THE COMMISSIONER OF INCOME T vs. M/S.DISHNET WIRELESS LIMITED,

PDF · subscribers
TCA/829/2016HC Madras07 August 2020Bench: THE HON'BLE DR.JUSTICE VINEET KOTHARI4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. The learned Senior Standing Counsel for the Revenue brought to the notice of the Court a Circular No. 17/2019 dated 8th August 2019 issued by the Central Board of Direct Taxes (CBDT). This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court in cases where the tax effect does not exceed Rs. 1,00,00,000/- (Rupees One Crore). In the instant cases, the tax effect was stated to be less than this monetary limit. Consequently, the appeals filed by the Revenue were dismissed as withdrawn. The Court explicitly stated that the substantial questions of law were kept open for determination in appropriate cases. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed these five Tax Case Appeals (TCA Nos. 829, 830, 834, 835 & 837 of 2016) against the order of the Income Tax Appellate Tribunal (ITAT), 'D' Bench, dated 20.07.2015. The appeals pertain to Assessment Years 2008-09, 2007-08, 2007-08, 2008-09, and 2010-11. The core dispute revolves around the assessee, M/s. Dishnet Wireless Limited, and whether it was obligated to deduct tax at source under Section 194J of the Income Tax Act, 1961, while paying roaming charges to telecom operators. The ITAT had ruled in favor of the assessee, holding that such payments did not constitute fees for technical services.

What were the issues?

The Tribunal was required to decide the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that proceedings under Section 201(1) and 201(1A) cannot be sustained on the ground that tax need not be deducted at source under Section 194J by the assessee while paying roaming charges to telecom operators, as such charges are not a fee for technical services since no human intervention is required for providing the connection while roaming. 2. Alternatively, whether the Tribunal, having held that human intervention is necessary for the maintenance of the telecom system providing roaming facilities, was right in concluding that such human intervention is not sufficient to treat the payment as a fee for technical services mandating deduction of tax at source under Section 194J. The Revenue contended that the payments for roaming charges were fees for technical services, necessitating TDS under Section 194J. The assessee argued that no human intervention was required for providing roaming connections, thus it was not a fee for technical services. The judgment does not explicitly record arguments from either side beyond the framing of the questions and the Revenue's subsequent action.

Which sections of the Income-tax Act were involved?

Section 194J,Section 201(1),Section 201(1A)

AI-generated summary — verify with the full judgment below

Order dt 7.8.2020 in TCA 829, 830, 834, 835 & 837/2016 CIT v . Dishnet WIreless Ltd. 1 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 7.8.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY T.C.A.No

s . 829, 830, 834, 835 & 837 of 2016

Commissioner of Income Tax, Chennai Appellant vs. M/s.Dishnet Wireless Limited, Specer Plaza, 5th Floor, 769, Anna Salai, Chennai 600 002 PAN: AAACD5767E Respondent Prayer :: - Appeals filed against the order of the Income Tax Appellate Tribunal, Madras 'D' Bench, dated 20.07.2015 in ITA No.321, 320, 325, 326 and 328/Mds/2014. For appellant : Mr. Karthik Ranganathan, Sr.Standing Counsel For respondent : Mr.Vishnu Mohan http://www.judis.nic.in Order dt 7.8.2020 in TCA 829, 830, 834, 835 & 837/2016 CIT v . Dishnet WIreless Ltd. 2 COMMON

ORDER

(Made by Dr.Vineet Kothari,J) The Court was held by Video Conference, as per the Resolution of the Full Court dated 3 July 2020, by Judges at their respective residences and the counsel, staff of the Court appearing from their respective residences. 2. These Tax Case Appeals have been filed by the Revenue, calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, 'D' Bench, dated 20.07.2015 in ITA No.321, 320, 325, 326 and 328/Mds/2014, for the Assessment Years 2008-09, 2007-08, 2007-08, 2008-09 and 2010-11, by raising the following substantial questions of law: "(i) Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the proceeding under section 201(1) and 201(1A) cannot be sustained on the ground that the tax need not be deducted at source u/s . 194J by the assessee while paying roaming charges to the telecom operators since roaming charges paid by the assessee is not a fee for technical services as no human intervention is required for providing the connection while roaming? (ii) Alternatively, whether the Tribunal having held that the human intervention is necessary for maintenance of the telecom system that provides roaming facility, is the Tribunal right in concluding that such human intervention is not http://www.judis.nic.in Order dt 7.8.2020 in TCA 829, 830, 834, 835 & 837/2016 CIT v . Dishnet WIreless Ltd. 3 sufficient to treat the payment as fee for technical services mandating deduction of tax at source u/s 194J?" 3. When the matters are taken up for hearing, learned Senior Standing Counsel brought to our notice the instruction issued by the Central Board of Direct Taxes vide Circular No.17/2019 dated 8th August 2019, wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). 4.In the instant cases, the tax effect is said to be less than the monetary limit imposed and therefore, the Appeals filed by the Revenue are dismissed, as withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. (V.K.J.) (K.R.,J.) 7.8.2020 ssk. Index:Yes/No Internet:Yes/No http://www.judis.nic.in Order dt 7.8.2020 in TCA 829, 830, 834, 835 & 837/2016 CIT v . Dishnet WIreless Ltd. 4 Dr.VINEET KOTHARI, J. and KRISHNAN RAMASAMY, J. ssk. T.C.A.No

s . 829, 830, 834,

835 & 837 of 2016 7.8.2020 http://www.judis.nic.in

More judgments on Section 194J

All 1,434 judgments and leading authorities on Section 194J →

Recent GST High Court judgments

Search GST case law →