DCIT (TDS) - 2(3), MUMBAI vs. VODAFONE INDIA LTD. (FORMERLY KNOWN AS VODAFONE ESSAR LTD.), MUMBAI

The appellant craves leave to amend or alter any ground or add a new ground which may be necessary at the time of hearing of the case or thereafter.

Even though the issues raised in this appeal are admittedly covered by the decision of coordinate bench dated 28thFebruary 2019, in assessee’s own cases in & 2196/Ahd/2016for the assessment years2008-09 and 2009-10. We however see no reasons to take any view of the matter then the view taken by the coordinate bench in the aforesaid decision wherein the coordinate bench has inter alia observed as follows:- 7. Heard the Learned representative of the respective parties, perused the relevant materials available on record. We find from different judgments placed before us that the issue involved in the matter as to whether roaming services require any human intervention and thereby payment of roaming charges whether falls under the ambit and purview of TDS provisions u/s 194J of the Act has been held in favour of the assessee holding that there is no manual or human intervention involved in the process of interconnection charges. In fact it is common knowledge that when one of the subscribers in the assessee‟s circle travels to the jurisdiction of another circle, the calls get connected automatically without any human intervention and it is for this, the roaming charges is paid by the assessee to the visiting operator for providing this service. The interconnection charges paid by the appellant to other telecom operators are therefore, not in the nature of fees for technical services and therefore there is no liability to deduct tax thereon. The judgment passed by the Mysore Bench relied upon the order passed by the Jurisdictional Karnataka High Court in the matter of CIT-vs-Vodafone South Ltd. reported in 290 CTR 436 (Kar) held that the process involved in the roaming connectivity does not involve the human intervention and thus the services do not fall within the ambit of “technical services”. Therefore, the assessee was not required to deduct tax at source on such payment. The operative portion whereof is as follows: “13. After hearing the ld standing counsel for the Revenue and perusing material on record, we find that the issue in this present appeals is covered against the Revenue by the decision of Jurisdictional High Court in the case of CIT vs. Vodafone South Ltd., vide 290 CTR 436 (Kar) wherein the Hon‟ble High Court after referring to the technical expertise of C-Dot on 29/09.2010 in respect of IUC Ltd., and the technical experts reexamined the matter and opined that the roaming services does not require any human intervention and it operates automatically, wherein at paras 7 to 12 of the order it is held as under: “We have heard Mr. K.V. Aravind, learned counsel appearing for the appellants - Revenue in all the appeals. The learned Counsel relied two decisions of the & 6160/Mum/2018 Assessment Year: 2008-09 & 2009-10 Page 3 of 9 Apex Court for canvassing the contention that the roaming charges paid by the assesseeto the other service provider can be said as 'technical services'; one was the decision of the Apex Court in the case of Commissioner of Income-tax, Delhi vs. Bharti Cellular Limited, reported at [2010] 193 Taxinan 97 (SC); and the another was the decision of the Apex Court in the case of Commissioner of Income-tax-A, Mumbai vs. Kotak Securities Limited, reported at [2016] 67 taxmann.com 356 (SC) and it was submitted that if the observations made by the Apex Court in the above referred decisions are considered, the decision of the Tribunal would be unsustainable and consequently, the questions may arise far consideration before this Court in the present appeals.

We may record that in the decision of the Apex Court in the case of Bharti Cellular Limited (supra) the Apex Court after having found that whether human intervention is required in utilizing roaming services by one telecom mobile service provider Company from another mobile service provider Company, IS an aspect which may require further of the evidence and therefore, the matter was remanded back to the Assessing Officer. Further, in the impugned order of the Tribunal, after considering the above referred decision of Bharti Cellular Limited, the Tribunal has further not only considered the opinion, but found that as per the said opinion the roaming process between participating entities is fully automatic and does not require any human intervention. Therefore, we do not find that the aforesaid decision in the case of Bharti Cellular Limited, would be of any help to the appellants - Revenue.

In our view, the contention is not only misconceived, but is on non existent premise, because the subject matter of the present appeals is not roaming services provided by mobile service provider to its subscriber or customer, but the subject matter is utilization of the roaming facility by payment of roaming charges by one mobile service provider Company to another mobile service provider Company. Hence, we do not find that the observations made are of any help to the Revenue.

As such, even if we consider the observations made by the Apex Court in the case of Bharti Cellular Limited, supra, whether use of roaming service by one mobile service provider Company from another mobile service provider Company, can be termed as technical services" or not, is essentially a question of fact. The Tribunal, after considering all the material produced before it, has found that roaming process between participating entities is fully automatic and ITA No.6159 & 6160/Mum/2018 Assessment Year: 2008-09 & 2009-10 Page 4 of 9 does not require any human intervention. Coupled with the aspect that the tribunal has relied upon the decision of the Delhi High Court for taking support of its view.

In our view, the Tribunal is ultimately fact finding authority and has held that the roaming process between participating company cannot he termed as technical services and, therefore, no TDS was deductible. We do not find that any error has been committed by the Tribunal in reaching to the aforesaid conclusion. Apart from the above, the questions are already covered by the above referred decision of the Delhi High Court, which has been considered by the Tribunal in the impugned decision.

Thus, following the decision of Hon‟ble Jurisdictional High Court we hold that the process involved in the roaming connectivity does not involve any human intervention and, therefore, the services does not fall within the ambit of “technical services”. Hence, it is not required to deduct tax at source on such payments.”

The order passed by the Learned Tribunal Jaipur Bench in had also been carefully considered by us. While passing orders in favour of the assessee, the Learned Tribunal observed as follows: “11. We have heard the rival contentions of both the parties and perused the material available on the record. After going through the order of the Assessing Officer, ld CIT(A); submissions of the assessee as well as going through the process of providing roaming services; examination of technical experts by the ACIT TDS, New Delhi in the case of Bharti Cellular Ltd.; thereafter cross examination made by M/s Bharti Cellular Ltd.; also opinion of Hon‟ble the then Chief Justice of India Mr. S.H. Kapadia dated 03/09/2013 and also various judgments given by the ITAT Ahmadabad Bench in the case of Canara Bank on MICR and Pune Bench decision on Data Link Services. We find that for installation/setting up/repairing/servicing/maintenance capacity augmentation are require human intervention but after completing this process mere interconnection between the operators is automatic and does not require any human intervention. The term Inter Connecting User Charges (IUC) also signifies charges for connecting two entities. The Coordinate Bench also considered the Hon'ble Supreme Court decision in the case of Bharti Cellular Ltd. in the case of i-GATE Computer System Ltd. and held that Data Link transfer does not require any human intervention and charges received or paid on account of this is not fees for technical services as envisaged in Section 194J read with Section 9(1)(vii) read with Explanation-2 of the Act. In case before us, the assessee has paid roaming charges i.e. IUC charges to various operators at Rs. 10,18,92,350/-. Respectfully following above judicial precedents, we hold that these charges are not fees for rendering any technical services as envisaged in Section 194J of the Act. Therefore, we reverse the order of the ldCIT(A) and assessee‟s appeal is allowed on this ground also.”

Learned representative has also fairly agreed that the issues raised on this appeal are squarely covered by the aforesaid decision. We see no reasons to take any other view of the matter then the view so taken by the coordinate bench.

However, before we part with the matter, we must deal with one procedural issue as well. While hearing of this appeal was concluded on 04th February 2020, these orders are being pronounced today on 13th day of July, 2020, much after the expiry of 90 days from the date of conclusion of hearing. We are also alive to the fact that rule 34(5) of the Income Tax Appellate Tribunal Rules 1963, which deals with pronouncement of orders, provides as follows: (5) The pronouncement may be in any of the following manners :— (a) The Bench may pronounce the order immediately upon the conclusion of the hearing. (b) In case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date for pronouncement. (c) In a case where no date of pronouncement is given by the Bench, every endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the hearing of the case was concluded but, where it is not practicable so to do on the ground of exceptional and extraordinary circumstances & 6160/Mum/2018 Assessment Year: 2008-09 & 2009-10 Page 6 of 9 of the case, the Bench shall fix a future day for pronouncement of the order, and such date shall not ordinarily (emphasis supplied by us now) be a day beyond a further period of 30 days and due notice of the day so fixed shall be given on the notice board.

Quite clearly, “ordinarily” the order on an appeal should be pronounced by the bench within no more than 90 days from the date of concluding the hearing. It is, however, important to note that the expression “ordinarily” has been used in the said rule itself. This rule was inserted as a result of directions of Hon’ble jurisdictional High Court in the case of Shivsagar Veg Restaurant Vs ACIT [(2009) 317 ITR 433 (Bom)] wherein Their Lordships had, inter alia, directed that “We, therefore, direct the President of the Appellate Tribunal to frame and lay down the guidelines in the similar lines as are laid down by the Apex Court in the case of Anil Rai (supra) and to issue appropriate administrative directions to all the benches of the Tribunal in that behalf.We hope and trust that suitable guidelines shall be framed and issued by the President of the Appellate Tribunal within shortest reasonable time and followed strictly by all the Benches of the Tribunal. In the meanwhile (emphasis, by underlining, supplied by us now), all the revisional and appellate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is closed for judgment”. In the ruled so framed, as a result of these directions, the expression “ordinarily” has been inserted in the requirement to pronounce the order within a period of 90 days. The question then arises whether the passing of this order, beyond ninety days, was necessitated by any “extraordinary” circumstances.

In the result, the appeal filed by the Revenue stands dismissed. Order pronounced under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1962, by placing the details on the notice board.