M/s Bharti Airtel Limited, Indore V. The ITO (TDS) -1, Indore

MA 136/IND/2012

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1441 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 10-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Additional evidence; Question of law; Non-deduction of tax
• Section: 201(1)

Judgement Text

PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAACB2894G M.A.NO. 136/ IND /2012 (ARISING OUT OF I.T.A.NO. 188/IND/2012) A.Y. : 2009-10 M/S. BHARTI AIRTEL LIMITED, INDORE. VS. INCOME - TAX OFFICER, APP LICANT RESPONDENT APP LICANT BY : SHRI ANIL BHALLA, C. A. RESPONDENT BY : SHRI R.A.VERMA, SR. DR DATE OF HEARING : 20 . 1 2 .201 3 DATE OF PRONOUNCEMENT : 28 . 01 .201 4 O R D E R PER JOGINDER SINGH, J.M. THIS MISCELLANEOUS APPLICATION U/S 254(2) OF THE INCOME TAX ACT 1961- READ WITH RULE 24 OF INCOME TAX APPELLATE TRIBUNAL RULES AROSE OUT OF THE ORDER OF TRIBUNAL DATED 10.09.2012 IN ITA NO.188/IND/2012 FOR ASSESSMENT YEAR 2009-10 IN M/S.BHARTI AIRTEL LIMITED, INDORE. M.A.NO.136/IND/2012 A.Y. 2009-10 2 PAGE 2 OF 8 THE CASE OF M/S. BHARTI AIRTEL LIMITED. 2. IT WAS ARGUED BY THE LD. AUTHORIZED REPRESENTATIVE THAT THERE ARE SOME APPARENT MISTAKE IN THE ORDER O F TRIBUNAL WITH REGARD TO DISPOSAL OF SOME OF THE GROUNDS TAKE N IN THE APPEALS, WHICH ARE NOT COVERED AGAINST THE ASSESSEE AND FOR WHICH NO APPEAL HAS BEEN FURTHER FILED BEFORE THE H ON'BLE SUPREME COURT. HE INVITED OUR ATTENTION TO THE ORDE R OF THE HON'BLE HIGH COURT IN ASSESSEES OWN CASE, WHEREIN GROUND NO. 3 WAS RESTORED BACK TO THE ASSESSING OFFICER FO R VERIFICATION AND DECIDING AS PER LAW. 3. ON THE OTHER HAND, THE LD. SENIOR DR CONTENDED THAT THERE IS NO MISTAKE APPARENT IN THE ORDER OF TRIBUN AL, THEREFORE, APPLICATION FILED U/S 254(2) IS NOT MAIN TAINABLE. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE MISC. PETITION AS WELL AS ORDER OF THE TRIBUNAL AND THE ENTIRE MATERIAL PLACED ON RECORD. WE FOUND THAT FOLLOWING FOUR GROUNDS WERE RAISED BEFORE THE TRIBUNAL IN THE APPEAL FILED BY THE ASSESSEE IN I.T.A.NO. 188/I ND/2012. 1. THE LEARNED INCOME TAX OFFICER (TDS) ['AO'] M/S.BHARTI AIRTEL LIMITED, INDORE. M.A.NO.136/IND/2012 A.Y. 2009-10 3 PAGE 3 OF 8 HAS ERRED BOTH ON FACTS AND IN LAW IN APPLYING THE PROVISIONS OF SECTION 194H OF THE INCOME TAX ACT TO THE TRANSACTION OF SUPPLY OF PRE-PAID VOUCHERS TO DISTRIBUTORS. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE LEARNED AO. 1.1) THE LEARNED AO HAS ERRED BOTH ON FACTS AND IN LAW IN TREATING THE BUSINESS RELATIONSHIP BETWEEN THE COMPANY AND THE DISTRIBUTOR AS PRINCIPAL TO AGENT AS AGAINST THE ACTUAL RELATIONSHIP OF PRINCIPAL TO PRINCIPAL. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE LEARNED AO. 1.2 THE LEARNED A.O. HAS ERRED BOTH ON FACTS ARID IN M/S.BHARTI AIRTEL LIMITED, INDORE. M.A.NO.136/IND/2012 A.Y. 2009-10 4 PAGE 4 OF 8 LAW IN PASSING AN ORDER U/S 201(1) AND HOLDING THE ASSESSEE COMPANY TO BE IN DEFAULT IN RESPECT OF NON-DEDUCTION OF TAX AMOUNTING TO RS. 6,44,76,343/- U/S 194H OF THE INCOME TAX ACT, 1961 ON THE DEFERENCE BETWEEN THE PRICE AT WHICH THE PREPAID CARD IS SOLD TO THE DISTRIBUTOR AND THE PRICE AT WHICH THE END CUSTOMER BUYS ALLEGING THE DIFFERENCE TO BE PAYMENT OF COMMISSION. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE LEARNED ASSESSING OFFICER. 2. THE LEARNED APPELLANT IS AGGRIEVED BY THE ORDER OF THE REVENUE TO RECOVER THE TAX OF RS.6,44,76,343/- INSPITE OF THE FACT THAT SUCH TAX HAVE BEEN PAID BY THE DISTRIBUTOR ON THE CORRESPONDING INCOME DECLARED BY HIM. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) M/S.BHARTI AIRTEL LIMITED, INDORE. M.A.NO.136/IND/2012 A.Y. 2009-10 5 PAGE 5 OF 8 HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE ADDITIONAL EVIDENCES SUBMITTED BY APPELLANT EVIDENCING PAYMENT OF TAXES MADE BY DISTRIBUTORS. 4. THE LEARNED AO HAS ERRED BOTH ON FACTS AND IN LAW IN CHARGING INTEREST OF RS.1,14,68,247/- U/ S 201(1A) OF THE ACT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE LEARNED ASSESSING OFFICER. 5. DURING THE COURSE OF HEARING BEFORE US, AN APPLICAT ION WAS FILED U/S 158A, ACCORDING TO WHICH ON ASSESSEE S APPEAL SUBSTANTIAL QUESTION OF LAW WAS ACCEPTED BY HON'BLE COURT IN RESPECT OF APPLICABILITY OF PROVISIONS OF SECTION 1 94H ON THE TRANSACTIONS OF SUPPLY OF PRE PAID VOUCHERS TO DIST RIBUTORS. THIS ISSUE WAS DECIDED BY HON'BLE HIGH COURT AGAINS T THE ASSESSEE AND FOR WHICH FURTHER APPEAL WAS SOUGHT BY THE ASSESSEE. SINCE THE APPLICATION U/S 158A WAS FILED BEFORE US ON THE PLEA OF QUESTION OF LAW BY CLAIMING THAT QUE STION OF LAW M/S.BHARTI AIRTEL LIMITED, INDORE. M.A.NO.136/IND/2012 A.Y. 2009-10 6 PAGE 6 OF 8 IS IDENTICAL ARISING IN THE CASE OF BHARTI AIRTEL L IMITED FOR THE IMPUGNED ASSESSMENT YEAR 2009-10, WHICH IS PENDING BEFORE THIS TRIBUNAL WITH AN UNDERSTANDING AS CONTAINED IN PARA 3 OF DECLARATION MADE U/S 158A(1) OF THE ACT. SINCE THE ISSUE WAS PENDING BEFORE THE HON'BLE HIGH COURT/SUPREME COURT , WE ACCEPTED THE DECLARATION OF THE ASSESSEE MADE U/S 1 58A(1) TO AVOID REPETITIVE APPEALS IN THE CASE OF THE ASSESSE E. 6. WITH REGARD TO GROUND NO.2, WE FOUND THAT HON'BLE KOLKATA HIGH COURT IN ASSESSEES OWN CASE VIDE ORDE R DATED 19.5.2011 AT PAGE 22 & 23 OBSERVED AS UNDER :- HOWEVER, WE DIRECT THE ASSESSING OFFICER TO EXAMINE WHETHER ALL THE FRANCHISEES WHOSE INCOME TAX HAS NOT BEEN DEDUCTED AT SOURCE BY THE ASSESSEE HAS ALREADY BEEN ASSESSED ENTIRE TAX PAYABLE IS RECOVERED IN REGULAR BASIS OR NOT. IF IT IS NOT BY THIS TIME THEN THIS ACTION WILL BE TAKEN, AND IF IT IS ALREADY REALIZED AND RECOVERED THEN THE PRINCIPAL AMOUNT OF TAXES TO THE EXTENT OF DEDUCTABLE AT SOURCE SHALL NOT BE M/S.BHARTI AIRTEL LIMITED, INDORE. M.A.NO.136/IND/2012 A.Y. 2009-10 7 PAGE 7 OF 8 RECOVERED FROM THIS ASSESSEE, HOWEVER, INTEREST PAYABLE UNDER THE LAW HAS TO BE LEVIED. THUS, THE APPEAL IS DISPOSED OF. 7. IT IS CLEAR FROM THE ABOVE ORDER OF HON'BLE COURT T HAT MATTER WAS RESTORED TO THE ASSESSING OFFICER TO EXA MINE WHETHER ALL THE FRANCHISEES WHOSE INCOME TAX HAS NO T BEEN DEDUCTED AT SOURCE BY THE ASSESSEE HAS ALREADY BEEN ASSESSED, ENTIRE TAX PAYABLE IS RECOVERED IN REGULAR BASIS OR NOT. IF IT IS NOT BY THIS TIME, THEN THIS ACTION WILL BE TAKE AND IF IT IS ALREADY REALIZED AND RECOVERED, THEN THE PRINCIPAL AMOUNT OF TAX TO THE EXTENT OF DEDUCTIBLE AT SOURCE SHALL NOT BE RECOVERED FROM THIS ASSESSEE, HOWEVER, INTEREST PAYABLE UNDER THE LAW HAS TO BE LEVIED. IN VIEW OF THESE FINDINGS, GROUN D NO.2 AS RAISED BY THE ASSESSEE ARE RESTORED TO THE FILE OF ASSESSING OFFICER FOR EXAMINING THE PAYMENT OF TAX BY THE REC IPIENT OF INCOME AND TO DECIDE THE ISSUE ACCORDINGLY. 8. HOWEVER, WHILE DISPOSING ASSESSEES APPEAL IN TERMS OF APPLICATION FILED U/S 158A, A MISTAKE HAS CREPT IN THE ORDER IN AS MUCH AS ALL THE GROUNDS OF APPEAL INCLUDING THE GROUND M/S.BHARTI AIRTEL LIMITED, INDORE. M.A.NO.136/IND/2012 A.Y. 2009-10 8 PAGE 8 OF 8 NO.2 HAS BEEN DISPOSED OF PURSUANT TO, SECTION 158A (1) WHICH WAS NOT IN ACCORDANCE WITH THE APPLICATION OF THE A SSESSEE COMPANY. WE ACCORDINGLY RECTIFY THE APPARENT MISTAK E IN THE ORDER AND RESPECTFULLY FOLLOWING THE VERDICT OF HON 'BLE COURT RESTORE GROUND NO.2 TO THE FILE OF ASSESSING OFFICE R FOR DECIDING AFRESH AS PER DIRECTIONS OF HON'BLE HIGH COURT AS S TATED ABOVE. ACCORDINGLY, GROUND NO.2 AS RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES BY FOLLOWING THE DECISION OF HON'BLE HIGH COURT IN ASSESSEES OWN CASE AS DISCUSSED ABOV E. 9. IN THE RESULT, THE MISC. APPLICATION FILED BY THE ASSESSEE IS ALLOWED IN PART IN TERMS INDICATED HERE INABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY, 2014. SD/- SD/- (R. C. SHARMA) (JOGINDER SINGH) ACCOUNTANT M EMBER JUDICIAL MEMBER DATED : 28 TH JANUARY, 2014. CPU* 20.12.26.12.28.1