PR COMMISSIONER OF INCOME TAX DELHI 1 vs. MS BHARAT SANCHAR NIGAM LTD

PDF · subscribers
ITA/295/2026HC DelhiDLHC01132225202409 April 2026Author: HON'BLE MR. JUSTICE VINOD KUMAR,HON'BLE MR. JUSTICE DINESH MEHTA3 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court held that both issues raised in the appeal stood decided against the appellant (revenue). The Court noted that the first question concerning Section 194H had been decided by a Coordinate Bench in ITA 604/2018 vide order dated April 15, 2024. The second question regarding International Usage Charges was also decided against the department in the same appeal (ITA 604/2018) by an order dated September 23, 2024. Based on these previous decisions, the Court concluded that the present appeal also fails. No specific reasoning from the ITAT's order was detailed, but the High Court relied on its own prior judgments.

What were the facts?

The appeal was filed by the Pr. Commissioner of Income Tax, Delhi 1 (appellant/revenue) against an order of the Income Tax Appellate Tribunal (ITAT), Bench D, New Delhi, dated February 20, 2023. The appeal pertains to assessment year 2008-09. The revenue sought condonation of delay in filing the appeal, which was granted. The appeal challenged the ITAT's decision on two specific questions of law. The revenue's counsel conceded that similar appeals for assessment years 2007-08 and 2009-10 had been rejected by the High Court.

What were the issues?

1. Whether the ITAT erred in holding that the relationship between the assessee (M/s Bharat Sanchar Nigam Ltd.) and its distributors is principal-to-principal, thus exempting discounts on SIM cards and vouchers from the purview of Section 194H of the Income Tax Act, 1961. 2. Whether the ITAT erred in deleting the addition made on account of disallowance of International Usage Charges (IUC), despite the assessee allegedly satisfying the criteria for deducting TDS under Section 195(1) as per Chapter XVIIB. Assessee's Arguments: The judgment does not record specific arguments made by the assessee. The ITAT's order, as challenged by the revenue, held the relationship to be principal-to-principal and deleted the addition on IUC. Revenue's Arguments: The revenue argued that Section 194H should apply to discounts given to distributors and that the assessee did not satisfy the criteria for deducting TDS under Section 195(1) for International Usage Charges.

Which sections of the Income-tax Act were involved?

Section 194H,Section 195(1)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~68 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 295/2026 PR COMMISSIONER OF INCOME TAX DELHI 1 .....Appellant Through: Mr. Vipul Agarwal, SSC with Ms. Sakshi Shainwal & Mrs. Harshita Kotru, JSCs. versus MS BHARAT SANCHAR NIGAM LTD .....Respondent Through: Mr. Manuj Sabharwal, Mr. Drona Negi, Advocates. CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE VINOD KUMAR

O R D E R %

09.04.

2026 CM APPL. 22818/2026 (delay in filing)

1.

Instant application filed under Section 151 of the Civil Procedure Code, 1908 seeks condonation of delay of 516 days in filing the appeal.

2.

For the reasons stated in the application, the delay of 516 days in filing the appeal is condoned.

3.

Application stands allowed. CM APPL. 22819/2026 (delay in re-filing)

4.

Instant application has been filed under Section 151 of the Civil Procedure Code, 1908 seeking condonation of delay of 475 days in re-filing the appeal. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/04/2026 at 11:58:40

5.

For the reasons stated in the application, the delay of 475 days in re- filing the appeal is condoned.

6.

Application stands allowed. ITA 295/2026

7.

The instant appeal preferred against the order of the Income Tax Appellate Tribunal, Bench D, New Delhi (hereinafter referred to as ‘Tribunal’) dated 20.02.2023 passed in ITA no. 1989/Del/2017 which relates to assessment year 2008-09. 8. Mr. Vipul Agarwal, learned Senior Standing Counsel, fairly submits that similar appeals were filed by the appellant against the order of the Income Tax Appellate Tribunal qua assessment year 2007-08 and 2009-10 and both of them have been rejected by this Court.

9.

The questions of law that are involved in the present appeal are as under: (i) Whether the Ld. ITAT has erred on the facts and circumstances of the case and question of law in holding that the nature of relationship between the assessee and the distributors is that of principal and principal and therefore, provisions of Section 194H of the IT Act, 1961 does not apply in the case of the assessee company, on the discounts given to its distributors/franchisee on the value of SIM cards and Vouchers? (ii) Whether the Ld. ITAT has erred on the facts and circumstances of the case and question of law in deleting the addition made on account of disallowance of International Usage Charges (IUC) ignoring the fact that the assessee satisfies all the key criteria to deduct TDS u/s 195(1) as per Chapter XVIIB of the Act? This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/04/2026 at 11:58:40

10.

Mr. Vipul Agarwal, learned Senior Standing Counsel, fairly submits that so far as first question (re: Section 194H) is concerned, the same has been decided by Coordinate Bench of this Court vide its order dated 15.04.2024 passed in ITA 604/2018, while the second question has been decided against the department vide order dated 23.09.2024 in ITA 604/2018. 11. Having heard learned counsel for the appellant and after going through the above referred orders dated 15.04.2024 and 23.09.2024, we are of the view that both the issues stand decided against the appellant.

12.

The appeal, therefore, fails. DINESH MEHTA, J. VINOD KUMAR, J. APRIL 9, 2026/nk This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/04/2026 at 11:58:40

More judgments on Section 194H

All 1,314 judgments and leading authorities on Section 194H →

Recent GST High Court judgments

Search GST case law →