSESSEE S O AS TO ENABLE THE ASSESSEE TO MEET THE OBJECTIONS ETC. 12. THE LEGAL ISSUE AS WE HAVE EARLIER ADDRESSED IN THE ABSENCE OF ANY DECISION BY THE JURISDICTIONAL HIGH COURT AND CONSIDERING THE DECISIONS RENDERED BY THE HON'BLE K ARNATAKA HIGH COURT AND RAJASTHAN HIGH COURT IN THE CASE OF THE ASSESSEE ITSELF STANDS CONCLUDED IN FAVOUR OF THE A SSESSEE. THE SAID LEGAL VIEW AS ARGUED BY THE LD. AR HAS BEE N FOLLOWED BY THE CO-ORDINATE BENCH OF THE CHANDIGARH BENCH WH EREIN ONE OF US ( LD. AM) HAS DECIDED THE ISSUE IN THE CA SE OF BHARTI AIRTEL LTD. VS ITO AS UNDER : 13. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND HAVE ALSO GONE THROUGH THE DECISIONS REFERRED TO BEFORE US. THE ISSUE FOR CONSIDERATION BEFORE US IS VIS-A-VIS THE NATURE OF TRANSACTION BETWEEN THE ASSESSEE TELECOMMUNICATION SERVICES PROVIDER AND ITS DISTRIBUTORS IN SO FAR AS IT RELATES TO SALE OF PRE PAID SIM CARDS AND WHETHER THE DISCOUNT OF PRICE GIVEN TO THE DISTRIBUTORS ON SUCH SALE OF PREPAID SIM CARDS IS IN THE NATURE OF COMMISSION ATTRACTING THE PROVISIONS OF SECTION 194H OF THE ACT. AS POINTED OUT TO US. THE HON'BLE KARNA TAKA HIGH COURT IN THE CASE OF THE ASSESSEE ITSELF, WHILE DEALING WITH AN IDENT ICAL ISSUE IN APPEAL AGAINST THE DEMAND RAISED U/S 201(1) AND 201(1A) OF THE ACT , DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE HON'BLE HIGH COURT HELD THAT THERE WAS NO RELATIONSHIP OF PRINCIPAL AND AGENT BETWEEN THE ASS ESSEE AND ITS DISTRIBUTORS AND THE TRANSACTION WAS THAT OF SALE OF RIGHT TO SE RVICE ON A PRINCIPAL TO PRINCIPAL BASIS.; THE HON'BLE HIGH COURT HELD THAT WHEN THE ASSESSEE SOLD SIM CARD TO DISTRIBUTORS HE WAS NEITHER PAYING ANY COMMISSION BY SUCH SALE, NOR ANY INCOME ACCRUED IN THE HANDS OF THE DISTRIBU TORS WHICH CONDITION WAS PRECEDENT FOR ATTRACTING SECTION 194H OF THE ACT. THE HON'BLE HIGH COURT, THEREFORE, DEDUCTION OF INCOME TAX AT SOURCE BEING A VICARIOUS RESPONSIBILITY THERE WAS NO OBLIGATION TO DEDUCT TDS IN THE ABSENC E OF A PRIMARY RESPONSIBILITY TO PAY TAX. THE RELEVANT FINDINGS OF THE HON'BLE HIGH COURT IN THIS REGARD ARE AS UNDER: 'FROM THE AFORESAID CLAUSES, IT IS CLEAR THAT THERE IS NO RELATIONSHIP OF PRINCIPAL AND AGENCY. ON THE CONTRA RY, IT IS ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 18 OF 31 EXPRESSLY STATED THAT THE RELATIONSHIP IS THAT OF P RINCIPAL TO PRINCIPAL. SECONDLY THE DISTRIBUTOR/ CHANNEL PARTNE R HAS TO PAY CONSIDERATION FOR THE PRODUCT SUPPLIED AND IT IS TR EATED AS SALE CONSIDERATION. THERE IS A CLAUSE, WHICH SPECIFICALL Y STATES THAT AFTER SUCH SALE OF PRODUCTS, THE DISTRIBUTOR/ CHANN EL PARTNER CANNOT RETURN THE GOODS TO THE ASSESSEE FOR WHATEVE R REASON. IT IS THE CHANNEL PARTNER AND THE DISTRIBUTOR WHO HAVE TO INSURE THE PRODUCTS AND THE GODOWNS AT THEIR COST. THEY AR E EVEN PREVENTED FROM MAKING ANY REPRESENTATION TO THE RET AILERS UNLESS AUTHORIZED BY THE ASSESSEE. WHAT IS GIVEN BY THE ASSESSEE TO ITS DISTRIBUTOR/ CHANNEL PARTNER IS A TRADE DISC OUNT. IT IS NOT COMMISSION. 52. IN QATAR AIRWAYS CASE IT WAS HELD THAT, WHEN THE AI RLINES SELL THE AIR TICKETS IT WOULD HAVE NO INFORMATION A BOUT THE EXACT RATE AT WHICH THE TICKETS WOULD ULTIMATELY BE SOLD BY THEIR AGENTS SINCE THE AGENTS HAD BEEN GIVEN DISCRETION TO SELL THE TICKETS AT ANY RATE BETWEEN THE FIXED MINIMUM COMMERCIAL PRICE AND THE PUBLISHED PRICE. THE QUESTION OF DEDUCTING ANY TAX AT SOURCE WOULD NOT ARISE. 53. IN THE AHMEDABAD STAMP VENDORS' ASSOCIATION CASE AL SO, IT WAS HELD THAT, WHEN THE LICENSED STAMP VENDORS TOOK DELIVERY OF STAMP PAPERS ON PAYMENT OF FULL PRICE LESS DISCOUNT AND THEY SELL SUCH STAMP PAPERS TO RETAIL CUSTOMERS, NEITHER OF T HE TWO ACTIVITIES CAN BE TERMED AS THE SERVICE IN THE COUR SE OF BUYING OR SELLING OF GOODS. DISCOUNT GIVEN TO THE STAMP VENDO RS IS FOR PURCHASING THE STAMPS IN BULK QUANTITY AND THE SAID AMOUNT IS IN THE NATURE OF CASH DISCOUNT AND, THEREFORE, SUCH A TRANSACTION IS A SALE. THEREFORE, THE DISCOUNT MADE AVAILABLE TO T HE LICENSED STAMP VENDORS DOES NOT FALL WITHIN THE EXPRESSION ' COMMISSION' OR 'BROKERAGE' UNDER SECTION 194H OF THE ACT. 54. IN THE MOTHER DAIRY'S CASE REFERRED TO SUPRA, IT WAS HELD THAT, THE CONCESSIONAIRE PURCHASES THE MILK FROM TH E DAIRY WHICH RAISES A BILL ON THE CONCESSIONAIRE AND THE AMOUNT HE HAS PAID FOR. THE DAIRY MERELY FIXED THE MRP AT WHICH THE CO NCESSIONAIRE CAN SELL THE MILK. UNDER THE AGREEMENT THE CONCESSI ONAIRE CANNOT RETURN THE MILK UNDER ANY THE ACCOUNT OF THE CONCESSIONAIRE AND THE DAIRY IS NOT RESPONSIBLE FOR THE SAME. THE CONCESSIONAIRE BECOMES THE OWNER OF THE MILK AND TH E PRODUCTS ON TAKING DELIVERY OF THE SAME FROM THE DAIRY. HE T HUS PURCHASED THE MILK AND THE PRODUCTS FROM THE DAIRY AND SOLD THEM AT THE MRP. THE DIFFERENCE BETWEEN THE MRP AND THE PRICE WHICH HE PAYS TO THE DAIRY IS HIS INCOME FROM BUSIN ESS. IT CANNOT BE CATEGORIZED AS COMMISSION. THE LOSS AND GAIN IS OF THE CONCESSIONAIRE. THE DAIRY MAY HAVE FIXED THE MRP AN D THE PRICE AT WHICH THEY SELL THE PRODUCTS TO THE CONCES SIONAIRE BUT THE PRODUCTS ARE SOLD AND OWNERSHIP VESTS AND IS TR ANSFERRED TO THE CONCESSIONAIRES. THE SALE IS SUBJECT TO CONDITI ONS, AND STIPULATIONS. THIS BY ITSELF DOES NOT SHOW AND ESTA BLISH PRINCIPAL AND AGENT RELATIONSHIP. THE SUPERVISION AND CONTROL REQUIRED IN CASE OF AGENCY IS MISSING. THEREFORE, IT WAS HELD T HAT THERE IS NO ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 19 OF 31 RELATIONSHIP OF PRINCIPAL AND AGENT AND THE CONSIDE RATION PAID TO THE CONCESSIONAIRE IS NOT COMMISSION. 55. IN THE SINGAPORE AIRLINES CASE, THE RELATIONSHIP OF PRINCIPAL AND AGENT WAS NOT IN DISPUTE. AT NO POINT IN TIME T HE TRAVEL AGENT OBTAINS PROPRIETARY RIGHTS TO THE TRAFFIC DOCUMENTS /AIR TICKETS. THERE IS NO VALUE OR PRICE PAID BY HIM ON WHICH THE TRAVEL AGENT GETS A DEDUCTION. THE PRICE OR VALUE IS RECEIVED BY THE ASSESSEE- AIRLINE THROUGH THE MEDIUM OF THE TRAVEL AGENT FROM THE PASSENGER WHICH IS ALSO ONE OF THE FACETS OF THE SE RVICES OFFERED BY THE TRAVEL AGENT. THE PRICE OR VALUE OF THE TRAF FIC DOCUMENT RECEIVED BY THE TRAVEL AGENT FOR AND ON BEHALF OF T HE ASSESSEE- AIRLINE IS HELD IN TRUST. THUS THE MONEY RETAINED B Y THE TRAVEL AGENT IS COMMISSION. THE AIRLINE PAID STANDARD COMM ISSION TO THE TRAVEL AGENT ON WHICH ASSESSEE-AIRLINE DEDUCT T AX AT SOURCE. THE DISPUTE WAS ONLY IN RESPECT OF THE MONEY OR MON IES WHICH THE TRAVEL AGENT RETAINS OVER AND ABOVE THE NET FAR E. IN THAT CONTEXT, THE DELHI HIGH COURT HELD THAT, UNDER AN A GREEMENT ONLY ONE RELATIONSHIP EXISTS AND THE TRANSACTION IS A SINGULAR TRANSACTION WHICH IS EXECUTED BETWEEN THE TRAVEL AG ENT WHILE ACTING ON BEHALF OF THE PRINCIPAL AIRLINE IN SELLIN G THE TRAFFIC DOCUMENTS/AIR TICKETS TO A THIRD PARTY WHO IS A PAS SENGER AND, THEREFORE, THE SECOND LEG OF THE TRANSACTION CANNOT BE DIFFERENT FROM THE FIRST LEG OF THE TRANSACTION. 56. IN THE IDEA CELLULAR LIMITED'S CASE, THE DELHI HI GH COURT PROCEEDED ON THE FOOTING THAT THE ASSESSEE IS PROVI DING THE MOBILE PHONE SERVICE. IT IS THE ULTIMATE OWNER OF T HE SERVICE SYSTEM. THE SERVICE IS MEANT FOR PUBLIC AT LARGE. T HEY HAD APPOINTED DISTRIBUTORS TO MAKE AVAILABLE THE PRE-PA ID PRODUCTS TO THE PUBLIC AND LOOK AFTER THE DOCUMENTATION AND OTHER STATUTORY REQUIREMENTS REGARDING THE MOBILE PHONE C ONNECTION AND, THEREFORE, THE ESSENCE OF SERVICE RENDERED BY THE DISTRIBUTOR IS NOT THE SALE OF ANY PRODUCT OR GOODS AND, THEREF ORE, IT WAS HELD THAT ALL THE DISTRIBUTORS ARE ALWAYS ACTING FO R AND ON BEHALF OF THE ASSESSEE COMPANY AND THE DISTRIBUTOR COMMITS THE ASSESSEE TO THE SUBSCRIBERS TO WHOM ASSESSEE IS ACC OUNTABLE UNDER THE SERVICE CONTRACT WHICH IS THE SUBSCRIBER CONNECTION ARRANGED BY THE DISTRIBUTOR FOR THE ASSESSEE. IN TH AT CONTEXT IT WAS HELD THAT, DISCOUNT IS NOTHING BUT A MARGIN GIV EN BY THE ASSESSEE TO THE DISTRIBUTOR AT THE TIME OF DELIVERY OF SIM CARDS OR RECHARGE COUPONS AGAINST ADVANCE PAYMENT MADE BY THE DISTRIBUTOR. 58. IN BOTH THE AFORESAID CASES, THE COURT PROCEEDED ON THE BASIS THAT SERVICE CANNOT BE SOLD. IT HAS TO BE REN DERED. BUT, THEY DID NOT GO INTO THE QUESTION WHETHER RIGHT TO SERVI CE CAN BE SOLD. 59. THE TELEPHONE SERVICE IS NOTHING BUT SERVICE. SIM C ARDS, HAVE NO INTRINSIC SALE VALUE. IT IS SUPPLIED TO THE CUSTOMERS FOR PROVIDING MOBILE SERVICES TO THEM. THE SIM CARD IS IN THE NATURE OF A KEY TO THE CONSUMER TO HAVE ACCESS TO THE TELE PHONE NETWORK ESTABLISHED AND OPERATED BY THE ASSESSEE-COMPANY ON ITS OWN BEHALF. SINCE THE SIM CARD IS ONLY A DEVICE TO HAVE ACCESS TO THE MOBILE PHONE NETWORK, THERE IS NO QUESTION OF PASSI NG OF ANY OWNERSHIP OR TITLE OF THE GOODS FROM THE ASSESSEE-C OMPANY TO THE ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 20 OF 31 DISTRIBUTOR OR FROM THE DISTRIBUTOR TO THE ULTIMATE CONSUMER. THEREFORE, THE SIM CARD, ON ITS OWN BUT WITHOUT SER VICE WOULD HARDLY HAVE ANY VALUE. A CUSTOMER, WHO WANTS TO HAV E ITS SERVICE INITIALLY, HAS TO PURCHASE A SIM-CARD. WHEN HE PAYS FOR THE SIM- CARD, HE GETS THE MOBILE SERVICE ACTIVATED. SERVICE CAN ONLY BE RENDERED AND CANNOT BE SOLD. HOWEVER, RIGHT TO SERV ICE CAN BE SOLD. WHAT IS SOLD BY THE SERVICE PROVIDER TO THE D ISTRIBUTOR IS THE RIGHT TO SERVICE. ONCE THE DISTRIBUTOR PAYS FOR THE SERVICE, AND THE SERVICE PROVIDER, DELIVERS THE SIM CARD OR RECH ARGE COUPONS, THE DISTRIBUTOR ACQUIRES A RIGHT TO DEMAND SERVICE. ONCE SUCH A RIGHT IS ACQUIRED THE DISTRIBUTOR MAY U SE IT BY HIMSELF. HE MAY ALSO SELL THE RIGHT TO SUB-DISTRIBU TORS WHO IN TURN MAY SELL IT TO RETAILERS. IT IS A WELL-SETTLED PROPOSITION THAT IF THE PROPERTY IN THE GOODS IS TRANSFERRED AND GETS V ESTED IN THE DISTRIBUTOR AT 4HE TIME OF THE DELIVERY THEN HE IS THEREAFTER LIABLE FOR THE SAME AND WOULD BE DEALING WITH THEM IN HIS OWN RIGHT AS A PRINCIPAL AND NOT AS AN AGENT. THE SELLER MAY HAV E FIXED THE MRP AND THE PRICE AT WHICH THEY SELL THE PRODUCTS T O THE DISTRIBUTORS BUT THE PRODUCTS ARE SOLD AND OWNERSHI P VESTS AND IS TRANSFERRED TO THE DISTRIBUTORS. HOWEVER, WHO EVER ULTIMATELY SELLS THE SAID RIGHT TO CUSTOMERS IS NOT ENTITLED T O CHARGE MORE THAN THE MRP. THE INCOME OF THESE MIDDLEMEN WOULD B E THE DIFFERENCE IN THE SALE PRICE AND THE MRP, WHICH THE Y HAVE TO SHARE AS PER THE AGREEMENT BETWEEN THEM. THE SAID I NCOME ACCRUES TO THEM ONLY WHEN THEY SELL THIS RIGHT TO S ERVICE AND NOT WHEN THEY PURCHASE THIS RIGHT TO SERVICE. THE ASSES SEE IS NOT CONCERNED WITH QUANTUM AND TIME OF ACCRUAL OF INCOM E TO THE DISTRIBUTORS BY RESELLING THE PREPAID CARDS TO THE SUB- DISTRIBUTORS/ RETAILERS. AS AT THE TIME OF SALE OF PREPAID CARD BY THE ASSESSEE TO THE DISTRIBUTOR, INCOME HAS NOT ACC RUED OR ARISEN TO THE DISTRIBUTOR, THERE IS NO PRIMARY DIFFERENCE BETWEEN THE SALE PRICE TO RETAILER AND THE PRICE WHICH THE DIST RIBUTOR PAYS TO THE ASSESSEE IS HIS INCOME FROM BUSINESS. IT CANNOT BE CATEGORIZED AS COMMISSION. THE SALE IS SUBJECT TO C ONDITIONS, AND STIPULATIONS. THIS BY ITSELF DOES NOT SHOW AND ESTA BLISH PRINCIPAL AND AGENT RELATIONSHIP. 60. THE FOLLOWING ILLUSTRATION MAKES THE POINT CLEAR: ON DELIVERY OF THE PREPAID CARD, THE ASSESSEE RAISE S INVOICES AND UPDATES THE ACCOUNTS. IN THE FIRST INSTANCE, SALE I S ACCOUNTED FOR RS. 100/ -, WHICH IS THE FIRST ACCOUNT AND RS.80/-I S THE SECOND ACCOUNT AND THE THIRD ACCOUNT IS RS.20/-. IT SHOWS THAT THE SALES IS FOR RS.100/-, COMMISSION IS GIVEN AT RS.20/- TO THE DISTRIBUTORS AND NET VALUE IS RS.80/-. THE ASSESSEE'S SALE IS AC COUNTED AT THE GROSS VALUE OF RS.100/-AND THEREAFTER, THE COMMISSI ON PAID AT RS.20/-IS ACCOUNTED. THEREFORE, IN THOSE CIRCUMSTAN CES OF THE CASE, THE ESSENCE OF THE CONTRACT OF THE ASSESSEE A ND DISTRIBUTOR IS THAT OF SERVICE AND THEREFORE, SECTION 194H OF THE ACT IS ATTRACTED. 61. HOWEVER, IN THE FIRST INSTANCE, IF THE ASSESSEE AC COUNTED FOR ONLY RS.80/- AND ON PAYMENT OF RS.80/-, HE HAND S OVER THE PREPAID CARD PRESCRIBING THE MRP AS RS. 100/-, THEN AT THE TIME OF SALE, THE ASSESSEE IS NOT MAKING ANY PAYMEN T. CONSEQUENTLY, THE DISTRIBUTOR IS NOT EARNING ANY IN COME. THIS ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 21 OF 31 DISCOUNT OF RS.20/- IF NOT REFLECTED ANYWHERE IN TH E BOOKS OF ACCOUNTS, IN SUCH CIRCUMSTANCES, SECTION 194H OF TH E ACT IS NOT ATTRACTED. 62. IN THE APPEALS BEFORE US, THE ASSESSEES SELL PREPAI D CARDS/ VOUCHERS TO THE DISTRIBUTORS. AT THE TIME OF THE ASSESSEE SELLING THESE PRE-PAID CARDS FOR A CONSIDERATION TO THE DISTRIBUTOR, THE DISTRIBUTOR DOES NOT EARN ANY INCO ME. IN FACT, RATHER THAN EARNING INCOME, DISTRIBUTORS INCUR EXPE NDITURE FOR THE PURCHASE OF PREPAID CARDS. ONLY AFTER THE RESAL E OF THOSE PREPAID CARDS, DISTRIBUTORS WOULD DERIVE INCOME. AT THE TIME OF THE ASSESSEE SELLING THESE PRE-PAID CARDS, HE IS N OT IN POSSESSION OF ANY INCOME BELONGING TO THE DISTRIBUTOR. THEREFO RE, THE QUESTION OF ANY INCOME ACCRUING OR ARISING TO THE DISTRIBUTO R AT THE POINT OF TIME OF SALE OF PREPAID CARD BY THE ASSESSEE TO THE DISTRIBUTOR DOES NOT ARISE. THE CONDITION PRECEDENT FOR ATTRACTING S ECTION 194H OF THE ACT IS THAT THERE SHOULD BE AN INCOME PAYABLE B Y THE ASSESSEE TO THE DISTRIBUTOR. IN OTHER WORDS THE INCOME ACCRU ED OR BELONGING TO THE DISTRIBUTOR SHOULD BE IN THE HANDS OF THE AS SESSEES. THEN OUT OF THAT INCOME, THE ASSESSEE HAS TO DEDUCT INCOME T AX THEREON AT THE RATE OF 10% AND THEN PAY THE REMAINING PORTION OF THE INCOME TO THE DISTRIBUTOR. IN THIS CONTEXT IT IS PERTINENT TO MENTION THAT THE ASSESSEE SELLS SIM CARDS TO THE DISTRIBUTOR AND ALL OWS A DISCOUNT OF RS.20/-, THAT RS.20/- DOES NOT REPRESENT THE INC OME AT THE HANDS OF THE DISTRIBUTOR BECAUSE THE DISTRIBUTOR IN TURN MAY SELL THE SIM CARDS TO A SUBDISTRIBUTOR WHO IN TURN MAY SELL THE SIM CARDS TO THE RETAILER OF THEM HAVE TO SHARE RS.20/~ WHICH IS ALL OWED AS DISCOUNT BY THE ASSESSEE TO THE DISTRIBUTOR. THERE IS NO RELATIONSHIP BETWEEN THE ASSESSEE AND THE SUB-DISTRIBUTOR AS WEL L AS THE RETAILER. HOWEVER, UNDER THE TERMS OF THE AGREEMENT , SEVERAL OBLIGATIONS FLOW IN SO FAR AS THE SERVICES TO BE RE NDERED BY THE ASSESSEE TO THE CUSTOMER IS CONCERNED AND, THEREFOR E, IT CANNOT BE SAID THAT THERE EXISTS A RELATIONSHIP OF PRINCIPAL AND AGENT. IN THE FACTS OF THE CASE, WE ARE SATISFIED THAT, IT IS A S ALE OF RIGHT TO SERVICE. THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE DISTRIBUTOR IS THAT OF PRINCIPAL TO PRINCIPAL AND, THEREFORE, W HEN THE ASSESSEE SELLS THE SIM CARDS TO THE DISTRIBUTOR, HE IS NOT P AYING ANY COMMISSION; BY SUCH SALE NO INCOME ACCRUES IN THE H ANDS OF THE DISTRIBUTOR AND HE IS NOT UNDER ANY OBLIGATION TO P AY ANY TAX AS NO INCOME IS GENERATED IN HIS HANDS. THE DEDUCTION OF INCOME TAX AT SOURCE BEING A VICARIOUS RESPONSIBILITY, WHEN THERE IS NO PRIMARY RESPONSIBILITY, THE ASSESSEE HAS NO OBLIGATION TO D EDUCT TDS. ONCE IT IS HELD THAT THE RIGHT TO SERVICE CAN BE SOLD TH EN THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE DISTRIBUTOR WOULD BE T HAT OF PRINCIPAL AND PRINCIPAL AND NOT PRINCIPAL AND AGENT. THE TERM S OF THE AGREEMENT SET OUT SUPRA IN UNMISTAKABLE TERMS DEMON STRATE THAT THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE DISTR IBUTOR IS NOT THAT OF PRINCIPAL AND AGENT BUT IT IS THAT OF PRINC IPAL TO PRINCIPAL. 63. IT WAS CONTENDED BY THE REVENUE THAT, IN THE EVENT OF THE ASSESSEE DEDUCTING THE AMOUNT AND PAYING INTO THE DEPARTMENT, ULTIMATELY IF THE DEALER IS NOT LIABLE TO TAX IT IS ALWAYS OPEN TO HIM TO SEEK FOR REFUND OF THE TAX AN D, THEREFORE, IT CANNOT BE SAID THAT SECTION 194H IS N OT ATTRACTED TO THE CASE ON HAND. AS STATED EARLIER, ON A PROPER ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 22 OF 31 CONSTRUCTION OF SECTION 1 94H AND KEEPING IN MIND T HE OBJECT WITH WHICH CHAPTER XVII IS INTRODUCED, THE PERSON P AYING SHOULD BE IN POSSESSION OF AN INCOME WHICH IS CHARG EABLE TO TAX UNDER THE ACT AND WHICH BELONGS TO THE PAYEE. A STATUTORY OBLIGATION IS CAST ON THE PAYER TO DEDUCT THE TAX A T SOURCE AND JEMIT THE SAME TO THE DEPARTMENT. IF THE PAYEE IS N OT IN POSSESSION OF THE NET INCOME WHICH IS CHARGEABLE TO TAX, THE QUESTION OF PAYER DEDUCTING ANY TAX DOES NOT ARISE. AS HELD BY THE APEX COURT IN BHAVANI COTTON MILLS LIMITED'S CA SE, IF A PERSON IS NOT LIABLE FOR PAYMENT OF TAX AT ALL, AT ANY TIME, THE COLLECTION OF TAX FROM HIM, WITH A POSSIBLE CONTING ENCY OF REFUND AT A LATER STAGE WILL NOT MAKE THE ORIGINAL LEVY VALID. 64. IN THE CASE OF VODAFONE, IT IS NECESSARY TO L OOK INTO THE ACCOUNTS BEFORE GRANTING ANY RELIEF TO THEM AS SET OUT ABOVE. THEY HAVE ACCOUNTED THE ENTIRE PRICE OF THE PREPAID CARD AT RS.100/- IN THEIR BOOKS OF ACCOUNTS AND SHOWING THE DISCOUNT OF RS.20/'- TO THE DEALER. ONLY IF THEY ARE SHOWING RS.80/- AS THE SALE PRICE AND NOT REFLECTING IN THEIR ACCOUNTS A CREDIT OF RS.20/- TO THE DISTRIBUTOR, THEN THERE IS NO LIABIL ITY TO DEDUCT TAX UNDER SECTION 194H OF THE ACT. THIS EXERCISE HA S TO BE DONE BY THE ASSESSING AUTHORITY BEFORE GRANTING ANY RELIEF. 65. IN THE LIGHT OF THE AFORESAID DISCUSSIONS, WE A RE OF THE VIEW THAT THE ORDER PASSED BY THE AUTHORITIES HOLDING THAT SE CTION 194H OF THE ACT IS ATTRACTED TO THE FACTS OF THE CASE IS UN SUSTAINABLE. THEREFORE, THE SUBSTANTIAL QUESTION OF LAW IS ANSWE RED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 14. FURTHER WE FIND THAT EVEN THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF M / S BHARTI HEXACOM LIMITED (SUPRA), STAT ED TO BE A SUBSIDIARY OF THE ASSESSEE, HELD THAT THE DISCOUNT PAID TO DISTRIBUTO RS WAS NOT IN THE NATURE OF COMMISSION AS ENVISAGED U/S 194H OF THE ACT AND THU S THERE WAS NO LIABILITY TO DEDUCT TAX AT SOURCE ON THE SAME. THE I.T.A.T. J AIPUR BENCH FOLLOWING THE DECISION OF THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF M / S BHARTI HEXACOM LIMITED (SUPRA) DELETED THE DEMAND RAISED O N IDENTICAL ISSUE IN THE CASE OF M / S BHARTI HEXACOM LIMITED (SUPRA) IN A S UBSEQUENT ASSESSMENT YEAR. FURTHER WE NOTE THAT THE I.T.A.T. GAUHATI BEN CH HAS ALSO AFFIRMED THE AFORESAID PROPOSITION OF LAW IN THE MATTER OF THE A SSESSEE ITSELF I.E. BHARTI AIRTEL LIMITED IN ITS ORDER DATED 22.2.2018 IN ITA NOS.59 TO 62 / GUAHATI/ 20 1 2 RELATING TO ASSESSMENT YEARS 2006-07 TO 2009- 1 0. THEREFORE, WE FIND THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSE E BY VARIOUS HIGH COURTS AND VARIOUS BENCHES OF THE I.T.A.T. IN THE CASE OF THE ASSESSEE'S GROUP CONCERNS ONLY WHEREIN THE BUSINESS MODEL IS MORE OR LESS OF IDENTICAL NATURE. THE SAID DECISIONS ARE THEREFORE APPLICABLE TO THE FACTS OF THE PRESENT CASE. MOREOVER, FOR DECIDING THE ISSUE BEFORE US , WHEN N O DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IS SE TTLED LEGAL PRINCIPLE IS THAT THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO BE ADOPTED, AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PROD UCTS LTD., 88 ITR 192 (SC) AND CIT VS. VATIKA TOWNSHIP PVT. LTD., 367 ITR 466 (SC). 15. IN VIEW OF THE AFORESAID, UPON CONSIDERING THE TOTA LITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND APPLYING THE PRINCIPL ES LAID DOWN IN THE ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 23 OF 31 JUDICIAL PRECEDENT CITED BEFORE US WE HOLD THAT THE SALE OF PREPAID SIM CARDS BY THE ASSESSEE TO THE DISTRIBUTORS ARE ON PRINCIPA L TO PRINCIPAL BASIS AND HENCE OUT SIDE THE AMBIT OF SECTION 194H OF THE ACT . THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX ON THE SAME AND, THE REFORE, COULD NOT BE HELD TO BE AN ASSESSEE IN DEFAULT FOR NOT DEDUCTING TAX AT SOURCE. THE DEMAND RAISED ON THE ASSESSEE U/S 201(1) AND 201(1A) OF TH E ACT IS, THEREFORE, DIRECTED TO BE DELETED. 13. ACCORDINGLY, ITA 427/CHD/2019 IN TERMS OF THE PRONOUNCEMENT MADE IN THE COURT AT THE TIME OF HEAR ING ITSELF IS DECIDED IN FAVOUR OF THE ASSESSEE AND IS ALLOWED FOR STATISTICAL PURPOSES. 14. SINCE IN THE REMAINING APPEALS OF THE ASSESSEE I.E. ITA 317 TO 320/CHD/2019 AND ITA 425 TO 426/CHD/2019, NO SEPARATE ARGUMENTS ON FACTS OR LAW WERE MADE BY THE PARTIES WHICH POSITION HAD BEEN NOTED AT THE OUTSET ITSELF, ACCORDINGLY, WITH SIMILAR DIRECTIONS ON ACCOUNT OF SIMILAR REASONS IN TERMS OF THE PRONOUNCEMENT MADE AT THE T IME OF HEARING ITSELF, THESE APPEALS ARE ALSO RESTORED BAC K TO THE AO. 15. IN THE RESULT, APPEALS OF THE ASSESSEE IN ITA N OS. 317 TO 320/CHD/2019 AND ITA 425 TO 427/CHD/2019 ARE ALLOWE D FOR STATISTICAL PURPOSES. 16. ADDRESSING THE IDENTICAL ISSUE RAISED IN THE DEPARTMENTAL APPEAL, THE LD. AR INVITING ATTENTION TO THE ISSUE RAISED IN ITA 447/CHD/2019 PERTAINING TO 2009 -10 ASSESSMENT YEAR SUBMITTED THAT SINCE THE LATEST DEC ISION OF ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 24 OF 31 THE CIT(A) IS AVAILABLE IN 2012-13 ASSESSMENT YEAR, ACCORDINGLY THE FACTS AS CONSIDERED IN ITA 608/CHD/ 2019 FOR ASSESSMENT YEAR 2012-13 ASSESSMENT YEAR WOULD BE RE FERRED TO BY THE PARTIES. FOR READY REFERENCE, WE REPRODU CE THE GROUNDS RAISED IN ITA 608/CHD/2019 : (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. C1T(A) IS RIGHT IN LAW IN HOLDING THAT THE ASSESSEE COULD NOT HAVE BEEN DEEMED AS ONE IN DEFAULT FOR NON-DEDUCTION OF TAX A T SOURCE ON ROAMING CHARGES PAID BY IT TO OTHER SERVICE PROVIDERS WHEN THE ASSESSING AUTHORITY HAS RIGHTLY HELD AS ASSESSEE IN DEFAULT DUE TO NON DEDUCTION OF TDS AS REQUIRED UNDER SECTION 194 J OF THE INCOME TAX ACT, 1961. (2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) IS RIGHT IN LAW IN HOLDING THAT THE ROAMING CHARGES DOES NOT REQUIRE ANY HUMAN INTERVENTION AND THAT THE CHARGES RECEIVE D OR PAID ON ACCOUNT OF THIS IS NOT TECHNICAL FEES AND DOES NOT FALL UNDER PURVIEW OF SECTION 194J OF THE ACT EVEN WHEN THE ASSESSING AUTHORITY RIGHTLY T REATED THE PAYMENT MADE BY VODAFONE SOUTH LTD., TO VARIOUS OPERATORS AS TEC HNICAL SERVICES FALLING WITHIN THE AMBIT OF THE PROVISIONS OF SECTION 194J OF THE ACT?' (3) THE APPELLANT CRAVES LEAVE TO AMEND, ADD, ALTER OR DELETE ANY OF THE AFORESAID GROUNDS TILL THE DISPOSAL. 16.1 THE LD. CIT-DR IN SUPPORT OF THE DEPARTMENTAL GROUNDS PLACED RELIANCE UPON THE ORDER DATED 19.03.2014 PAS SED BY THE AO U/S 201(1) R.W.S. 201(1A) IN THE RESPECTIVE YEARS. RELIANCE WAS PLACED UPON THE ORDERS. ACCORDINGLY, FOR THE SAKE OF COMPLETENESS, THE RELEVANT EXTRACT FROM THE ORDER IS REPRODUCED HEREUNDER : THE PHOTOCOPY OF THE CROSS-EXAMINED STATEMENT DATED 30.12014 WAS, SUPPLIED TO THE ASSESSEE DEDUCTOR VIDE THIS OFFICE LETTER NO. ACIT(TDS)/2013-14/3399 DATED 5.12.2014 ASKING THE ASSESSEE DEDUCTOR FILE THEIR REPLY IN THIS REGARD . THE REPLY HAS BEEN CONSIDERED WHICH IS NOT ACCEPTAB LE IN VIEW OF THE FOLLOWING FINDING: ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 25 OF 31 THE STATEMENTS OF SHRI TANAY KRISHNA AND SHRI ASHOK MITTAL RECORDED OH 29.09.2010 AND SUBSEQUENT CROSS EXAMINATION BY 04.1 0.2010 HAS CLEARLY ESTABLISHED THAT HUMAN INTERVENTION IS INVOLVED IN THE INTER-CONNECTION OF NETWORK AND THE PROVISIONS OF SECTION 1 94J OF THE I.T. ACT , 1961 ARE ATTRACTED ON THE PAYMENT OF TECHNICAL FEE ON ACCOUNT OF INTERCONNECT CHARGES/ACCESS/PORT CHARGES. THIS FACT HAS AGAIN BEEN CONFIRMED BY THE SAME TECH NICAL EXPERTS S/SHRI TANAY KRISHNA AND SHRI ASHOK MITTAL, AS PER THEIR STATEME NTS RECORDED AGAIN ON 08.01.2014 AND SUBSEQUENT CROSS EXAMINATION BY THE AUTHORISED REPRESENTATIVE OF THE COMPANY 30.01.2014 ON& MAINTENANCE ETC TO ENSUR E FAULT FEE IT IS CLEARLY ESTABLISHED THAT THE PROCESS OF NATIONAL ROAMING FOR THE PURPOSE OF CARRIAGE OF CALLS INVOLVES MANY PROCESSES LIKES OPERATIONS & MA INTENANCE SUPERVISION AND MONITORING, FAULT DETECTION AND RECTIFICATION, MONI TORING AND ENSURING QUALITY OF SIGNALS, PROVISIONS OF ADDITIONAL CAPACITY WHEN THE INSTALLED CAPACITY GETS EXHAUSTED, CAPACITY AUGMENTATION ETC. THE ENTIRE PR OCESS IS DEPENDED UPON THE SERVICES OF HIGHLY TECHNICAL MANPOWER AND INSTALLAT IONS OF NETWORK HAVING VARIOUS PERIPHERAL, HARDWARE & SOFTWARE WHICH ARE TECHNICAL IN NATURE. THIS HARDWARE, SOFTWARE ALONG WITH PERIPHERALS NEED CONTINUES MONI TORING, SUPERVISION, OPERATION & MAINTENANCE ETC TO ENSURE FAULT FREE CA RRIAGE OF CALLS FOR PURPOSE OF INTERCONNECTION. THEY ESSENTIALLY INVOLVED THE HUMA N INTERVENTION. THE PAYMENTS MADE FOR NATIONAL ROAMING ARE FEE FOR THE TECHNICAL SERVICES TO BE COVERED UNDER SECTION 194J OF THE INCOME TAX ACT, 1961. THE TAX L IABILITY OF THE ASSESSEE DEDUCTOR UNDER SECTION 194J OF THE INCOME TAX ACT, 1961 IS BEING CALCULATED AS UNDER:- MONTH AMOUNT TAX TAX TAX NO OF INTEREST U/S TOTAL T AX PAID DEDUCTIBLE DEDUCTED LIABILITY MONTHS OF 201(1 A) LIABILITY U/S 194J DEFAULT APRIL, 11 2,28,46,128 22,84,612 NIL 22,84,612 36 82 2460 3107072 MAY, I 1 2,15,70,297 21,57,029 NIL 21,57,029 35 754 960 2911989 JUNE. 11 2,47,58,144 24,75,8 I4 NIL 24,75,814 34 84 1777 3317591 JULY, 1 1 2,64,51,812 26,45,181 NIL 26,15,181 33 87 2910 3518091 AUG., 11 2,26,67,761 22,66,776 NIL 22,66,776 32 725 368 2992144 SEPT., 1 1 2,13,98,507 21,39,850 NIL 21,39,850 31 6 63353 2803203 OCT., 1 1 1,95,73,066 19,57,306 NIL 19,57,306 30 58 7191 2544492 NOV., 11 2,30,83,690 23,08,369 NIL 23,08,369 29 669 427 2977796 DEC. 1 1 2,44,98,364 24,49,836 NIL 24,49,836 28 685 954 3135790 JAN' 12 2,65,33,029 26,53,3,02 NIL 26,53,3,02 27 71 6391 3369693 FEB'12 2,63,81,568 26,38,156 NIL 26,38,156 26 68592 0 3324076 MARCH' 12 2,56,06,904 25,60,690 NIL 25,60,690 25 64 0172 3200862 TOTAL 28,53,69,272 28536921 866S883 3,72,02,804 THE PLEA TAKEN BY THE ASSESSEE DEDUCTOR THAT THE TA X HAS ALREADY BEEN PAID BY THE DEDUCTEES AND NO DEMAND OF TAX SHOULD BE CREATED ON THIS ACCOUNT IN VIEW OF THE OF THE HON'BLE SUPREME COURT JUDGEMENT IN THE MATTER O F HINDUSTAN COCA-COLA BEVERAGES LTD. V. CIT: 293 ITR 226 AND THE INSTRUCT IONS OF THE CBDT ISSUED IN THE FILE F.NO.275/201/95-IT (B) DATED 29 JANUARY, 1997, HAS BEEN CONSIDERED. THE ASSESSEE DEDUCTOR HAS BEEN ABLE TO FURNISH THE INFORMATION T O THE EXTENT OF RS.28,14,03,474/- AND HAS REQUESTED THAT ON THIS AMOUNT HAS BEEN PAID BY THE RESPECTIVE DEDUCTEES AS PER THE INFORMATION FURNISHED BY HIM, WHICH IS BEING REPROD UCED AS UNDER: - MONTH CONFIRMATIONS AVAILABLE TAX DEDUCTIBLE U/S 194 J TTA X DEPOSITED BY OTHER OPERATOR TAX LIABILITY NO OF MONTHS OF DEFAULT INTEREST U/S 201(1 A) TOTAL LIABILITY APR-11 22,528,634 . 2,252,863 2,252,863 - 20 450,573 450,573 ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 26 OF 31 MAY-11 21,270,533 2,127,053 2,127,053 - 19 404,140 404,140 JUN-11 24,414,079 2,441,408 2,441,408 - 18 439,453 439,453 .LUIL-11 26,084,209 2,608,421 2,608,421 - 17 443,432 443,432 AUG-11 22,352,746 2,235,275 2,235,275 - 16 357,644 357,644 SEP-1 1 21,101,131 2,1 10,113 2,1 10,1 13 - 15 316,517 316,517 OCT-11 19,301,058 1,930,106 1,930,106 - 14 270,215 270,215 NOV-I 1 22,762,894 2,276,289 2,276,289 - 13 295,918 295,918 DEC-] I 24,157,908 2,415,791 2,415,791 - 12 289,895 289,895 JAN-12 26,164,298 2,616,430 2,616,430 - 1 1 287,807 287,807 FEB-12 26,014,942 2,601,494 2,601,494 10 260,149 260,149 MAR-12 25,251,043 2,525,104 2,525,104 - 9 227,259 227,259 TOTAL (A) 281,403,474 28,140,347 28,140,347 - 4,043,002 4,043,002 CONFIRMATIONS NOT RECEIVED FROM PARTY NO OF TAX MONTHS CONFIRMATIONS DEDUCTIBLE TAX TAX OF INTEREST U/S TO TAL MONTH NOT AVAILABLE U/S 194 J DEDUCTED LIABILITY DE FAULT 201(1A) LIABILITY APR-11 317,494 31,749 NIL 31,749 36 11,430 43,179 MAY-11 299,764 29,976 NIL 29,976 35 10,792 40,768 JUN-11 344,066 34,407 NIL 34,407 34 12,386 46,793 JULY,11 367,603 36,760 NIL 36,760 33 13,234 49,994 AUG-LL 315,016 31,502 NIL 31,502 32 11,341 42,842 SEP-11 297,377 29,738 NIL 29,738 31 10,706 40,443 OCT-11 272,008 27,201 NIL 27,201 30 9,792 36,993 NOV-11 320,796 32,080 NIL 32,080 29 11,549 43,628 DEC-11 340,456 34,046 NIL 34,046 28 12,256 46,302 JAN-12 368,731 36,873 NIL 36,873 27 13,274 50,147 FEB-12 366,627 36,663 NIL 36,663 26 13,199 49,861 MAR-12 355,861 35,586 NIL 35,586 25 12,811 48,397 TOTAL (A) 3,965,798 396,580 396,580 142,769 539,348 IN SPITE OF THE SUFFICIENT TIMES/OPPORTUNITIES TAKE N BY THE ASSESSEE DEDUCTOR, THE PR HAS FAILED TO FURNISH THE SUPPORTING EVIDENCE TO PROVE ITS CON TENTION TO THE SUM OF RS.39,65,798/-, AS GIVEN ABOVE. THE CONTENTION OF THE ASSESSEE HAS BEEN CONSIDERED AND BEING ACCEPTED TO THAT EXTENT. ACCORDINGLY THE PR IS HELD LIABLE U/S 201(1) FOR NO T DEDUCTING TAX AT SOURCE AMOUNTING TO RS.3,96,580/- U/S 194J OF THE I.T.ACT,1961 ON THE P AYMENT OF RS.39,65,798/- AND U/S 201(1 A) RS. 41,85,771/-( RS. 40,43,002 + RS. 1,42,769) THER EFORE, THE TOTAL DEMAND CREATED IN THIS ORDER ON THIS ISSUE OF CHARGES PAID ON ACCOUNT OF N ATIONAL ROAMING COMES TO RS. 45,82,351/- 16.2 TAKING NOTE OF THE FACT THAT THE DEPARTMENT I S PLACING HEAVY RELIANCE ON THE ORDER OF THE ASSESSING OFFICE R. THE LD. CIT-DR WAS SPECIFICALLY REQUIRED TO ADDRESS IN THE CONTEXT OF THE FACT THAT THE ORDER UNDER CHALLENGE IS THE ORDE R OF THE ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 27 OF 31 CIT(A). THUS, THE SPECIFIC DEPARTMENTAL GRIEVANCE MADE OUT ON FACTS AND LAW IN THE ORDER UNDER CHALLENGE WAS R EQUIRED TO BE POINTED OUT. THE LD. CIT-DR SUBMITTED THAT H E WOULD CONFINE HIS ARGUMENTS TO RELYING UPON THE ORDER OF ASSESSING OFFICER AS NO SPECIFIC FINDING OF THE CIT(A) WHICH IS BEING ASSAILED, CAN BE POINTED OUT BY HIM. 17. THE LD. AR ON THE OTHER HAND SUBMITTED THAT THE ISSUE IS FULLY COVERED IN FAVOUR OF THE ASSESSEE BY CONSISTE NT ORDERS OF THE ITAT AND THE COURTS. INVITING ATTENTION TO T HE IMPUGNED ORDER, IT WAS SUBMITTED THAT THE CIT(A) HA S ALLOWED RELIEF CONSIDERING A PLETHORA OF DECISIONS ON THE ISSUE WHEREIN THE LEGAL ISSUE HAS BEEN DECIDED IN F AVOUR OF THE ASSESSEE. INVITING ATTENTION TO THE FINDING OF THE CIT(A) AT PAGE 27-28, HEAVY RELIANCE WAS PLACED UPON THE SAID CONCLUSION. FOR READY REFERENCE, THE FINDING UNDER CHALLENGE ON WHICH HEAVY RELIANCE IS PLACED BY THE ASSESSEE I S REPRODUCED HEREUNDER : SIMILAR ISSUE HAS BEEN DECIDED BY THE LD. CIT(A) G URGAON DATED 12.06.2017 IN I.T.A. NO. 149/GGN/10-11 FOR FY 1995 TO 2002-03 THE CASE OF M/S BHARTI AIRTEL LTD. THE LD. CIT(A), RELYING UPON THE DECISION OF H ON'BLE ITAT IN APPELLANT'S OWN CASE HAS HELD THAT THE PROCESS OF ROAMING DOES NOT REQUIRE HUMAN INTERVENTION AND CANNOT BE CONSIDERED AS A TECHNICA L SERVICE FOR THE PURPOSE OF TDS UNDER SECTION 194J OF THE INCOME TAX ACT, 1961. THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN APPELLANT'S OWN CASE HAS AFFIRMED THE VIEW OF THE HON'BLE ITAT 'THAT ROAMING PROCESS BETWEEN PARTICIPATING ENTITIES IS FULLY AUTOMATIC AND DOES NOT REQUIRE ANY HUMAN INTERVENTION'. THIS DECISION IS DIRECTLY APPLICABLE TO THE PRESEN T CASE. MOREOVER, HON'BLE ITAT IN APPELLANT'S OWN CASE FOR AY 2007-08 TO 2011-12 [ITA NO. 3593 TO 3596/DEL/2012] HAS DECIDED THE SIM ILAR ISSUE IN FAVOUR OF THE ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 28 OF 31 ASSESSEE AND THE DEPARTMENT HAS ACCEPTED THE HON'BL E ITAT RULING AND HAS ALSO NOT PREFERRED AN APPEAL BEFORE HIGH COURT. THO UGH THE DECISION OF ITAT IN THIS CASE IS ON IUC CHARGES, IT IS PERTINENT TO MEN TION THAT THE TECHNICAL PROCESS OF ROAMING AND IUC ARE SIMILAR AS BOTH ENTAIL CARRI AGE OF CALLS OF THE SUBSCRIBER OF THE HOME NETWORK TO THE NETWORK OF TH E OTHER OPERATOR. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, IT IS H ELD THE PROCESS OF ROAMING DOES NOT REQUIRE ANY HUMAN INTERVENTION AND CANNOT BE SAID TO BE A TECHNICAL SERVICE FOR THE PURPOSE OF DEDUCTION OF TAX AT SOUR CE UNDER SECTION 194 J OF THE INCOME TAX ACT, 1961. ACCORDINGLY, THE GROUNDS OF A PPEAL NO 3 IS ALLOWED 6. GROUND NO. '1' OF APPEAL IS GENERAL IN NATURE AND R EQUIRES NO SEPARATE ADJUDICATION. SINCE THE SUBSTANTIVE GROUNDS NAMELY '2' AND '3' HAVE BEEN DEALT WITH, NO SEPARATE ADJUDICATION ON GROUNDS '4' AND ' 5' IS REQUIRED. 17.1 IN THE ABSENCE OF ANY SPECIFIC DEPARTMENTAL O BJECTION, THE LD. AR INVITING ATTENTION TO THE PAPER BOOK FIL ED BY THE ASSESSEE IN SUPPORT OF THE SAID CLAIM SUBMITTED THA T THE ASSESSEE RELIES ON THESE DECISIONS. THESE DECISION S, IT WAS SUBMITTED, HAD BEEN CITED BEFORE THE TAX AUTHORITIE S ALSO AND HAVE BEEN CONSIDERED WHILE GRANTING RELIEF. THESE DECISIONS, IT WAS REQUESTED MAY BE TAKEN ON RECORD AS THE ASSE SSEE IS PLACING HEAVY RELIANCE THEREON. IT WAS RE-ITERATED THAT SINCE NO CONTRARY ARGUMENT ON FACTS OR LAW HAS BEEN SUBMI TTED, HE WOULD CONFINE HIMSELF TO PLACING RELIANCE ON THESE ORDERS. THESE ARE EXTRACTED HEREUNDER: 1. CIT (TDS) VS DELHI TRANSCO LIMITED (68 TAXMANN.C OM 231) (SUPREME COURT) 2. CIT VS KOTAK SECURITIES LIMITED (383 ITR 1) (SU PREME COURT) 3. CIT(TDS) VS VODAFONE SOUTH LIMITED (72 TAXMANN. COM 347) (KARNATAKA HIGH COURT) 4. VODAFONE CELLULAR LIMITED (ITA NO. 2802 & 2803 /MDS/2014) (CHENNAI TRIBUNAL) 5. HINDUSTAN COCA COLA BEVERAGES (P) LTD VS CIT (87 TAXMANN.COM 295) (RAJASTHAN HIGH COURT 6. VODAFONE DIGILINK LIMITED V CIT(TDS) [2017] 87 TAXMANN.COM 315 (DELHI TRIBUNAL) 7. VODAFONE CELLULAR LTD. VS, DCIT (ITA 1414 & 141 5/MDS/2014) DATED 21.09.2017 (CHENNAI TRIBUNAL) 8. DISHNET WIRELESS LIMITED VS DCIT(TDS) (45 ITR(T ) 430) (CHENNAI TRIBUNAL) 9. VODAFONE DIGILINK LIMITED VS ITO, TDS (2) (ITA NO. 75 TO 80/JP/2013) (JAIPUR TRIBUNAL) 10. VODAFONE CELLULAR LIMITED (ITA NO. 2802 & 2803 /MDS/2014) (CHENNAI TRIBUNAL) 11. VODAFONE WEST LIMITED (ITA NO. 386/AHD/2011) ( AHMEDABAD BENCH OF THE TRIBUNAL) ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 29 OF 31 12. VODAFONE SPACETEL LIMITED (ITA NOS. 76-77/PAT/ 2012) (PATNA TRIBUNAL) 13. VODAFONE EAST LIMITED (43 ITR(T) 551) (KOLKATA TRIBUNAL) 14. DCIT VS. VODAFONE DIGILINK LIMITED 64 ITR(T) 3 92 (DELHI TRIB.) 15. TATA TELESERVICES (MAHARASHTRA) LIMITED (ITA N O. 2045/MUM/2014) (MUMBAI TRIB.) 17.2 APART FROM THAT, RELIANCE WAS ALSO PLACED UP ON THE ORDER DATED 01.05.2018 OF THE DELHI BENCH IN THE CA SE OF DCIT VS IDEA CELLULAR LTD. IN ITA 852/DEL/2015 WHER EIN ON SIMILAR ISSUE, THE DEPARTMENTAL APPEAL WAS DISMISSE D. RELIANCE WAS ALSO PLACED UPON THE ORDER OF THE CHAN DIGARH BENCH OF THE ITAT DATED 28.06.2018 IN ITA 21 TO 24/CHD/2018 PERTAINING TO 2005-06 TO 2009-10 ASSESS MENT YEAR IN THE CASE OF DCIT VS IDEA CELLULAR LTD. WHER EIN ON A SIMILAR ISSUE, THE DEPARTMENTS APPEAL WAS DISMISSE D BY THE ITAT. 18. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE CO-ORDINATE BENCH IN ITA 21 TO 24/CHD/2018 PERTAINING TO 2005-0 6 CONSIDERED AN IDENTICAL APPEAL OF THE REVENUE AND C ONCLUDED THE ISSUE IN PARA 6 OF THE AFORESAID DECISION HOLDI NG AS UNDER : 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF PROVIDING TELECOMMUNICATION SERVICES IN TELECOM CIR CLES OF PUNJAB FOR WHICH PURPOSES, IT HAD ENTERED INTO ROAMING AGREEMENTS WI TH OTOS. THE AO NOTICED THAT NO TDS HAS BEEN DEDUCTED BY IT FROM THE ROAMIN G CHARGES PAID BY THE ASSESSEE. THE AO HELD THE ASSESSEE TO BE ASSESSEE IN DEFAULT U/S 201(1) R.W.S. 194 J OF THE ACT AS HE WAS OF THE VIEW THAT ROAMING IS NOTHING B UT FEES FOR TECHNICAL SERVICES AND SINCE THERE WAS HUMAN INTERVENTION DURING THE R OAMING PROCESS, TDS U/S 194J OF THE ACT SHOULD HAVE BEEN DEDUCTED. ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 30 OF 31 6.1 IT IS SEEN FROM THE RECORD THAT THE ASSESSEE PR EFERRED AN APPEAL AGAINST THE ORDER OF THE AO. THE CIT(A) WHILE DECIDING THE APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 DIRECTED THE AO TO TAKE A FRESH DECISION ON THE APPLICABILITY OF SECTION 194J TO THE PAYMENT MADE F OR NATIONAL ROAMING CHARGES PAID BY THE ASSESSEE IN THE LIGHT OF THE OBSERVATIO NS OF THE HON'BLE SUPREME COURT IN THE CASE OF M/S BHARTI CELLULARS LTD. (193 TAXMAN 97). 6.2 THE RECORD SHOWS THAT IN COMPLIANCE OF THE DIRE CTIONS OF THE HON'BLE SUPREME COURT, THE DEPARTMENT HAD SOUGHT THE SERVIC ES OF C-DOT, A GOVERNMENT OF INDIA UNDERTAKING AFTER MAKING CERTAI N ENQUIRIES. THE C-DOT DEPUTED MR. TANAY KRISHNA AND MR. ASHOK MITTAL, TEC HNICAL EXPERTS FOR THIS PURPOSE. THE TDS OFFICER RECORDED THE STATEMENTS OF THE ABOVE TECHNICAL EXPERTS ON 08.01.2014 AND COPIES OF THE STATEMENTS SO RECOR DED WERE MADE AVAILABLE TO THE ASSESSEE. SUBSEQUENTLY, THE ASSESSEE REQUESTED FOR A CROSS EXAMINATION OF THE TECHNICAL EXPERTS WHICH WAS ALLOWED ON 31.01.2014. COPIES OF THE CROSS EXAMINATION STATEMENTS WERE ALSO MADE AVAILABLE TO THE ASSESSEE AND THE ASSESSEE FILED ITS REPLY ON 12.2.2014 AND 17.2.2014 . AFTER CONSIDERING THE OPINION OF THE TECHNICAL EXPERTS AS WELL AS THE EXPLANATION OF THE ASSESSEE, THE TDS OFFICER HELD THAT, 'THE PROCESS OF INTERCONNECTION FOR THE PURPOSE OF CARRIAGE OF CALLS INVOLVES MANY PROCESSES LIKE MAINTENANCE, SUPERVIS ION AND MONITORING, FAULT DETECTION AND RECTIFICATION, MONITORING AND QUALITY OF SIGNALS, PROVISIONS OF ADDITIONAL CAPACITY WHEN THE INSTALLED CAPACITY GET S EXHAUSTED, CAPACITY OF MEDICINE ETC. THE ENTIRE PROCESS IS DEPENDENT UPON THE SERVICES OF HIGHLY TECHNICAL MANPOWER AND INSTALLATIONS OF NETWORK HAV ING VARIOUS PERIPHERAL, HARDWARE AND SOFTWARE WHICH ARE TECHNICAL IN NATURE . THIS HARDWARE, SOFTWARE ALONG WITH PERIPHERALS NEEDS CONTINUOUS MONITORING, MAINTENANCE ETC. TO ENSURE FAULT FREE CARRIAGE OF CALL FOR PURPOSE OF INTERCON NECTION. THIS ESSENTIALLY INVOLVES THE HUMAN INTERVENTION.' ACCORDINGLY, IT WAS HELD T HAT THE PAYMENTS MADE FOR INTERCONNECTION ARE FEES FOR TECHNICAL SERVICES AND NEED TO BE COVERED U/S 194J OF THE INCOME TAX ACT 1961. 18.1 WE FIND THAT THERE IS NO CONTRARY FACT, ARGUM ENT OR LEGAL VIEW CITED BEFORE US TO TAKE A CONTRARY VIEW. ACCORDINGLY, IN THE PECULIAR FACTS AND CIRCUMSTANCE S OF THE PRESENT CASE IN THE ABSENCE OF ANY INFIRMITY HAVING BEEN POINTED OUT BY THE REVENUE IN THE ORDER, WE FIND NO MERIT IN THE DEPARTMENTAL APPEAL. THE GROUNDS, ACCORDINGLY, ARE DISMISSED. SAID ORDER WAS PRONOUNCED IN THE OPEN CO URT AT THE TIME OF HEARING ITSELF. ITA 317 TO 320/CHD/2019 ITA 425 TO 427/CHD/2019 ITA 447&448 & 607&608/CHD/2019 PAGE 31 OF 31 19. IN THE RESULT, ITA 608/CHD/2019 FILED BY THE RE VENUE IS DISMISSED. 20. SINCE FACTS, CIRCUMSTANCES AND ARGUMENTS IN THE REMAINING APPEALS FILED BY THE REVENUE NAMELY ITA 4 47, 448 AND 607/CHD/2019 REMAIN THE SAME, ACCORDINGLY, FOR SIMILAR REASONS IN TERMS OF THE PRONOUNCEMENT MADE IN THE COURT, THE APPEALS ARE DISMISSED. 21. IN THE RESULT, THE APPEALS OF ASSESSEE ARE PART LY ALLOWED FOR STATISTICAL PURPOSES AND APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY,2019. SD/- SD/- ( % & ' ( ) ) ( ! ) (ANNAPURNA GUPTA) DIVA SINGH) *+ #/ ACCOUNTANT MEMBER ' #/ JUDICIAL MEMBER