VODAFONE MOBILE SERVICES LIMITED,NEW DELHI vs. DCIT INTERNATIONAL TAXATION CIRCLE 2(2), CHENNAI

आदेश / O R D E R

PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER:

ITA No.1653/Mds/2017 :- 2 -:

‘’1. Ground No.1- Appellate order passed by Commissioner of Income Tax (Appeals) is bad in law and hence, void-ab- initio.

1.1 On the facts and circumstances of the case and in law, the ld. Commissioner of Income Tax (Appeals) has erred in holding the appeal filed by the Appellant against the order passed by the ld. Officer under section 201(1) /201(1A) of the Act as invalid without taking cognizance of the fact that VCL did not exist on the date of filing of appeal and was succeeded by Appellant that is VMSL as a result of its merger with Appellant.

1.2 On the facts and circumstances of the case and in law, the ld. Commissioner of Income Tax (Appeals) has failed to appreciate the fact that filing of an appeal by an entity which ceases to exist is a legal impossibility and appeal filed in the name of VCL would have been legally invalid.’’

Ld. Counsel for the assessee submitted that M/s. Vodafone 2.

Cellular Private Limited had filed form 15CA/CB giving details of payment to non-residents as required in Rule 37BB of Income Tax Rules, 1962, for the relevant previous year. According to the ld. Authorised Representative, ld. DCIT issued notice to the assessee for giving reasons why tax was not deducted on remittances to various foreign parties aggregating to �2,20,65,400/- for international roaming, which as per the ld. DCIT was Royalty/Fee for technical services. As per the ld. AR, assessee had thereupon given reply why roaming charges should not be treated as technical services and why no element of Royalty was there in such payments. As per the ld. Authorised Representative, assessee had also brought to the notice

ITA No.1653/Mds/2017 :- 3 -: of the ld. Assessing Officer the order of Jurisdictional High Court in Comp. Petn No. 225 of 2012, dated 5th June, 2013, through which a scheme of amalgamation stood approved with effective date from 11.12.2015. As per the ld. Authorised Representative by virtue of the said scheme, four companies including Vodafone Cellular Pvt. Ltd stood amalgamated with M/s. Vodafone Mobile Services limited. As

per the ld. Authorised Representative, ld. Assessing Officer himself had found that M/s. Vodafone Mobile Services Ltd as one in default, though the returns were filed by M/s. Vodafone Cellular Private Limited. Contention of the ld. Authorised Representative was that M/s.

Vodafone Mobile Services Ltd, which was the amalgamated company, had filed appeal against the order of the ld. Assessing Officer treating the assessee as one in default u/s.201(1) of the Act. As per the ld. Authorised Representative, the ld. Commissioner of Income Tax (Appeals) had refused to consider such appeal taking a view that appellant before him was different from the assessee. As per the ld. Authorised Representative just because PAN of the amalgamating company viz M/s. Vodafone Cellular Private Limited and PAN of amalgamated company viz M/s. Vodafone Mobile Services Ltd were different, ld. Commissioner of Income Tax (Appeals) ought not have dismissed the appeal of the assessee. Contention of the ld. Authorised Representative was that ld. Commissioner of Income Tax (Appeals) did

ITA No.1653/Mds/2017 :- 4 -: not consider the judgment of Hon’ble Jurisdictional High Court approving the merger.

Per contra, ld. Departmental Representative strongly 3.

supported the orders of the authorities below.

Ld. Commissioner of Income Tax (Appeals) had dismissed the appeal of the assessee with the following observations:-

‘’The appellant M/s. Vodafone Mobile Services Ltd having PAN No. AAACS 4457Q has e-filed appeal vide acknowledgement No.380747571040816 in Form No.35 against the order passed in the case of assessee M/s. Vodafone Cellular Pvt. Ltd having PAN No. AAACB 8614L u/s.201(1) (1A) of the Income Tax Act, 1961 dated 28.06.2016 for A.Y. 2014-15. Therefore, the appeal filed in the name of M/s. Vodafone Mobile Services Ltd, having PAN No.AAACS4457Q has e-filed appeal vide acknowledgment No.380747571040816 is treated as invalid appeal in the eyes of in the view of the above, appeal in the name of M/s. Vodafone Mobile Services Ltd having PAN AAACS4457 has e-filed appeal vide acknowledgment No.380747571040816 appearing in the appeal register of Commissioner of Income Tax (Appeals)- 16, Chennai at 16-17 is treated as invalid appeal. Hence it becomes infructuous and for statistical purpose treated as dismissed’’.

It is true that order u/s.201(1)/(1A) of the Act was passed by the ld. Assessing Officer in the name of M/s. Vodafone Cellular Private Limited. However, in the concluding part of the said order he noted as :-

ITA No.1653/Mds/2017 :- 5 -:

‘’In view of the facts narrated above, the assessee M/s. Vodafone Mobile Services Ltd is held to be an assessee in default in respect of the following remittances made during the financial year 2013-14 without deduction of tax at source.

Sl.No Head of remittance as Treated as Amount per Form 15CA (in �)

1 International rooming Royalty /Fee 2,20,65,400/- charges for Technical services

Total 2,20,65,400/- It is therefore clear that ld. Assessing Officer was aware of the merger of the assessee company with M/s. Vodafone Mobile Services P. Ltd. We also find that the Hon’ble Jurisdictional High Court vide the judgment dated 5th June, 2013 had given approval for the scheme of amalgamation. Once the scheme of amalgamation is approved by the Hon’ble Jurisdictional High Court, we cannot say that the appeal on behalf of the amalgamating company cannot be filed by newly formed amalgamated company. In our opinion, ld. Commissioner of Income Tax (Appeals) fell in error in refusing to consider the appeal of the assessee just for a reason that Permanent Account Numbers were different. Once the merger is approved by the Hon’ble Jurisdictional High Court what is relevant is only the Permanent Account Number of the amalgamated company and the Permanent Account Numbers of ITA No.1653/Mds/2017 :- 6 -: the amalgamating companies are not at all relevant. We are of the opinion that the ld. Commissioner of Income Tax (Appeals) ought have adjudicated the appeal of the assessee on merits. We therefore set aside the order of the ld. Commissioner of Income Tax (Appeals) and remit the appeal back to him for consideration afresh in accordance with law.