TATA COMMUNICATION LTD,MUMBAI vs. DCIT (OSD) (TDS) 2 (3), MUMBAI
Facts
The assessee, a telecommunication service provider, was found to be non-compliant with TDS provisions. The Assessing Officer (AO) passed an order raising a demand of Rs. 50.71 crores for failure to deduct tax at source, which was upheld by the CIT(A). The assessee contended that they were not given sufficient opportunity to produce voluminous documents, and that there was a violation of natural justice.
Held
The Tribunal observed that the primary issue was whether the assessee was an 'assessee in default'. Given the voluminous nature of data and the assessee's contention that recipients had paid taxes, the Tribunal decided to set aside the issues to the AO for fresh consideration.
Key Issues
Whether the assessee was an 'assessee in default' and whether sufficient opportunity was provided to the assessee to present their case and documents.
Sections Cited
201(1), 201(1A), 40(a)(i)/(ia), 250, 131
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI
BEFORE MS. KAVITHA RAJAGOPAL, JM AND SHRI OMKARESHWAR CHIDRA, AM ITA Nos.3188 to 3193/Mum2023 (Assessment Years: 2013-14 to 2018-19)
and
Stay Application Nos. 8 to 13/Mum/2024 (Arising out of ITA Nos.3188 to 3193/Mum2023 (Assessment Years: 2013-14 to 2018-19)
Tata Communication Ltd. DCIT(OSD) (TDS) 2(3) Videsh Sanchar Bhavan, Mumbai Mahatma Gandhi Road, Vs. For, Mumbai-400 001
PAN/GIR No. AAACV 2807 C (Assessee) : (Respondent)
Assessee by : Shri Shri. J.D. Mistri a/w Shri. Ketan Ved Respondent by : Shri. Biswanath Das-CIT DR
Date of Hearing : 02.05.2024 Date of Pronouncement : 31.05.2024
O R D E R Per Bench:
The captioned appeals have been filed by the assessee, challenging the order of the
learned Commissioner of Income Tax (Appeals) passed u/s.250 of the Income Tax Act,
1961 (‘the Act'), pertaining to the Assessment Years (‘A.Y.’ for short) 2013-14 to 2018-
19.
The assessee has also filed the Stay Applications in this matter seeking for stay of
recovery of demand raised by the Revenue.
2 ITA Nos. 3188 to 3193/Mum2023 and SA Nos.8 to 13/Mum/2024 (A.Ys.2013-14 to 2018-19) Tata Communication Ltd. vs. DCIT(OSD) 3. As these issues are identical, we hereby pass a consolidated order in all these
appeals by taking up ITA No. 3188/Mum/2023 as the lead case for the sake of
convenience.
ITA No. 3188/Mum/2023
The assessee has challenged this appeal on various grounds, which are on
violation of principles of natural justice, notice in compliance with Circular No. 19 of
2019 dated 14.08.2019 on computer generated Document Identification Number (DIN for
short), on the grounds of limitation and on the merits of the case where the ld. CIT(A) has
upheld the order of the ld. Assessing Officer ('A.O.' for short) in holding the assessee to
be an ‘assessee in default’ u/s. 201(1)/201(1A) of the Act for an impugned amount of
TDS of Rs.241,73,48,081/- along with various other grounds.
The brief facts are that the assessee, resident in India, is a leading provider of
telecommunication services, global digital infrastructure services, engaged in providing
integrated, globally managed tech solutions. Based on the information received from
Addl. CIT-1(3), Mumbai dated 24.09.2019 that the assessee has been non compliant of
the TDS provisions due to which various discrepancies were found, the TDS Officer
conducted TDS verification at the premises of the assessee on 27.09.2019 where the
statements of assessee company’s associate on oath u/s. 131 of the Act were recorded.
The assessee was served with notice u/s. 201(1) dated 01.10.2019 which the assessee
contends that it did not contain the DIN number and a subsequent notice dated
3 ITA Nos. 3188 to 3193/Mum2023 and SA Nos.8 to 13/Mum/2024 (A.Ys.2013-14 to 2018-19) Tata Communication Ltd. vs. DCIT(OSD) 11.10.2019 was issued u/s. 201(1) of the Act seeking for details to be furnished before
22.10.2019.
The learned Authorised Representative ('ld. AR' for short) for the assessee had
appeared and had sought for time from the TDS Officer for the reason that the data
required is voluminous in nature which requires a considerable amount of time and effort
for the purpose of producing the same. Another notice dated 28.10.2019 was issued
seeking for various other details of the year end provisions for which the ld. AR for the
assessee requested for further time for producing the details pertaining to the
disallowance made u/s. 40(a)(i)/(ia) of the Act being voluminous as the same consists of
around 54,000 line items only for A.Y. 2013-14 and more than one lacs line items for the
subsequent years which would require further time for the reason that it is voluminous
and the employees of the assessee were engaged in tax audit quarter end closing, for
board meeting, IT return filing, etc. The assessee had on other occasions also sought for
further time for collating the said datas. The ld. TDS Officer passed an order raising
demand of Rs.50.71 crores on account of default in deduction of tax at source.
Aggrieved, the assessee is in appeal before the first appellate authority.
The ld. CIT(A) upheld the order of the ld. Assessing Officer ('A.O.' for short) on
the ground that the assessee has failed to deduct TDS on expenses claimed in the books
of accounts.
Further aggrieved the assessee is in appeal before us.
4 ITA Nos. 3188 to 3193/Mum2023 and SA Nos.8 to 13/Mum/2024 (A.Ys.2013-14 to 2018-19) Tata Communication Ltd. vs. DCIT(OSD) 10. We have heard the rival submissions and perused the materials available on
record. The learned Authorised Representative ('ld. AR' for short) for the assessee
contended that the assessee was not given sufficient opportunity to produce the relevant
documents that are required to prove that the assessee is not the ‘assessee in default’. The
ld. AR further stated that as several years are involved in this and since various payments
to various parties have been made, the data is very voluminous and has to be complied
meticulously for the purpose of examining the payments made. The ld. AR reiterated that
there was violation of principles of natural justice where the assessee was not given
sufficient opportunity to establish its case. The ld. AR also further contended that the
legal grounds on DIN and limitation were also not considered by the lower authorities.
Further to this, it was contended that some payments were categorized for non deduction
of TDS and in some cases where the recipient had already paid the tax and various other
details requires a thorough verification, which was not carried out by the lower
authorities.
The learned Departmental Representative ('ld.DR' for short), on the other hand,
controverted the said facts and stated that the assessee has failed to produce the complete
details before the lower authorities inspite of several opportunities but nevertheless
agreed that the issue in dispute requires complete verification.
On perusal of both the sides, it is observed that the primary issue involved in this
appeal is whether the assessee is an ‘assessee in default’ as per the provision of section
201(1)/(1A) of the Act. It is to be observed that as per the contention of the ld. AR for the
5 ITA Nos. 3188 to 3193/Mum2023 and SA Nos.8 to 13/Mum/2024 (A.Ys.2013-14 to 2018-19) Tata Communication Ltd. vs. DCIT(OSD) assessee, the recipients of the payments is said to have paid taxes in most of the cases
which details are not furnished neither before the ld. TDS officer nor before the ld.
CIT(A). We are, therefore, of the opinion that in the interest of justice, all the issues
raised by the assessee ought to be set aside to the file of the ld. A.O. for considering the
details proposed to be filed by the assessee. The ld. A.O. is directed to give a sufficient
opportunity to the assessee for producing the same and to decide these issues on the
merits of the case. The assessee is also directed to appear before the ld. A.O. and produce
all the documentary evidences in support of its claim without any undue delay.
In the result, the appeal filed by the assessee in ITA No.3188/Mum/2023 is
allowed for statistical purpose.
ITA Nos.3189 to 3193/Mum/2023
As the facts in all the other appeals are identical, the observation of ITA No.
3188/Mum/2023 applies mutatis mutandis to these appeals also and, hence, all these
appeals are allowed for statistical purposes.
Stay Application Nos. 8 to 13/Mum/2024
As we have disposed of all the above mentioned appeals setting it aside to the ld.
A.O., the corresponding stay applications raised by the assessee are hereby dismissed as
infructuous.
6 ITA Nos. 3188 to 3193/Mum2023 and SA Nos.8 to 13/Mum/2024 (A.Ys.2013-14 to 2018-19) Tata Communication Ltd. vs. DCIT(OSD) 16. In the result, all the appeals filed by the assessee are allowed for statistical purpose
and the stay applications raised by the assessee are hereby dismissed as infructuous.
Order pronounced in the open court on 31.05.2024.
Sd/- Sd/-
(Omkareshwar Chidara) (Kavitha Rajagopal) Accountant Member Judicial Member Mumbai; Dated : 31.5.2024 Roshani, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT - concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,
(Dy./Asstt. Registrar) ITAT, Mumbai
