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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: MS. MADHUMITA ROY & SHRI B.M. BIYANI
Feeling aggrieved by revision-order dated 27.03.2014 passed by learned Commissioner of Income-Tax (TDS), Ujjain [“Ld. CIT)”] u/s 263 of the Income-tax Act, 1961 [“the Act”], which in turn arises out of order dated 14.03.2012 passed by learned ITO-(TDS)-II, Indore [“Ld. AO”] u/s 201(1) / 201(1A) for Financial Year 2009-10, the assessee has filed this appeal.
By means of various grounds raised in Appeal Memo, which are not being narrated here for the sake of brevity, the assessee has precisely claimed that the Ld. CIT has erred in passing revision-order u/s 263.
M/s. Bharti Airtel Limited Assessment year 2010-11 3. Briefly stated the facts are such that the assessee-company is engaged in the business of providing cellular mobile and telecommunication service. On 14.03.2012, Ld. AO passed an order u/s 201(1)/(1A) holding the assessee as responsible for deduction of tax at source u/s 194H out of certain payments. Subsequently, Ld. CIT examined the records of proceeding conducted by Ld. AO and found the aforesaid order passed by Ld. AO as erroneous in so far it is prejudicial to the interest of revenue on the ground that the Ld. AO has passed order without examining non-deduction of TDS out of roaming charges of Rs. 7,24,19,383/- paid by assessee. Accordingly, Ld. CIT initiated action u/s 263 of the Act through notice dated 11.03.2014, to which the assessee made submission. Being unsatisfied, Ld. CIT passed revision-order holding the order as erroneous and prejudicial to the interest of revenue and directing the Ld. AO to reframe order after examining the issue. Aggrieved by such revision-order of Ld. CIT, the assessee has filed present appeal and now before us.
Ld. AR vehemently argued that the order passed by Ld. CIT u/s 263 is factually and legally bad. Ld. AR advanced following submission in this regard:
(i) Ld. AR drew our attention to all pages of the revision-order passed by Ld. CIT u/s 263 and submitted that the whole-order, at all places, speaks that the Ld. AO has not examined the TDS liability out of payment of roaming-charges u/s 194J. Thereafter, drawing our attention to all pages of the original-order passed by Ld. AO and demonstrated that the whole order was dealing the issue of TDS u/s 194H qua certain payments to which section 194H is applicable. Ld. AR submitted that there are so many TDS provisions under the scheme of Income-tax Act, 1961, each dealing with a separate and specific type of payment and the impugned roaming-charges are not a part of TDS u/s 194H. Ld. AR submitted that when the subject-matter dealt with by the original-order passed by Ld. AO was confined to TDS u/s 194H out of payments covered under section 194H only, the Ld. AO had no occasion Page 2 of 6
M/s. Bharti Airtel Limited Assessment year 2010-11 to deal with the TDS u/s 194J out of impugned payment of roaming- charges. In such a situation, according to Ld. AR, when the original- order was qua the payments covered u/s 194H and not qua payments covered u/s 194J at all, how can Ld. CIT invoke section 263 by saying that the Ld. AO has not examined the issue of TDS out of roaming charges?
(ii) Ld. AR submitted that the Assistant Commissioner of Income-tax, TDS- Circle, Indore conducted enquiries in the matter of TDS out of impugned roaming-charges paid by assessee, which is very much evident from the following documents placed at Page No. 24 to 33 of the Paper-Book:
(a) Copy of the letter dated 12.07.2013 by ACIT (TDS), Indore to the assessee requiring details of the roaming charges paid by assessee during the financial year 2009-10 (b) Copy of the summon u/s 131 dated 24.09.2013 issued by ACIT (TDS), Indore to assessee for compliance of aforesaid letter dated 12.07.2013 (c) Copy of the letter dated 30.09.2013 filed by assessee to ACIT (TDS), Indore, accompanied by a chart showing monthwise details of roaming charges of Rs. 7,24,19,383/- paid to Bharti Hexacom Limited. (d) Copy of the letter dated 03.10.2013 filed by assessee to ACIT (TDS), Indore, accompanied by a chart showing datewise details of roaming charges of Rs. 7,24,19,383/- paid to Bharti Hexacom Limited. (e) Copy of the letter dated 20.11.2013 sent by M/s Bharti Hexacom Limited, in which M/s Bharti Hexacom Limited has confirmed having earned income of Rs. 7,24,19,383/- during the financial year 2009-10 from assessee and having declared the same in its income-tax return and paid entire taxes thereon. This letter is also M/s. Bharti Airtel Limited Assessment year 2010-11 accompanied by a certificate of CA and Acknowledgement of income-tax return filed by M/s Bharti Hexacom Limited.
Ld. AR submitted that after such enquiry, no order u/s 201(1)/(1A) was passed qua TDS out of roaming-charges. This makes it clear that the department is satisfied that no TDS is required out of roaming-charges. Ld. AR carried us to Page No. 16 of the Paper-Book to show that the details of such enquiry having been conducted by department was clearly intimated to Ld. CIT in the reply dated 20.03.2014 filed in response to show-cause notice issued by CIT u/s 263. But the Ld. CIT has not taken cognizance of these facts while passing revision-order. In fact, the Ld. CIT has made following observation on Page No. 4 of the order, which is factually wrong:
“The assessee has not submitted any evidence to establish that the recipient service providers to whom the assessee has paid the roaming charges, have paid their entire taxes for the F.Y. 2009- 10. Hence, the decision of Apex Court in Hindustan Coca Cola Beverages Pvt. Ltd. VS. CIT 293 ITR 226 is not applicable in assessee’s case. In view of above it is held that the tax payable u/s 201 and interest payable u/s 201(1A) have been under- asessed.” It is noteworthy that the Ld. CIT has himself, on immediately preceding page i.e. Page No. 3 of his order, reproduced the reply of assessee from which it is clear that the assessee has submitted all documents. Therefore, the revision-order passed by Ld. CIT is not a proper adjudication of the revision-proceeding.
(iii) Ld. AR submitted that the issue is already settled in favour of assessee by Hon’ble Madras High Court in Skycell Communications Limited 251 ITR 53 and this aspect was also brought to the notice of Ld. CIT in the reply submitted by assessee. Ld. AR also filed a few more decisions in favour of assessee.
With these submissions, Ld. AR argued that neither there is any error in the order passed by Ld. AO nor it is prejudicial to the revenue. Hence the Page 4 of 6
M/s. Bharti Airtel Limited Assessment year 2010-11 revision-order passed by Ld. CIT does not hold good and deserves to be quashed.
Per contra, Ld. DR supported the order of Ld. CIT. The Ld. DR, however, could not controvert the contentions of Ld. AR, yet Ld. DR mentioned that though the issue of TDS out of roaming charges is settled in favour of assessee in certain decisions, the department is still contesting and it cannot be said that the issue has attained finality in assessee’s favour.
We have considered rival submissions of representatives of both sides, perused the relevant record and judicial precedents referred by them during hearing. We find sufficient merit in the first contention of Ld. AR itself that the order passed by Ld. AO was qua section 194H and not qua section 194J, whereas the impugned roaming-charges for which revision is invoked, are subject-matter of section 194J. Therefore, the revision-order passed by Ld. CIT is unsustainable in the first instance itself. Going further, we also find weightage in the submission of Ld. AR that vide letter dated 12.07.2013 and summon dated 24.09.2013, the department has made independent enquiries from assessee with respect to TDS out of roaming-charges and the assessee had filed adequate replies. Thereafter, no order was passed against assessee u/s 201(1)/201(1A) qua TDS out of roaming charges. By such action, the department has accepted that no TDS was required out of roaming-charges. It is further demonstrated by Ld. AR that the assessee had filed the details of such enquiry having been made by department, to Ld. CIT in the reply to the show-cause notice u/s 263. When it is so, the Ld. CIT ought to have taken cognizance and adjudicate the proceeding of section 263 fairly and lawfully. Lastly, we observe that there are decisions in favour of assessee where it has been held that roaming charges does not attract TDS u/s 194J. We also observe from the reply given by Ld. DR that the revenue is still contesting the applicability of TDS u/s 194J to roaming charges. It is a settled law that if two views are possible and the AO has followed one which is favourable to assessee, the order of AO cannot be said to be erroneous.
M/s. Bharti Airtel Limited Assessment year 2010-11 7. In view of above and for the reasons stated above, we are of the firm view that the revision-order passed by Ld. CIT does not fulfill the requirement of section 263. Therefore, we are inclined to hold that the revision order is not a valid order and deserves to be quashed. We order accordingly.
In the result, this appeal of assessee is allowed.
Order pronounced in Open Court on 14/09/ 2022.