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

ITA 611/CHANDI/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95460 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 28-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR AMA RVEER SINGH
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 133A; 201(1); 148; 263; 15

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NOS. 610 TO 614/CHD/2013 ASSESSMENT YEARS:2006-07 TO 2010-11 VODAFONE SOUTH LIMITED, VS. THE CIT(TDS) (FORMERLY VODAFONE ESSAR SOUTH LIMITED) CHANDIGAR H MOHALI PAN NO. AABCB5847L (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SALIL KAPOOR RESPONDENT BY : DR. AMARVEER SINGH DATE OF HEARING : 09/07/2015 DATE OF PRONOUNCEMENT : 06/08/2015 ORDER PER T.R.SOOD, A.M. THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY CIT(TDS), CHANDIGARH DATED 30.3.2013. 2. IN ALL THESE APPEALS COMMON ISSUES HAVE BEEN RAI SED, THEREFORE, ALL APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER. 3. FIRST WE SHALL DEAL WITH ITA NO. 610/CHD/2013, W HEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE NOTICE ISSUED UNDER SECTION 263 OF THE OF INCOM E TAX ACT, 1961 (ACT) BY THE LEARNED COMMISSIONER OF INCOME TAX (TDS), CHANDIGARH (HEREINAFTER REFERRED TO AS THE LEARNED CIT(TDS)) AND THE ORDER PASSED UNDER SECTION 263 O F THE ACT ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 2 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE OF THE CASE AND IN LAW, THE LEARNED CIT(TDS) ERRED IN ASSUMING THE JURISDICTION UNDER SECTION 263 OF THE ACT SINCE:- 2.1 THE REVISIONARY PROCEEDINGS UNDER SECTION 263 OF THE ACT HAVE MERELY BEEN INITIATED ON THE BASIS OF THE LETTER RECEIVED FROM ASSISTANT COMMISSIONER OF INCOME TAX (TDS), CHANDIGARH (ACIT) AND THE CIT(TDS) DID NOT ARRIVE AT ANY INDEPENDENT SATISFACTION FOR INITIATION OF SUCH PROCEEDINGS. 2.2 BY ACCEDING TO THE REQUEST OF THE LEARNED ACIT, THE CIT(TDS) HAS EFFECTIVELY ENHANCED THE TIME LIMITATION PRESCRIBED UNDER SECTION 201(3) OF THE ACT FOR COMPLETION OF 201 PROCEEDINGS BY A TDS OFFICER. 2.3 THE ORDER PASSED BY THE LEARNED ACIT IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE SINCE THE LEARNED ACIT TOOK ONE OF THE TWO PERMISSIBLE VIEWS AFTER CONDUCTING A DETAILED ENQUIRY IN RESPECT OF VARIOUS EXPENSES INCURRED BY THE APPELLANT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE ORDER PASSED BY THE LEARNED CIT(TDS) UNDER SECT ION 263 OF THE ACT IS BAD IN LAW AND VOID AB-INTIO, SINCE T HE LEARNED CIT HAS COMPLETELY IGNORED THE FACT THAT THE ARRANG EMENT BETWEEN APPELLANT AND THE PRE-PAID DISTRIBUTORS DUR ING THE SUBJECT FY WAS ON A PRINCIPAL TO AGENT BASIS AND THE APPELLANT HAD DULY DEDUCTED TAX U/S 194H OF THE ACT ON THE COMMISSION PAID TO THE PRE-PAID DISTRIBUTORS. 4. BRIEF FACTS OF THE CASE ARE THAT A PROPOSAL WAS PUT UP BY ACIT (TDS) CHANDIGARH BEFORE THE COMMISSIONER FOR REVISING THE ORDER U/S 263. ON THE BASIS OF PROPOSAL, LD. COMMISSIONER ISSUED A SHOW CAUSE N OTICE TO THE ASSESSEE POINTING OUT THAT ISSUE REGARDING TDS ON COMMISSION PAID IN VIEW OF SECTION 194H WAS NOT CONSIDERED BY ACIT (TDS). THE ASSESSEE WAS PROVIDE D WITH AN OPPORTUNITY OF BEING HEARD. IN RESPONSE, THE ASSESSEE FILED A DET AILED REPLY WHICH HAS BEEN REPRODUCED BY LD. COMMISSIONER AT PAGES 2 TO 8 OF HIS ORDER. IN THIS REPLY IT HAS BEEN SUBMITTED THAT FOR EXERCISING POWER U/S 263 IT HAS TO BE ESTABLISHED THAT ORDER PASSED BY THE AUTHORITY IS ERRONEOUS AS WELL AS PRE JUDICIAL TO THE INTEREST OF REVENUE AND HAS LED TO LOSS TO THE REVENUE. SINCE THESE INGREDIENTS ARE NOT THERE, THEREFORE, NO REVISIONARY ORDER U/S 263 CAN BE PAS SED. LD. COMMISSIONER 3 EXAMINED THESE SUBMISSIONS AND DID NOT FIND FORCE I N THE SAME FOR WHICH HE HAS GIVEN THE FOLLOWING REASONS: 1. THAT ON EXAMINING AN SCRUTINY OF THE ASSESSMENT RE CORD, I FIND THAT THE ASSESSING OFFICER HAS OMITTED TO HAVE DEAL T WITH THE ISSUE OF DISCOUNT/COMMISSION PAID ON PREPAID/RECHAR GE VOUCHERS LIABLE FOR TDS US 194H OF THE I.T. ACT. TH IS FACT HAS BEEN ADMITTED BY THE ASSESSING OFFICER HIMSELF WHO PASSED ORDER U/S 201(1)/201(1A) FOR ALL THESE YEARS. THERE FORE, THE ORDERS PASSED BY THE AO ARE ERRONEOUS. SINCE, THE A O HAS NOT DEEMED THE ASSESSEE AN ASSESSEE IN DEFAULT FOR NOT HAVING DEDUCTED TDS ON THE PAYMENTS MADE AS DISCOUNT/COMMI SSION TO THE VENDORS AGAINST PREPAID SIM CARDS/RECHARGE VOUC HERS, DESPITE THE FACT THAT ON THE POSTPAID SIM CARDS THE ASSESSEE HAS BEEN DEDUCTING TAX AT SOURCE 194H AND ALSO HAVING N OT CHARGED THE MANDATORY INTEREST U/S 201(1A) FOR NOT DEDUCTIN G TAX AT SOURCE ON THE DEDUCTIBLE AMOUNT PAID BY WAY OF DISCOUNT/COMMISSION TO THE VENDORS. HENCE, THE ORDE RS PASSED FOR ALL THESE YEARS BY THE AO ARE PREJUDICIAL TO TH E INTEREST OF REVENUE. I AM, THEREFORE, SATISFIED THAT THE PROVIS IONS OF SECTION263 OF I.T. ACT, 1961 ARE ATTRACTED FOR ALL THESE YEARS. 2. THE RELIANCE PLACE BY THE ASSESSEE ON THE DECISIONS OF THE HONBLE COURTS ARE ALSO DISTINGUISHABLE ON FACTS AN D ISSUES, HENCE NOT APPLICABLE TOT THE PRESENT CASE AS THE AS SESSING OFFICER IN THIS CASE HAS NOT TAKEN ANY VIEW AND DEC ISION AT ALL ON THIS ISSUE, HENCE THE QUESTION OF TWO POSSIBLE V IEWS DOES NOT ARISE. CONVERSELY, IT IS A CASE WHERE ASSESSING OFF ICER, WHO PASSED THE ORDER U/S 201(1)/201(1A), HIMSELF ADMITT ED THE FACT OF HAVING OMITTED THIS ISSUE OF THE ASSESSEE BEING LIABLE FOR DEDUCTING TAX AT SOURCE U/S 194H OF THE I.T. ACT ON THE DISCOUNT/COMMISSION PAID TO THE VENDORS ON PREPAID SIM CARDS / RECHARGE VOUCHERS. 3. THE CLAIM OF THE ASSESSEE THAT DISCOUNT/COMMISSION PAID TO VENDORS AGAINST PREPAID SIM CARDS/RECHARGE VOUCHERS ARE NOT LIABLE FOR TDS U/S 194H OF THE I.T. ACT IS ALSO NOT CORRECT AND ACCEPTABLE FOR THE REASON THAT THE HONBLE HIGH COU RT OF DELHI IN THE CASE OF IDEA CELLULAR HAS HELD THAT DISCOUNT PAID TO THE VENDORS ON PREPAID SIM CARDS/ RECHARGE VOUCHERS ARE IN THE NATURE OF COMMISSION ATTRACTING PROVISIONS OF SECTI ONS 194H OF THE I.T. ACT, 1961. IT VIEW OF THE ABOVE THE ORDER PASSED BY ACIT (TDS) U/S 201(1) READ WITH SECTION 20(1A) WAS HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE SAME WAS SET ASIDE WITH A DIRECTION TO ASSESSING OF FICER TO EXAMINE THE DEFAULT OF THE ASSESSEE TO THE EXTENT OF NOT DEDUCTING TAX AT SOURCE ON DISCOUNT / COMMISSION PAID TO THE VENDORS AGAINST PRE PAID SIM CARD / REC HARGE VOUCHER DURING THESE YEARS. 4 5. BEFORE US LD. COUNSEL FOR THE ASSESSEE REFERRED TO PAGE 1 OF THE PAPER BOOK, WHICH IS COPY OF THE NOTICE ISSUED BY THE INCOME TA X OFFICER (HQ). HE POINTED OUT THAT IN THIS NOTICE IT HAS BEEN MENTIONED THAT PROPOSAL HAS BEEN PUT BY ACIT (TDS) U/S 263 BECAUSE ISSUE OF TDS ON PREPAID SIM C ARD U/S 194H WAS OMITTED TO BE VERIFIED. HE SUBMITTED THIS IS TOTALLY WRONG AND IN THIS REGARD HE REFERRED TO THE ORDER PASSED U/S 201 AND REFERRED TO FIRST PARA OF THE ORDER AND POINTED OUT THAT IT HAS BEEN CLEARLY MENTIONED THAT FROM THE DETAILS FU RNISHED BY THE ASSESSEE- DEDUCTOR COMPANY THAT THE PERSON RESPONSIBLE OF THE ASSESSEE COMPANY HAS NOT DEDUCTED THE TAX AT SOURCE FROM THE PAYMENT MADE TO WARDS COMMISSION / INCENTIVE OF PRE PAID CARDS AS REQUIRED U/S 194H. FROM THIS OBSERVATION, IT BECOMES CLEAR THAT ISSUE WAS DULY EXAMINED BY THE ACIT (TDS). HE FURTHER SUBMITTED THAT UNDER SECTION 263 THE COMMISSIONER WAS REQUIRED TO INDICA TE IN THE NOTICE THAT ORDER PASSED BY THE LOWER AUTHORITIES WAS ERRONEOUS AND P REJUDICIAL TO THE REVENUE BUT NO SUCH MENTION HAS BEEN MADE IN THE NOTICE. THEREF ORE, NOTICE WAS WITHOUT JURISDICTION AND IN THIS REGARD HE REFERRED TO THE DECISION OF LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF JHEENDU RAM VS CIT 130 TTJ 82 (LUCK.). HE PARTICULARLY REFERRED TO THE OBSERVATIONS MADE IN PARA 4 WHICH C ONTAIN THE SUBMISSIONS TO THE SAME EFFECT AND THE FINDINGS WERE RECORDED IN PARA 6 WHICH HE READ OUT. 6. HE FURTHER SUBMITTED THAT READING OF THE NOTICE WOULD SHOW THAT SAME HAS BEEN SIGNED BY THE ITO, HQ WHEREAS THE REQUIREMENT OF LAW IS THAT NOTICE SHOULD HAVE BEEN SIGNED BY THE COMMISSIONER BECAUSE POWER U/S 263 VESTS WITH HIM. HE CONTENDED THAT SIMILAR VIEW WAS TAKEN BY THE CHANDI GARH BENCH OF THE TRIBUNAL IN THE CASE OF NAND PARKASH & CO. VS. ITO 38 ITD 1(CHD ). IN THIS REGARD HE READ OUT PARA 9 OF THIS JUDGEMENT. 7. THE LD. COUNSEL POINTED OUT THAT ORDER U/S 201(1 ) HAS BEEN PASSED ON 24.3.2011, ON THAT DATE THERE WAS A PRECEDENT ALREA DY AVAILABLE IN CASE OF ACIT (TDS) VS. IDEA CELLULAR LTD., 125 ITD 222 (HYD.) WH ERE IT WAS HELD THAT 5 PROVISIONS OF SECTION 194H WERE NOT APPLICABLE IN C ASE OF SALE OF SIM CARDS / RECHARGE CARDS BY THE CELLULAR OPERATOR COMPANIES. THEREFORE, AT THE TIME OF FRAMING OF THE ORDER IT WAS POSSIBLE TO TAKE A VIEW THAT PROVISIONS OF SECTION 194H ARE NOT APPLICABLE. ONCE A POSSIBLE VIEW HAS BEEN TAKEN THEN SUCH AN ORDER CANNOT BE CALLED ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE AND IN THIS REGARD HE RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES CO LTD VS. CIT 243 ITR 83 (SC) AND CIT VS. MAX IN DIA LTD 295 ITR 283 (SC) . 8. THE LD. COUNSEL FURTHER CONTENDED THAT COMMISSIO NER HAS NO POWER TO PASS AN ORDER BEYOND THE ISSUES RAISED IN NOTICE AND IN THIS REGARD HE RELIED ON THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT JAGADHRI ELECTRIC SUPPLY AND INDUSTRIAL CO. 140 ITR 490 (P&H ). HOWEVER, WHEN LD. COUNSEL WAS CONFRONTED BY THE BENCH THAT HOW THE LD . COMMISSIONER HAS TRAVELLED BEYOND THE NOTICE, HE SIMPLY STATED THAT IN THE NOT ICE IT HAS BEEN STATED THAT ISSUE REGARDING DEDUCTION OF TAX U/S 194 WAS OMITTED TO BE VERIFIED WHEREAS IN PARA 1 OF HIS FINDING AT PAGE 8 THE COMMISSIONER STATES TH AT ASSESSING OFFICER HAS OMITTED TO HAVE DEALT WITH THE ISSUE OF DISCOUNT COMMISSION PAID ON PREPAID / RECHARGE VOUCHERS LIABLE FOR TDS U/S 194 H OF THE I.T. ACT. ACCORDING TO HIM THERE IS A LOT OF DIFFERENCE BETWEEN VERIFY AND OMITTED. 9. ON THE OTHER HAND LD. DR SUBMITTED THAT THERE IS NO NEED TO ISSUE ANY NOTICE BEFORE ASSUMING JURISDICTION U/S 263 OF THE ACT. HE CONTENDED THAT ASSESSING OFFICER HAS SIMPLY SET UP A PREAMBLE IN THE ORDER U /S 201 REGARDING NON DEDUCTION OF TAX U/S 194H BUT NO QUERY WAS RAISED IN THIS REG ARD AND NO REPLIES WERE FILE. THEREFORE, IT IS A CLEAR CASE OF NON APPLICATION OF MIND BY THE ASSESSING OFFICER. ONCE THIS DEFECT WAS NOTICED, THE ASSESSING OFFICER PUT UP A PROPOSAL FOR REVISION U/S 263 OF THE ACT WHICH WAS EXAMINED BY THE COMMIS SIONER AND THEN HE DIRECTED TO ISSUE A NOTICE. IN THIS REGARD HE FILED COPIES O F THE NOTING SHEETS FROM THE FOLDER OF THE COMMISSIONER WHICH SHOWS THAT PROPOSAL WAS A PPROVED ON 26.4.2012. AS FAR 6 AS THE DATE OF NOTICE IS CONCERNED, IT IS A NORMAL PRACTICE WITH THE LOWER STAFF TO PREPARE ALL THE PAPERS INCLUDING NOTICE BEFORE PUTT ING UP BEFORE THE SENIOR OFFICER AND NOTICE WAS PREPARED ON 23.4.2012 BUT THE SAME W AS DISPATCHED LATER ON AFTER APPROVAL OF THE COMMISSIONER WAS OBTAINED. 10. HE CONTENDED THAT THERE IS NO FORCE IN THE SUBM ISSIONS THAT ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEWS. FIRSTLY, THE A SSESSING OFFICER HAS NOT EXAMINED THE ISSUE OF DEDUCTION OF TAX FROM THE COM MISSION PAID ON PREPAID / RECHARGE VOUCHERS ON WHICH TDS WAS LIABLE TO BE DE DUCTED U/S 194H. IN ANY CASE THE DECISION IN THE CASE OF IDEA CELLULAR LTD VS. D CIT WHICH WAS DECIDED BY THE TRIBUNAL ON 28.3.2008 BY DELHI BENCH WAS REVERSED B Y HON'BLE DELHI HIGH COURT ON 19.2.2010 WHICH IS REPORTED IN CIT VS. IDEA CELL ULAR LIMITED 325 ITR 148(DELHI). ONE MORE HIGH COURT I.E. HON'BLE KEREL A HIGH COURT HAS ALSO HELD IN THE CASE OF VODAFONE ESSAR CELLULAR LTD V ACIT (TD S) 332 ITR 255 (KER) THAT TDS WAS REQUIRED TO BE DEDUCTED ON DISCOUNT GIVEN T O THE DISTRIBUTOR ON SALE OF SIM CARD / RECHARGE COUPONS. THIS DECISION WAS ALS O RENDERED ON 17.8.2010. THE ORDER U/S 201 WAS FINALLY PASSED ON 24.3.2011 WHIC H MEANS THAT BOTH THE DECISIONS ON THE DATE OF ORDER WERE AGAINST THE ASSESSEE AND, THEREFORE, THE VIEW THAT NO TDS IS REQUIRED TO BE MADE WAS NOT A POSSIBLE VIEW. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD AND THE DECISIONS CITE D BY BOTH THE PARTIES. WE ARE UNABLE TO AGREE WITH THE SUBMISSIONS OF LD. COUNSE L FOR THE ASSESSEE. SECTION 263(1) WHICH GIVES REVISIONARY POWER TO THE COMMISS IONER READS AS UNDER:- 263 (1) : THE COMMISSIONER MAY CALL FOR AND EXAMIN E THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE INCOME-TAX OFF ICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPOR TUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THER EON AS THE 7 CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORD ER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLIN G THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. 12. THE CAREFUL READING OF THE PROVISION WOULD SHOW THAT THERE IS NO REQUIREMENT OF GIVING ANY NOTICE BEFORE ASSUMING THE JURISDICTI ON UNDER THIS PROVISION. THIS POSITION HAS BEEN CLARIFIED BY HON'BLE SUPREME COUR T IN THE CASE OF CIT V ELECTRO HOUSE 82 ITR 824 (SC) . THE HEAD NOTED OF THE DECISION READS AS UNDER:- UNLIKE SECTION 34, SECTION 33B OF THE INCOME-TAX A CT, 1922, DOES NOT REQUIRE ANY NOTICE TO BE ISSUED BY THE COM MISSIONER BEFORE HE ASSUMES JURISDICTION TO PROCEED TO REVISE AN ORDER PASSED BY THE INCOME-TAX OFFICER. THE JURISDICTION OF THE COMMISSIONER TO PROCEED UNDER SECTION 33B IS NOT DE PENDENT ON THE FULFILMENT OF ANY CONDITION PRECEDENT. HE IS NOT REQUIRED TO GIVE ANY NOTICE BEFORE COMMENCING THE I NQUIRY. ALL THAT HE IS REQUIRED TO DO, BEFORE REACHING HIS DECI SION AND NOT BEFORE COMMENCING THE INQUIRY, IS TO GIVE THE ASSES SEE AN OPPORTUNITY OF BEING HEARD AND MAKE OR CAUSE TO MAK E SUCH INQUIRY AS HE DEEMS NECESSARY. THESE REQUIREMENTS H AVE NOTHING TO DO WITH THE JURISDICTION OF THE COMMISSI ONER. THEY PERTAIN TO THE REGION OF NATURAL JUSTICE. BREACH OF THE PRINCIPLES OF NATURAL JUSTICE MAY AFFECT THE LEGALI TY OF THE ORDER MADE BUT THAT DOES NOT AFFECT THE JURISDICTIO N OF THE COMMISSIONER. THE ABOVE DECISION MAKES IT ABSOLUTELY CLEAR THAT T HERE WAS NO REQUIREMENT OF GIVING ANY NOTICE AND, THEREFORE, THERE IS NO MERIT IN THE CONTENTION POINTING TO VARIOUS DEFECTS IN THE NOTICE. NO DOUBT THIS DECISI ON WAS RENDERED U/S 33B OF THE OLD ACT I.E. INCOME TAX ACT, 1922. SECTION N 33B O F THIS OLD ACT READS AS UNDER:- ' THE COMMISSIONER MAY CALL FOR AND EXAMINE THE REC ORD BY ANY PROCEEDING UNDER THIS ACT AND IF HE CONSIDERS T HAT ANY ORDER PASSED THEREIN BY THE INCOME-TAX OFFICER IS E RRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BE ING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH ENQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORD ER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLIN G THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT.' 8 A CAREFUL READING OF SECTION 33B OF THE OLD ACT ALO NG WITH SECTION 263(1) OF THE NEW ACT I.E. INCOME TAX ACT, 1961 WOULD SHOW THAT P ROVISION IS IDENTICAL. THE ONLY DIFFERENCE IS THAT INSTEAD OF EXPRESSION INCOME TA X OFFICER USED IN THE OLD ACT, EXPRESSION ASSESSING OFFICER IS USED IN THE NEW A CT. THEREFORE, THIS DECISION IS CLEARLY APPLICABLE WITH REFERENCE TO THE NEW ACT AL SO. 13. FURTHER TO ABOVE, WHILE COMMENTING ON THIS ISSU E IN THE COMMENTARY OF LAW OF INCOME TAX BY SAMPATH IYENGER, LD. AUTHOR HAS COMMENTED THE FOLLOWING ON THIS ASPECT:- 53. NATURAL JUSTICE: PRINCIPLES OF NATURAL JUSTIC E ARE GENERALLY INVOKED IN ATTACKING THE ORDERS OF COMMIS SIONER UNDER THIS SECTION THE SUPREME COURT HAS HELD IN SE VERAL CASES THAT CONCEPTS OF NATURAL JUSTICE HAVE UNDERGONE VIT AL CHANGE AND THAT THE DISTINCTION BETWEEN ADMINISTRATIVE OR DERS AND QUASI-JUDICIAL ORDER IS SO THIN THAT IT HAS ALMOST VANISHED IN RECENT TIMES. RULES OF NATURAL JUSTICE ARE NOT EMBO DIED RULES, AND THEY DEPEND ON THE FACTS AND CIRCUMSTANCES OF E ACH CASE. THIS PRINCIPLE OF WHAT IS CALLED NATURAL JUSTICE MAY BE BURDENSOME TO SOME MINDS, BUT THIS PRICE A SMALL PRICE HAS TO BE PAID IF WE DESIRE A SOCIETY GOVERNED BY L AW. A QUASI-JUDICIAL BODY MAY NOT BE REQUIRED TO HOLD AN ENQUIRY IN ALL CASES BUT IT WILL BE CLEAR BREACH OF NATURAL JU STICE IF IT DOES NOT INFORM THE PARTY AND GIVE HIM A CHANCE OF DEALING WITH IT. IT IS THE DUTY OF A QUASI-JUDICIAL AUTHORI TY LIKE THE COMMISSIONER OF INCOME-TAX ACTING UNDER SECTION 263 TO INFORM HE ASSESSEE OF THE EVIDENCE SOUGHT TO BE REL IED ON AND GIVE HIM AN OPPORTUNITY TO MEET THE CASE. IF THE CO MMISSIONER ACTS UPON INFORMATION COLLECTED BY HIM WHICH HE HAS NOT DISCLOSED TO THE ASSESSEE OR TO THE PARTY CONCERNED , AND IN RESPECT OF WHICH FULL OPPORTUNITY OF MEETING THE IN FERENCES WHICH ARISE OUT OF IT HAS NOT BEEN GIVEN, IT WOULD BE A CLEAR BREACH OF NATURAL JUSTICE. IN WISEMAN V BORNEMAN LORD DENNING. M R, HELD THAT FOR THE PURPOSE OF JUST DET ERMINING WHETHER THERE IS A PRIMA FACIE, CASE OR NOT AND FOR ARRIVING AT A SORT OF PRELIMINARY DECISION, PRINCIPLES OF NATUR AL JUSTICE ARE NOT APPLICABLE. THERE IS A GREAT DIFFERENCE BE TWEEN A 9 TRIBUNAL WHICH HAS TO DECIDE THE RIGHTS AND WRONGS OF THE PARTIES AND ONE WHICH HAS TO JUST DETERMINE SIMPLY WHETHER THERE IS OR THERE IS NOT A PRIMA FACIE CASE. APPLYING THE ABOVE PRINCIPLES TO THE PROCEDURE UNDE R SECTION 263, THE COMMISSIONER WOULD BE JUSTIFIED IN INITIAL LY ISSUING A NOTICE TO THE ASSESSEE ON A PRIMA FACIE OR TENTA TIVE IMPRESSION HE MAY NOT FORMED ON THE MATERIALS HE HA D COLLECTED; BUT CERTAINLY PRINCIPAL OF NATURAL JUSTI CE WOULD BE VIOLATED IF, BEFORE FORMING HIS FINAL CONCLUSION AN D BEFORE HIS PASSING THE FINAL ORDER, UNDER SECTION 263, HE DOES NOT PLACE ALL THE MATERIALS HE HAS GATHERED BEFORE THE ASSESS EE AND GIVE HIM A FULL CHANCE OF REBUTTING OR EXPLAINING. IN CI T V ELECTRO HOUSE, THE SUPREME COURT HELD THAT SECTION 263 (UN LIKE SECTION 148 CORRESPONDING TO SECTION 34 OF 1922 ACT ) DOES NOT REQUIRE ANY NOTICE TO BE ISSUED BY THE COMMISSIONER BEFORE HE ASSUMES JURISDICTION TO THE COMMISSIONER TO PROC EED UNDER SECTION 263 IS NOT DEPENDENT ON THE FULFILLMENT OF ANY CONDITION PRECEDENT. HE IS NOT REQUIRED TO GIVE ANY NOTICE BEFORE COMMENCING THE ENQUIRY. ALL THAT HE IS REQUI RED TO SO, BEFORE REACHING OPPORTUNITY OF BEING HEARD AND MAKE OR CAUSE TO MAKE SUCH ENQUIRY AS HE DEEMS NECESSARY. T HE SUPREME COURT HELD THAT THESE REQUIREMENTS HAVE NOT HING TO DO WITH THE JURISDICTION OF THE COMMISSIONER, THEY PERTAIN TO THE REGION OF NATURAL JUSTICE; BREACH OF PRINCIPLES OF NATURAL JUSTICE MAY AFFECT THE LEGALITY OF THE ORDER MADE B Y THE COMMISSIONER, BUT DOES NOT AFFECT THE JURISDICTION OF THE COMMISSIONER. THE SUPREME COURT REFRAINED FROM SPEL LING OUT WHAT PRINCIPLES OF NATURAL JUSTICE SHOULD BE OB SERVED IN AN ENQUIRY UNDER THIS SECTION. THEREFORE, FROM THE ABOVE IT BECOMES ABSOLUTELY CLE AR THAT NO NOTICE ETC. IS REQUIRED TO BE ISSUED BEFORE ASSUMING JURISDICTION U/S 263. THE ONLY REQUIREMENT IS THAT AN OPPORTUNITY OF BEING HEARD BE PROVIDED T O THE ASSESSEE. 14. AS FAR AS OPPORTUNITY OF BEING HEARD IS CONCERN ED, IT EMANATES FROM THE FIRST PRINCIPLES OF NATURAL JUSTICE I.E. AUDI ALTERN PARTEM IN SIMPLE ENGLISH IT WOULD 10 MEAN THAT NOBODY SHOULD BE HANGED WITHOUT BEING HEA RD. THIS PRINCIPLE HAS BEEN INCORPORATED IN THIS SECTION SO AS REVISIONARY ORDE R SHOULD BE PASSED AFTER CONSIDERING THE CONTENTIONS OF THE OTHER PARTY. NO W AS FAR AS OPPORTUNITY OF BEING HEARD IS CONCERNED, WE DO NOT THINK THAT IT IS NECE SSARY THAT COMMISSIONER HIMSELF SHALL SIGN THE COMMUNICATION OF GIVING SUCH OPPORTU NITY FOR EXAMPLE ALL THE HIGH COURTS AND SUPREME COURT DEALING WITH A PARTICULAR PETITION, SIMPLY PRONOUNCE IN THE COURT ISSUE NOTICE. IT DOES NOT MEAN THAT LD . JUDGES ARE REQUIRED TO SIGN ALL SUCH NOTICES AND THAT WORK IS DONE BY THE REGISTRY OF THE HIGH COURT OR SUPREME COURT. IN VIEW OF THE ABOVE POSITION, WE ARE OF THE OPINION THAT LD. COMMISSIONER HAS INVOKED THE JURISDICTION CORRECTLY. IN FACT SOM E ARGUMENTS WERE MADE THAT HOW THE PROPOSAL HAS BEEN PUT UP BY ASSESSING OFFICER. HOWEVER, ON QUESTIONING BY BENCH LD. COUNSEL HAS FAIRLY AGREED THAT THE LAW PE RMITS THE SUBORDINATE STAFF INCLUDING THE ASSESSING OFFICER TO PUT UP A PROPOSA L FOR PASSING REVISIONARY ORDER BEFORE THE COMMISSIONER. IN THIS REGARD WE MAY POI NT OUT THAT HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. BHAGAT SHYAM & CO 188 ITR 608 (ALL.) CLEARLY OBSERVED THAT THERE IS NO BAR TO THE INCOME TAX OFF ICER BRINGING MATERIAL TO THE NOTICE OF THE CIT OF INITIATION OF REVISION PROCEED INGS. THE ONLY RIDER GIVEN BY THE HIGH COURT WAS THAT COMMISSIONER MUST APPLY HIS MIN D TO THE MATERIAL PLACED BEFORE HIM. SIMILAR VIEW HAS BEEN TAKEN BY HON'BLE CALCUTTA HIGH COURT IN THE CASE OF JAGDISH KUMAR GULATI V CIT 263 ITR 71. WE HAVE VERIFIED THE RECORD AND IT IS CLEAR THAT WHEN THE PROPOSAL WAS PUT UP BEFOR E THE LD. COMMISSIONER, THE SAME WAS APPROVED BY THE LD. COMMISSIONER ON 26.4.2 012. NO DOUBT THE NOTICE IS DATED 23.4.2012 BUT WE ARE SATISFIED WITH THE REASO NING GIVEN BY LD. DR THAT NOTICES ARE ALSO PREPARED SIMULTANEOUSLY WITH THE P ROPOSAL. FURTHER VERIFICATION OF THE RECORD SHOWS THAT NOTICE WAS DISPATCHED ONLY ON 27.4.2012 BY SPEED POST I.E. AFTER OBTAINING THE APPROVAL OF THE LD. COMMISSIONE R. IN ANY CASE THE ASSESSEE CANNOT OBJECT TO THIS TECHNICALITY BECAUSE PROPER O PPORTUNITY OF BEING HEARD WAS PROVIDED TO THE ASSESSEE WHICH HAS BEEN DULY AVAIL ED AND DETAILED REPLY WAS SUBMITTED BEFORE THE LD. COMMISSIONER AFTER VARIOUS HEARINGS ON 28.3.2013. TTHE 11 ASSESSEE HAS FILED DETAILED SUBMISSIONS WHICH HAVE BEEN REPRODUCED BY THE LD. COMMISSIONER AT PAGES 2 TO 8 OF HIS ORDER. THEREFOR E, CLEARLY THE ASSESSEE HAS BEEN PROVIDED WITH AN OPPORTUNITY OF BEING HEARD WHICH H AS BEEN AVAILED BY IT. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE OPINION, THA T THERE IS NO NEED TO DISCUSS FEW DECISIONS OF THE TRIBUNAL WITH RESPECT TO THE NOTIC E BECAUSE NO SUCH NOTICE WAS REQUIRED AND SUCH DECISIONS WERE RENDERED WITHOUT N OTICING THE BINDING PRECEDENT FROM HON'BLE SUPREME COURT IN THE CASE OF CIT V ELE CTRO HOUSE (SUPRA). 15. COMING TO THE NEXT IMPORTANT CONTENTION I.E. THE COMMISSIONER HAS TRAVELLED BEYOND THE NOTICE, WE FIND NO FORCE IN THIS CONTENT ION. THE NOTICE IN THIS CASE READS AS UNDER:- F. NO: .CIT(TDS)/CHD/263/2011-12/ SS2 DATED: 23.04.2012 TO M/S VODAFONE ESSAR SOUTH INDIA LTD., PLOTNO.C-131,ELTOP, INDUSTRIAL AREA, PHASE-VIII, MO HALI. SIR, SUB: PROPOSAL U/S 263 OF THE I.T. ACT, 1961 FOR THE A. YRS : 2006-07 TO 2010-11- REGARDING- PLEASE REFER TO THE SUBJECT NOTED ABOVE. IN THIS REGARD, I HAVE BEEN DIRECTED TO SUBMIT THAT THE ASSTT. COMMISSIONER OF INCOME TAX (TDS), CHANDIGARH VIDE LETTER NO. 43 DAT ED 12.04.2012 HAS SUBMITTED THE PROPOSAL UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 ON TH E GROUND THAT ORDER U/S 201(1) AND 201(1 A) FOR THE FINANCIAL YEARS 2006-07, 2007-08, 2008-09, 2009-10 & 2010-11 WERE PASSED ON 24.03.2011 'BY THE ACIT(TDS), CHANDIGARH, BUT ISSUE OF TDS ON PRE-PAID SIM CARDS U/S 194H WAS OMITTED TO BE VERIFIED AND AS SUCH NO DEMAND U/S 201(1)/201(1A) OF THE INC OME TAX ACT WAS RAISED ON THIS ISSUE. THEREFORE, IN VIE W OF THESE FACTS, THE ACIT(TDS), CHANDIGARH SUBMITTED THAT THE ORDER PASSED BY HIM IS ERRONEOUS AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE FOR NOT RAISING ANY DEMAND U/S 201(1) & 201 (1 A) OF THE I.T ACT ON ACCOUNT OF NON- DEDUCTION OF TAX AT SOURCE ON COMMISSION PAID ON SA LE OF PREPAID SIM CARDS U/S 194H OF THE I.T. ACT, 1961. IN THE INTEREST OF NATURAL JUSTICE, BEFORE PASSING ANY ORDER AN OPPORTUNITY OF BEING HEARD IS BEING GIVEN TO YOU. SO YOU ARE REQUE STED TO ATTEND THE OFFICE OF WORTHY COMMISSIONER OF INCOME TAX (TDS), CHANDIGARH ON 04. 05.2012 AT 1130AM. 12 PLEASE ENSURE THE COMPLIANCE ON SAID DATE AND TIME. YOURS FAITHFULLY, SD/- {HARBANS KAUR) INCOME TAX OFFICER, HQ (TDS) CHANDIGARH 16. THE FIRST PARA OF THE FINDING OF THE LD. COMMIS SIONER WHICH HAS ALREADY BEEN REPRODUCED IS AGAIN BEING REPRODUCED AT THE CO ST OF REPETITION AS UNDER:- 1. THAT ON EXAMINING AN SCRUTINY OF THE ASSESSMENT RE CORD, I FIND THAT THE ASSESSING OFFICER HAS OMITTED TO HAVE DEALT WITH THE ISSUE OF DISCOUNT/COMMISSION PAID ON PREPAID/RECHARGE VOUCHERS LIABLE FOR TDS US 194H OF THE I.T. ACT. TH IS FACT HAS BEEN ADMITTED BY THE ASSESSING OFFICER HIMSELF WHO PASSED ORDER U/S 201(1)/201(1A) FOR ALL THESE YEARS. THERE FORE, THE ORDERS PASSED BY THE AO ARE ERRONEOUS. SINCE, THE A O HAS NOT DEEMED THE ASSESSEE AN ASSESSEE IN DEFAULT FOR NOT HAVING DEDUCTED TDS ON THE PAYMENTS MADE AS DISCOUNT/COMMI SSION TO THE VENDORS AGAINST PREPAID SIM CARDS/RECHARGE VOUC HERS, DESPITE THE FACT THAT ON THE POSTPAID SIM CARDS THE ASSESSEE HAS BEEN DEDUCTING TAX AT SOURCE 194H AND ALSO HAVING N OT CHARGED THE MANDATORY INTEREST U/S 201(1A) FOR NOT DEDUCTIN G TAX AT SOURCE ON THE DEDUCTIBLE AMOUNT PAID BY WAY OF DISCOUNT/COMMISSION TO THE VENDORS. HENCE, THE ORDE RS PASSED FOR ALL THESE YEARS BY THE AO ARE PREJUDICIAL TO TH E INTEREST OF REVENUE. I AM, THEREFORE, SATISFIED THAT THE PROVIS IONS OF SECTION263 OF I.T. ACT, 1961 ARE ATTRACTED FOR ALL THESE YEARS. 17. IN OUR OPINION IT WOULD BE A CASE OF SPLITTING OF HAIR IF WE TRY TO DISTINGUISH BETWEEN THE EXPRESSION VERIFIED USED IN THE NOTIC E AND DEALT WITH USED IN THE REVISIONARY ORDER. THE BASIC MEANING OF BOTH THE EX PRESSIONS IS SAME AND MEANS THAT ISSUE HAS NOT BEEN EXAMINED BY THE ASSESSING O FFICER. THE LD. COUNSEL HAS ALSO VEHEMENTLY CONTENDED THAT READING OF THE FIRS T PARA OF THE ASSESSMENT ORDER WOULD SHOW THAT THE ASSESSING OFFICER HAS ALREADY E XAMINED THIS ISSUE OF NON DEDUCTION OF TAX U/S 194H. PARA 1 OF THE ORDER PAS SED U/S 201 READS AS UNDER:- A TDS INSPECTION / SURVEY U/S 133A OF THE I.T. ACT , 1961 WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSE E DEDUCTOR ON 17.02.2010. FROM THE DETAILS FURNISH BY THE ASS ESSEE DEDUCTOR COMPANY IT WAS NOTICED THAT PERSON RESPONS IBLE (PR) OF THE ASSESSEE COMPANY HAS NON DEDUCTED TAX A T SOURCE FROM THE PAYMENTS MADE TOWARDS COMMISSION / INCENTI VE ON PRE-PAID CARDS AS REQUIRED U/S 194H OF THE I.T. ACT , 1961. SIMILARLY, PR DID NOT DEDUCTED TAX AT SOURCE FROM T HE 13 ROAMING CHARGES (NATIONAL ROAMING & INTERNATIONAL R OAMING CHARGES). AS REQUIRED U/S 194J OF THE I.T. ACT, 196 1. NO DOUBT IT HAS BEEN MENTIONED THAT IT WAS NOTICED THAT PERS ON RESPONSIBLE OF THE ASSESSEE HAS NOT DEDUCTED THE TAX AT SOURCE FROM TH E PAYMENTS MADE TOWARDS COMMISSION / INCENTIVE ON PREPAID CARDS U/S 194H OF THE ACT. IT IS CLEAR THAT THIS OBSERVATION IS MADE WITH REFERENCE TO THE SURVEY PR OCEEDINGS. FURTHER, THE CAREFUL READING OF THE WHOLE ORDER CLEARLY SHOWS THAT NO QU ESTION HAS BEEN ASKED WITH RESPECT TO NON DEDUCTION OF TAX ON COMMISSION / INC ENTIVE ON PRE PAID CARDS. NO REPLY SEEMS TO HAVE BEEN GIVEN. ASSUMING FOR ARGUM ENTS SAKE, THAT IT IS NOT NECESSARY TO MENTION EVERYTHING IN THE ORDER BUT NO THING HAS BEEN FIELD BEFORE US TO SHOW THAT RELEVANT QUESTION ON THIS ISSUE WAS AS KED BY THE ASSESSING OFFICER AND REPLIED WERE ALSO GIVEN. THEREFORE, IT IS A CLE AR CASE OF NON ENQUIRY IN RESPECT OF THIS ISSUE. THE LD. CIT-DR HAS CORRECTLY SUBMIT TED THAT ASSESSING OFFICER HAS MERELY SET UP A PREAMBLE ON THIS ISSUE IN THE FIRST PARA BUT HAS NOT MADE ANY ENQUIRY IN THIS RESPECT. IN THIS REGARD WE MAY MENT ION THAT MERE NON ENQUIRY WOULD ALSO RENDER A PARTICULAR ORDER PASSED BY LOWE R AUTHORITY AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THIS POSITI ON HAS BEEN CLEARLY CONFIRMED BY HON'BLE SUPREME COURT IN THE CASE OF RAMPYARI DEVI SAROGI VS. CIT & OTHERS 67 ITR 84 (SC) & SMT. TARA DEVI AGGARWAL V CIT 88 ITR 323 (SC). THE REASONING FOR THIS PROPOSITION HAS BEEN EXPLAINED BY HON'BLE DELHI HIGH COURT IN THE CASE OF GEE VEE ENTERPRISES V ADDL. CIT & OTHERS 99 ITR 37 5 (DELHI) IN THE FOLLOWING PARA:- IT IS NOT NECESSARY FOR THE COMMISSIONER TO MAKE F URTHER INQUIRIES BEFORE CANCELLING THE ASSESSMENT ORDER OF THE INCOME-TAX OFFICER. THE COMMISSIONER CAN REGARD THE ORDER AS ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES O F THE CASE THE INCOME-TAX OFFICER SHOULD HAVE MADE FURTHER INQ UIRIES BEFORE ACCEPTING THE STATEMENTS MADE BY THE ASSESSE E IN HIS RETURN. THE REASON IS OBVIOUS. THE POSITION AND FUN CTION OF THE INCOME-TAX OFFICER IS VERY DIFFERENT FROM THAT OF A CIVIL COURT. THE STATEMENTS MADE IN A PLEADING PROVED BY THE MIN IMUM AMOUNT OF EVIDENCE MAY BE ADOPTED BY A CIVIL COURT IN THE ABSENCE OF ANY REBUTTAL. THE CIVIL COURT IS NEUTRAL . IT SIMPLY 14 GIVES DECISION ON THE BASIS OF THE PLEADING AND EVI DENCE WHICH COMES BEFORE IT. THE INCOME-TAX OFFICER IS NOT ONLY AN ADJUDICATOR BUT ALSO AN INVESTIGATOR. HE CANNOT REM AIN PASSIVE IN THE FACE OF A RETURN WHICH IS APPARENTLY IN ORDER BUT CALLS FOR FURTHER INQUIRY. IT IS HIS DUTY TO AS CERTAIN THE TRUTH OF THE FACTS STATED IN THE RETURN WHEN THE CI RCUMSTANCES OF THE CASE ARE SUCH AS TO PROVOKE AN INQUIRY. IT I S BECAUSE IT IS INCUMBENT ON THE INCOME-TAX OFFICER TO FURTHER I NVESTIGATE THE FACTS STATED IN THE RETURN WHEN CIRCUMSTANCES W OULD MAKE SUCH AN INQUIRY PRUDENT THAT THE WORD 'ERRONEOUS' I N SECTION 263 INCLUDES THE FAILURE TO MAKE SUCH AN ENQUIRY. T HE ORDER BECOMES ERRONEOUS BECAUSE SUCH AN INQUIRY HAS NOT B EEN MADE AND NOT BECAUSE THERE IS ANYTHING WRONG WITH THE OR DER IF ALL THE FACTS STATED THEREIN ARE ASSUMED TO BE CORRECT. 18. FURTHER TO THIS IT IS NOTICED THAT THERE IS NO APPEAL RIGHT AVAILABLE TO THE REVENUE FROM THE ORDER OF ASSESSMENT PASSED BY ASSE SSING OFFICER AND I.E. WHY REVISIONARY POWERS HAVE BEEN GIVEN TO THE COMMISSIO NER AND SUCH POWER WERE HELD TO BE OF WIDE AMPLITUDE BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SHREE MANJUNATHESWARE PACKING PRODUCTS AND CAMPHOR WORKS 231 ITR 53 (SC). THEREFORE, NORMALLY WHEN ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY ON A PARTICULAR ISSUE, THEN SUCH ORDER IN VIEW OF THE AB OVE DETAILED DISCUSSION HAS TO BE CONSTRUED AS ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF REVENUE AND THEREFORE, WE HOLD THAT ORDER PASSED U/S 201 IS ERRONEOUS AND PRE JUDICIAL TO THE INTEREST OF REVENUE AS ASSESSING OFFICER HAS FAILED TO MAKE ANY ENQUIRY. 19. THE LAST CONTENTION MADE BY THE LD. COUNSEL WAS THAT IN VIEW OF THE DECISION OF HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V IDEA CELLULAR 125 ITD 222 (HYD), THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEW. WE FIND NO MERIT IN THIS CONTENTION ALSO. NO DOUBT THA T HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES COMPANY LTD V CIT (SUPRA ) HAS HELD THAT IF ASSESSING OFFICER HAS TAKEN A PARTICULAR VIEW WHICH IS LEGALL Y POSSIBLE THEN SUCH ORDER CANNOT BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF REVENUE. HOWEVER, AS WE HAVE SEEN ABOVE, THIS IS A CASE OF N ON-ENQUIRY AND, THEREFORE, IT CANNOT BE SAID THAT ASSESSING OFFICER HAS TAKEN A P ARTICULAR VIEW. 15 20. THE SECOND ASPECT ON THIS ISSUE IS THAT SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY DELHI BENCH OF THE TRIBUNAL IN THE CASE OF IDEA CELLULAR V DCIT 123 ITD 620 AND ACIT V IDEA CELLULAR LTD 125 ITD 22 2 BY HYDERABAD BENCH OF THE TRIBUNAL. IT IS TO BE NOTED THAT FIRST DECISION IN THE CASE OF IDEA CELLULAR LTD VS. DCIT 123 ITD 620 (DELHI) WAS RENDERED ON MARCH, 28, 2008. THIS DECISION WAS REVERSED BY HON'BLE DELHI HIGH COURT ON 19.2.10 10 WHICH WAS REPORTED AT CIT V IDEA CELLULAR LTD 325 ITR 148 (DELHI). THEREFORE, THIS DECISION WAS NO MORE IN EXISTENCE RATHER THE DECISION RENDERED BY HON'BLE D ELHI HIGH COURT WAS AGAINST THE ASSESSEE. THE SECOND DECISION RENDERED BY HYDERABA D BENCH OF THE TRIBUNAL WAS DECIDED ON FEBRUARY, 26, 2009 AND IN THAT DECISION THE HYDERABAD BENCH HAS MAINLY RELIED ON THE DECISION OF DELHI BENCH WHICH ALREADY STANDS REVERSED. FURTHER, THERE WAS ANOTHER DECISION BY THE HON'BLE KERELA HIGH COURT IN ONE OF THE GROUP COMPANY OF ASSESSEE IN CASE OF VODAFONE ESSAR CELLULAR LTD VS. ACIT (TDS) 332 ITR 255 (KER) WHEREIN IT WAS CLEARLY HEL D AS UNDER:- HELD, DISMISSING THE APPEAL, THAT THE SIM CARD WAS WHAT LINKED THE MOBILE SUBSCRIBER TO THE ASSESSEE'S NETW ORK. THEREFORE, SUPPLY OF SIM CARD WAS ONLY FOR THE PURP OSE OF RENDERING CONTINUED SERVICES BY THE ASSESSEE TO THE SUBSCRIBER OF THE MOBILE PHONE. THE POSITION WAS TH E SAME SO FAR AS RECHARGE COUPONS OR E TOPUPS WERE CONCERNED WHICH WAS ONLY AIR TIME CHARGES COLLECTED FROM THE SUBSCR IBERS IN ADVANCE. THERE WAS NO SALE OF ANY GOODS INVOLVED AS CLAIMED BY THE ASSESSEE AND THE ENTIRE CHARGES COLLECTED BY THE ASSESSEE AT THE TIME OF DELIVERY OF SIM CARDS OR RE CHARGE COUPONS WERE ONLY FOR RENDERING SERVICES TO ULTIMAT E SUBSCRIBERS AND THE DISTRIBUTOR WAS ONLY THE MIDDLE MAN ARRANGING CUSTOMERS OR SUBSCRIBERS FOR THE ASSESSEE . THE TERMS OF THE DISTRIBUTION AGREEMENT CLEARLY INDICAT ED THAT IT WAS FOR THE DISTRIBUTOR TO ENROL THE SUBSCRIBERS WI TH PROPER IDENTIFICATION AND DOCUMENTATION WHICH RESPONSIBILI TY WAS ENTRUSTED BY THE ASSESSEE TO THE DISTRIBUTORS UNDER THE AGREEMENT. THE DISTRI BUTOR DIRECTLY OR INDIRECTLY GOT CUSTOMERS FOR THE ASSESSEE AND SIM CARDS WERE ONLY USED FOR GIVING CONNECTION TO THE CUSTOMERS PROCURED BY THE DISTRIBUTOR FOR THE ASSESSEE. THE ASSESSEE WAS ACCO UNTABLE TO THE SUBSCRIBERS FOR FAILURE TO RENDER PROMPT SERVIC ES PURSUANT TO CONNECTIONS GIVEN BY THE DISTRIBUTOR FOR THE ASS ESSEE. 16 THEREFORE, THE DISTRIBUTOR ACTED ON BEHALF OF THE A SSESSEE FOR PROCURING AND RETAINING CUSTOMERS AND, THEREFORE, T HE DISCOUNT GIVEN WAS COMMISSION WITHIN THE MEANING OF EXPLANATION (I) ON WHICH TAX WAS DEDUCTIBLE UNDER SECTION 194H. THEREFORE , CLEARLY THERE WERE TWO DECISIONS AGAINST THE ASSESS EE BY TWO DIFFERENT HIGH COURTS, AND THEN IT WAS NOT POSSIBLE TO RELY O N HYDERABAD BENCH DECISION TO STATE THAT THIS IS LEGALLY POSSIBLE VIEW. IN THIS V IEW OF THE MATER, WE FIND NO MERIT IN THIS CONTENTION ALSO AND THE SAME IS REJECTED. 21. IN VIEW OF THE ABOVE DISCUSSION, WE UPHOLD THE REVISIONARY ORDER PASSED U/S 263 BY LD. COMMISSIONER, 22. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISS ED. 23. ITA NO. 611 TO 614/CHD/2013:- IN ALL THESE APPEALS THE ISSUES WHICH HAVE BEEN RAISED ARE IDENTICAL TO THE ISSUES RAISED IN A SSESSMENT YEAR 2006-07 IN ITA NO. 610/CHD/2013 WHICH WE HAVE ADJUDICATED ABOVE. T HEREFORE, FOLLOWING THE ABOVE DECISION, ALL THESE APPEALS ALSO STANDS DISMI SSED. 24. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/08/2015 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 6 TH AUGUST, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR FIT FOR PUBLICATION SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD ) JUDICIAL MEMBER ACCOUNTANT MEMBER 17