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TMI Blog2015 (11) TMI 1521X X X X Extracts X X X X X X X X Extracts X X X X ..... source u/s 194H. When there is no commission, the liability for deduction of tax at source does not arise at first place. In any case, the ld. CIT(A) has given a specific direction ‘’the alternative plea of the appellant was allowed in view of the decision of M/s. Hindustan Coca Cola Beverages (P) Ltd. (2007 (8) TMI 12 - SUPREME COURT OF INDIA ). AO is directed to allow the benefit of taxes paid by the deductees after due verification’’. However, the ld. AR has not pointed out as to how the said direction causes prejudice to the assessee. Hence, we find no reason to interfere with the findings of the ld. CIT(A) on this issue. - ITA Nos. 251, 252, 253, 254, 255 & 256/JP/2013 - - - Dated:- 20-11-2015 - SHRI R.P. TOLANI, JM SHRI VIKRAM SINGH YADAV, AM For the Appellant: Shri P.C. Parwal , CA For the Respondent: Shri Raj Mehra, JCIT PER VIKRAM SINGH YADAV, AM The assessee has filed the above appeals against the common order of the ld. CIT(A)-III, Jaipur dated 18-12-2012 for the assessment year 2004-05 to 2008-09. In all the appeals the grounds are common except for additional ground on limitation in respect of A.Y. 2004-05, 2005-06 and 2006-07. For the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to other telephony operators for roaming charges incurred by the appellant's subscribers on the network of such other telephone operators because such payment are not for technical services and do not fall within the provisions of Section 194J of the Act. The learned Commissioner of Income Tax (Appeals) has further erred both on facts and in law in upholding the action of the learned AO. 3. The learned AO has erred both on facts and in law in charging interest of ₹ 4,905,761/- u/s 201(1A) of the Act. The learned Commissioner of Income Tax (Appeals) has further erred both on facts and in upholding the action of the ld. AO 4. The learned AO has erred both on facts and in law in passing an order u/s 201(1) and 201(1A) of the Income tax Act, 1961 for a period beyond four financial years. The learned Commissioner of Income Tax (Appeals) has further erred both on facts and in law in upholding the action of the learned AO. 2. At the outset, the ld. AR of the contends that Ground No. 1 to 1.2 are covered by the order of this Coordinate Bench in assessee's own case (in ITA No. 656/JP/2010 for the assessment year 2009-10.) and since there is no change in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders are reversed. c. Looking at the transaction being of Sale/Purchase and relationship being of principal to principal the discount does not amount to commission in terms of sec. 194H, the same is not applicable to these transactions. Therefore, assessee cannot be held in default; impugned demand raised applying sec. 194H is quashed. Assessee s grounds are allowed. By respectfully following our own decision on similar fact, we reverse the order of the ld CIT(A) and allow the appeal of the assessee on this ground. 5. In the light of the above, respectfully following the decision of Coordinate Bench in assessee's own case for the assessment year 2009-10 (supra), we reverse the order of the ld. CIT(A) and allow the appeal of the assessee relating to Ground No. 1 to 1.2. 6. Now we take up Ground No. 1.3 of the assessee regarding demanding the tax of ₹ 8,37,842/- which is already subjected to tax in the hands of the distributor. 7. We have already held while deciding Ground No. 1 to 1.2 that the margin paid to the distributor is not a commission which is liable for deduction of tax at source u/s 194H. When there is no commission, the liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter 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 ₹ 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 ld CIT(A) and assessee s appeal is allowed on this ground also. 12. In the light of the above, respectfully following the decision of Coordinate Bench in assessee's own case for the assessment year 2009-10 (supra), we reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is pertinent to mention here that the appellant has wrongly mentioned the date of initiation of proceedings as 22-02- 2011. It is evident from records as mentioned in order u/s 201(1) dated 24-03-2011 that the first show cause notice was issued on 25-11-2008 and further notices were issued on 17-09-2010, 27-12- 2010 and 22-02-2011. The decision of Special Bench, Mumbai in the case of Mahindra and Mahindra Ltd. was delivered on 09-04-2009 i.e. before the amendment brought by Finance Act 2009. Since the amendment prescribed the specific limitation for order u/s 201(1), the Tribunal s decision is no more applicable. Similarly, the other decisions relied upon by the ld. AR were delivered without considering the amendment made in Section 201 of the Act by Finance Act 2009. Hence, the same are not relevant to decide this issue. In view of the above discussion, the order u/s 201(1) dated 24-03-201 for F.Y. 2003-04 to 2005-06 is a valid order, passed within the limitation prescribed u/s 201(3) of the Act. The ground raised by the appellant is accordingly dismissed. [Emphasis supplied] 17. During the course of hearing, the ld. AR submitted that it is not under dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct on through making an assessment of income of the deductee. [Emphasis supplied] 18. We have heard the rival contentions and perused the material available on record. Admittedly the show cause notice, by virtue of which, the subject proceedings were initiated, was issued by AO on 25th Nov. 2008 for all the years pursuant to which a consolidated order u/s 201(1)/ 201(1A) was passed on 24th March 2011. It is not under dispute that for the relevant year under consideration (F.Y. 2003-04, 2004-05 and 2005-06), the provisions of amended Section 201 of the Act are applicable. The provision of Section 201(3) relevant for present discussion are reproduced as under:- No order shall be made under sub-section (1) deeming a provision to be an assessee in default for failure to deduct the whole or any part of the tax from a person resident in India, at any time after the expiry of :- (i) two years from the end of the financial year in which the statement is filed in a case where the statement referred in Section 200 has been filed; (ii) four years from the end of the financial year in which payment is made or credit is give in any other case. Provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiation cannot be beyond the period of completion of proceedings. Secondly, the legislature in its wisdom has decided not to prescribe a specific time limit for initiation and has only provided for period of completion of proceedings. The same is thus inbuilt in the overall period of limitation as prescribed. In view of that, in context of Section 201(3), two years from the end of the financial year, in a case where the statement referred in Section 200 has been filed, would be the reasonable period for initiation and completion of proceedings; and four years from the end of the financial year in which payment is made or credit is given, would be the reasonable period for initiation and completion of proceedings in any other case. At the same time, what should not be lost sight of is the proviso to section 201(3) which provides for extended period of limitation in respect of pending matters for the financial years ending on or before April 1, 2007. The Memorandum explaining the provisions of the Finance Bill 2009 also states that to provide sufficient time for pending cases, time limit has been extended upto 31-03-2011. In our view, the legislature has carved out an exception for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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