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TMI Blog2018 (12) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... years 2003-04 and 2004-05, respectively. 2.These Appeals have been admitted on 21.04.2009, on the following Substantial Question of Law: "Whether on the facts and circumstances of the case, the Tribunal was right in holding that the assessee is not a basic telecommunication service provider as per Section 80IA(4)(ii) and therefore, not entitled for deduction under Section 80IA?" 3.The assessee filed their return of income for the assessment years 2003-04 and 2004-05, admitting a total income of Rs.'Nil'. The assessments were completed under Section 143(3) of the Act, vide assessment orders dated 27.2.2006 and 6.12.2006. The Assessing Officer held that the nature of service done by the assessee is that of commission agent of BSN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been entered into between the BSNL and the assessee. The CITA, on perusal of the terms and conditions of the agreements, held that the assessee is operating telephone exchanges and providing basic telecommunication services to its customers, and therefore, the interpretation of the Assessing Officer that the assessee is not providing 'basic telecommunication services' is incorrect. Further, after taking note of the statutory provision, viz., Section 80IA(4)(ii) of the Act, the CITA held that from the agreement entered into between the assessee and the BSNL and the Certificate dated 22.08.2006 issued by the BSNL it is clear that the assessee is providing 'basic telecommunication services' to its customers and therefore, held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith declared by the Telegraph Authority to be an exchange system. Rule 2(jj) defines 'Private Branch Exchange' means an exchange provided for any one party and connected to a departmental exchange. Rule 2(kk) defines "Private Exchange" to mean a telephone exchange provided exclusively for the use of an organisation or an individual and not connected to the public network. 8.Section 2(k) of the TRAI Act, 1997 defines 'telecommunication service' in the following terms: "'Telecommunication service' means service of any description (including electronic mail, voice mail, data services, audio tax services, video tax services, radio paging and cellular mobile telephone services) which is made available to users by means ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014. The Tribunal examined an identical question, where the assessees, who were franchisees of BSNL and who were permitted to instal, maintain and operate in-dialling PABX under franchisee to support the Department, can be treated to have provided 'basic telephone services' entitling them for deduction under Section 80IA of the Act. The Court held in favour of the assessee. Further in the decision of ITAT, Mumbai Bench, in ITA No.1654/Mum/10, dated 21.12.2009 in the case of Income Tax Officer v. Quick Telecom, Mumbai, the Mumbai Tribunal also examined an identical agreement as that of the agreement entered into by the assessee with BSNL and held that merely because the services are provided in association with MTNL (in that case), ..... X X X X Extracts X X X X X X X X Extracts X X X X
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