VODAFONE SOUTH LTD V. THE CIT TDS CHANDIGARH

ITA/3/2016

AI Insights

The case involves Vodafone South Limited appealing against the orders of the CIT(A) and ITAT, which upheld the liability to deduct TDS under Section 194-H of the Income Tax Act on certain payments. The High Court of Punjab and Haryana, referencing a Supreme Court judgment, found that such deductions were not required under the specific circumstances of the case, leading to the setting aside of the lower authorities' decisions and restoration of the AO's orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 746076 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 12-09-2024
• Assessment Year: misc
• Other Referred Cases: Bharti Cellular Limited (Now Bharti Airtel Limited) Vs. Assistant Commissioner of Income Tax, Circle 57, Kolkata and another
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: YOGESH PUTNEY; VAIBHAV GUPTA
• Assessee Lawyers: SACHIN JOLLY; ROHIT SUD
• Keywords: Appeal; Assessment Year; CIT(A); Income Tax; ITAT; TDS
• Section: 263; 194-H

Judgement Text

" ITA-3 of 2016 and other connected cases 262 IN THE HIGH COURT OF PUNJAB AND HARYANA AT Vodafone South Limited The CIT (TDS), Chandigarh Vodafone South Limited The CIT (TDS), Chandigarh Vodafone South Limited The CIT (TDS), Chandigarh Vodafone South Limited The CIT (TDS), Chandigarh Vodafone South Limited The CIT (TDS), Chandigarh CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE 3 of 2016 and other connected cases Page 1 of 4 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Vodafone South Limited Vs. The CIT (TDS), Chandigarh Vodafone South Limited Vs. The CIT (TDS), Chandigarh Vodafone South Limited Vs. The CIT (TDS), Chandigarh Vodafone South Limited Vs. The CIT (TDS), Chandigarh Vodafone South Limited Vs. The CIT (TDS), Chandigarh **** HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA-3-2016(O&M) . . . . Appellant . . . . Respondent ITA-12-2016(O&M) . . . . Appellant . . . . Respondent ITA-13-2016(O&M) . . . . Appellant . . . . Respondent ITA-20-2016(O&M) . . . . Appellant . . . . Respondent ITA-21-2016(O&M) . . . . Appellant . . . . Respondent Date of Decision: 12.09.2024 HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA SANJAY VASHISTH (O&M) Appellant . . . . Respondent (O&M) Appellant . . . . Respondent (O&M) Appellant . . . . Respondent M) Appellant . . . . Respondent (O&M) Appellant . . . . Respondent .2024 RASHMI 2024.09.16 19:08 I attest to the accuracy and integrity of this document ITA-3 of 2016 and other connected cases Present: Mr Mr. Sachin Jolly, Advocate ( For the appellant(s). Mr. Yogesh Putney, Sr. Standing counsel with Mr. Vaibhav Gupta, Standing Counsel For the Income Tax Department. SANJEEV PRAKASH SHARMA, J.(Oral) 1. By way of this common order, the aforesaid appeal decided. 2. The 2010-11, 2007 CIT (A) under Section 263 of the Income Tax Act and the order passed by the Income Tax Appellate Tribunal, Chandigarh (for sho upholding the order of CIT(A). 3. Learned counsel judgment of Hon’ble Supreme Court, Airtel Limited) Vs. Assistant Commissioner of Income Tax, Circle 57, Kolkata and another’ that the orders passed by the dated 24.03.2011 liable to deduct TDS under Section 3 of 2016 and other connected cases Page 2 of 4 **** Mr. Rohit Sud, Advocate and Mr. Sachin Jolly, Advocate (through video conferencing) For the appellant(s). Mr. Yogesh Putney, Sr. Standing counsel with Mr. Vaibhav Gupta, Standing Counsel For the Income Tax Department. **** SANJEEV PRAKASH SHARMA, J.(Oral) By way of this common order, the aforesaid appeal The assesse(s) are in appeal for the assessment year 2009 11, 2007-08, 2008-09, 2006-07, challenging the order passed by the CIT (A) under Section 263 of the Income Tax Act and the order passed by the Income Tax Appellate Tribunal, Chandigarh (for sho upholding the order of CIT(A). Learned counsel for the appellant(s) have relied upon the judgment of Hon’ble Supreme Court, ‘ Bharti Cellular Limited (Now Bharti Airtel Limited) Vs. Assistant Commissioner of Income Tax, Circle 57, ta and another’ passed in Civil Appeal No. 7257 that the orders passed by the Authorities setting aside the assessment order dated 24.03.2011(A-3) cannot be said to be erroneous, liable to deduct TDS under Section 194-H of the Income Tax Act as he through video conferencing) Mr. Yogesh Putney, Sr. Standing counsel with Mr. Vaibhav Gupta, Standing Counsel For the Income Tax Department. SANJEEV PRAKASH SHARMA, J.(Oral) By way of this common order, the aforesaid appeals are being n appeal for the assessment year 2009-10, 07, challenging the order passed by the CIT (A) under Section 263 of the Income Tax Act and the order passed by the Income Tax Appellate Tribunal, Chandigarh (for short, ‘the ITAT’) for the appellant(s) have relied upon the ‘ Bharti Cellular Limited (Now Bharti Airtel Limited) Vs. Assistant Commissioner of Income Tax, Circle 57, in Civil Appeal No. 7257-2011, and submits setting aside the assessment order cannot be said to be erroneous, the appellants are not H of the Income Tax Act as held by are being 10, 07, challenging the order passed by the CIT (A) under Section 263 of the Income Tax Act and the order passed by rt, ‘the ITAT’) for the appellant(s) have relied upon the ‘ Bharti Cellular Limited (Now Bharti Airtel Limited) Vs. Assistant Commissioner of Income Tax, Circle 57, submits setting aside the assessment order the appellants are not ld by RASHMI 2024.09.16 19:08 I attest to the accuracy and integrity of this document ITA-3 of 2016 and other connected cases the Hon’ble Supreme Court order dated 13.03.2013 and the ITAT is liable to be set aside. The relevant extract of as under: 4. In view of the above, we find that the view taken by the Tribunal holding that TDS was required to be deducted under Section 194 Income Tax Act and not sustainable. 3 of 2016 and other connected cases Page 3 of 4 the Hon’ble Supreme Court and therefore, the view taken by the CIT(A) in its order dated 13.03.2013 and the ITAT is liable to be set aside. The relevant extract of Bharti Cellular Limited (supra), “42. In view of the aforesaid discussion, we hold that the assessees would not be under a legal obligation to deduct tax at source on the income/profit component in the payments received by the distributors/franchisees from the third parties/customers, or pre-paid coupons or starter Section 194-H of the Act is not applicable to the facts and circumstances of this case. Accordingly, the appeals filed by the assessee-cellular mobile service providers, challenging the judgments of the High Courts of Delhi and Calcutta are allowed and these judgments are set aside. The appeals filed by the Revenue challenging the judgments of High Courts of Rajashtan, Karnataka and Bombay are dismissed. There would be no cost. Pending Applications, if any, shall stand disposed of.” In view of the above, we find that the view taken by the Tribunal holding that TDS was required to be deducted under Section 194 Income Tax Act and on the said count setting aside the order of the AO not sustainable. fore, the view taken by the CIT(A) in its order dated 13.03.2013 and the ITAT is liable to be set aside. Bharti Cellular Limited (supra), reads In view of the aforesaid discussion, we hold that the assessees would not be under a legal obligation to deduct tax at source on the income/profit component in the payments received by the distributors/franchisees from the third parties/customers, or while selling/transferring the paid coupons or starter-kits to the distributors. H of the Act is not applicable to the facts and circumstances of this case. Accordingly, the appeals filed cellular mobile service providers, challenging the judgments of the High Courts of Delhi and Calcutta are allowed and these judgments are set The appeals filed by the Revenue challenging the judgments of High Courts of Rajashtan, Karnataka and Bombay are dismissed. There would be no orders as to cost. Pending Applications, if any, shall stand disposed In view of the above, we find that the view taken by the Tribunal holding that TDS was required to be deducted under Section 194-H of the etting aside the order of the AO, is fore, the view taken by the CIT(A) in its reads In view of the aforesaid discussion, we hold that the assessees would not be under a legal obligation to deduct tax at source on the income/profit component in the payments received by the distributors/franchisees from the while selling/transferring the kits to the distributors. H of the Act is not applicable to the facts and circumstances of this case. Accordingly, the appeals filed cellular mobile service providers, challenging the judgments of the High Courts of Delhi and Calcutta are allowed and these judgments are set The appeals filed by the Revenue challenging the judgments of High Courts of Rajashtan, Karnataka and orders as to cost. Pending Applications, if any, shall stand disposed In view of the above, we find that the view taken by the Tribunal H of the is RASHMI 2024.09.16 19:08 I attest to the accuracy and integrity of this document ITA-3 of 2016 and other connected cases 5. Accordingly, the appeals are allowed for the Assessment years as mentioned herein above and the orders passed by the ITAT as well as the CIT(A) are set aside and the orders passed by the AO are res 6. Pending miscellaneous application(s), if any, shall stand disposed of accordingly. September 12 Rashmi 1. Whether speaking/reasoned? 2. Whether reportable? 3 of 2016 and other connected cases Page 4 of 4 Accordingly, the appeals are allowed for the Assessment years as mentioned herein above and the orders passed by the ITAT as well as the CIT(A) are set aside and the orders passed by the AO are res Pending miscellaneous application(s), if any, shall stand disposed of accordingly. (SANJEEV PRAKASH SHARMA 2, 2024 1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No Accordingly, the appeals are allowed for the Assessment years as mentioned herein above and the orders passed by the ITAT as well as the CIT(A) are set aside and the orders passed by the AO are restored. Pending miscellaneous application(s), if any, shall stand SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE Yes/No Yes/No Accordingly, the appeals are allowed for the Assessment years as mentioned herein above and the orders passed by the ITAT as well as the Pending miscellaneous application(s), if any, shall stand RASHMI 2024.09.16 19:08 I attest to the accuracy and integrity of this document "