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TMI Blog2024 (5) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... st levied by AO automatically comes to end - Accordingly, the grounds of assessee are allowed. - Shri Vijay Pal Rao, Judicial Member And Shri B.M. Biyani, Accountant Member For the Assessee : Shri Sumit Nema, Sr. Advocate with Shri Gagan Tiwari Shri Arun Dwivedi, ARs For the Revenue : Shri Harshit Bari, Sr. DR / Shri R.K. Yadav, CIT-DR ORDER PER B.M. BIYANI, AM: These are the two appeals filed by assessee for Financial Year 2009-10 relevant to Assessment-Year 2010-11. The first appeal being ITA No. 415/Ind/2014 is directed against revision-order dated 27.03.2014 passed by CIT (TDS), Bhopal u/s 263 of the Income-tax Act, 1961 [ Act ] which in turn arises out of order dated 30.03.2012 passed by ITO (TDS)-II, Indore [ AO ] u/s 201(1)/(1A). The second appeal being ITA No. 265/Ind/2018 is directed against appeal-order dated 01.02.2018 passed u/s 250 by CIT(Appeal)-II, Indore [ CIT(A) ] which in turn arises out of order dated 28.07.2014 passed by DCIT (TDS), Indore [ AO ] u/s 201(1)/(1A) pursuant to the aforesaid revision-order dated 27.03.2014 passed by CIT (TDS), Bhopal u/s 263. 2. The background facts leading to these appeals are summed up as under: (i) ITA No. 415/Ind/2014 The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 194H and 194J. The first issue of non-deduction of TDS u/s 194H was common for all other years and has been adjudicated by the Tribunal while passing composite order dated 25.05.2023 however, the second issue raised by the assessee for this assessment year is regarding non-deduction of TDS u/s 194J and consequential order passed u/s 201 201(1) of the Income Tax and the same has not been adjudicated. Therefore, there is an apparent mistake from record of the impugned order to the extent of non adjudication of ground no.4, 5 7 invoking issue of TDS u/s 194J. 9. Accordingly we recall the impugned order for A.Y. 2010-11 to the extent of non-adjudication of ground nos.4, 5 7 and the appeal of the assessee is directed to fix for fresh hearing and adjudication of ground nos.4,5 7 of the assessee s appeal on 13.03.2024. The date of hearing of the appeal is announced in open court and noted by the both parties and therefore, no notice is required to be issued in this respect. Accordingly, the ITA No. 265/Ind/2018 has again come up before us for the limited purpose to adjudication of Ground No. 4, 5 7 relating to TDS u/s 194J out of roaming charges paid to OTOs. 3. Since both appeals are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rospective amendment under the Act cannot fasten a TDS liability on the appellant. 4. The Appellant prays that the order passed u/s 201 r.w.s. 194J treating Appellant as an assessee in default u/s 194J on roaming charges paid by set-aside as being bad in law. 7. Ld. AR for assessee carried us to above grounds and submitted that the lower-authorities have treated the roaming charges paid by assessee to OTOs as falling within the expression fee for technical services (FTS) in terms of Explanation 2 to section 9(1)(vii) or alternatively as royalty in terms of Explanation 2 6 to section 9(1)(vi) and accordingly held assessee as liable for TDS u/s 194J. However, it is the submission of assessee that the impugned payment is covered by none. Therefore, the assessee has raised two separate grounds, namely Ground No. IV and Ground No. V to deal both points respectively. 8. The expression fee for technical services is defined in Explanation 2 to section 9(1)(vii) as under: Explanation 2. - For the purposes of this clause, fees for technical services means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the Hon ble Delhi High Court decided in CIT Vs. Bharti Cellular Ltd. 319 ITR 139 (Del) that roaming service not involving human interference is not a technical service as contemplated under Explanation 2 to section 9(1)(vii) and therefore not liable for TDS u/s 194J. Against decision of Hon ble Delhi High Court, the department filed appeal to Hon ble Supreme Court whereupon the Hon ble Supreme Court remanded matter to department for ascertaining with technical assistance as to whether there was involvement of human intervention or not? The issue again came up before Hon ble Karnataka High Court in CIT Vs. Vodafone South Ltd. (2016) 72 taxmann.com 347 (Karnataka) dated 28.07.2016 . The Hon ble Karnataka High Court has, in following paras of judgement, noted the entire background, the remand direction of Hon ble Supreme Court, the subsequent exercise done by department and taking into consideration all these aspects, finally upheld ITAT s order holding that roaming service does not involve any human invention and therefore outside the ambit of FTS: 4. The assessee, in all the appeals, is a mobile service provider Company. As per the assessee, whenever any roaming facilitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court, to decide the legal issues based on the factual foundation. Held accordingly, remanding the matters for determination with technical assistance, that in these cases, in which a cellular provider under an agreement pays interconnect/access/port charges to BSNL/MTNL, the question whether the cellular provider has rendered technical services and has to deduct tax at source, depended on whether the charges were for technical services, and this involved determination of whether any human intervention was involved, which could not be determined without technical assistance. Decision of the Delhi High Court in CIT v. BHARTI CELLULAR LTD.319 ITR 139 (Del) set aside and matter remanded to the Assessing Officer with directions. After this decision, the Ld. Assessing Officer examined the technical expert of the C-DOT on 29.09.2010 in respect of IUC and which were cross examined on 04.10.2010 by M/s. Bharti Cellular Limited, Delhi. The technical experts re-examined on 04.10.2010 on this issue and admitted that roaming services does not require any human intervention, it operates automatically. The Ld. AR also drawn our attention on independent opinion taken from Director CMAI, Ex- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in iGATE 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 Rs. 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. 14. Reading of the above order clearly show that fact - situation was essentially similar to the one here in the case of the assessee. Assessee was also treated as one in default for failure to deduct tax at source on roaming charges paid to other distributors. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Bharti Cellular. Limited, the Tribunal has further not only considered the opinion, but found that as per the said opinion the roaming process between participating entities is fully automatic and does not require any human intervention. Therefore, we do not find that the aforesaid decision in the case of Bharti Cellular Ltd. would be of any help to the appellants - Revenue. 10. In the another decision of the Apex Court, in the case of Kotak Securities Ltd. the matter was pertaining to the charges of the Stock Exchange and the Apex Court, ultimately, found that no TDS on such payment was deductible under Section 194J of the Act. But the learned Counsel for the appellants - Revenue attempted to contend that in paragraphs 7 and 8 of the above referred decision of the Apex Court, it has been observed that if a distinguishable and identifiable service is provided, then it can be said as a technical services . Therefore, he submitted that in the present case, roaming services to be provided to a particular mobile subscriber by a mobile Company is a customize based service and therefore, distinguishable and separately identifiable and hence, it can be termed as technical serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n.com 347/241 Taxman 497 has decided the aforesaid issue in favour of the respondent-assessee. However, learned counsel for the appellant-revenue states that the Bombay High Court has admitted the similar question of law for consideration. 3. Learned predecessor Division Bench vide order dated 22nd March, 2021 had opined that as no Special Leave Petition has been filed against the judgment of the Karnataka High Court, the said view would be binding on the appellant-revenue. Learned predecessor Division Bench had directed the counsel for the appellant-revenue to obtain necessary instructions from the CBDT as to the way forward. 4. Mr. Zoheb Hossain, learned standing counsel for the revenue has handed over a letter dated 21st April, 2022 written by JDIT(OSD)(L R), New Delhi addressed to the Commissioner of the Income Tax, High Court Cell (Judicial), New Delhi. The said letter is taken on record. The said letter reads as under :- 'To, The Commissioner of Income-tax (Judicial), High Court Cell, Delhi Respected Sir, Sub: Urgent Instructions required in the case of Commissioner of Income-tax (TDS-2) v. M/s Tata Teleservices Ltd.[ITA No. 1417/2018]- regarding. Kindly refer to your e-m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ann.com 752 (SC) 5. This Court in a catena of cases has consistently taken the view that if an earlier order is not appealed against by the Revenue and the same has attained finality, then it is not open to the Revenue to accept the judgment/order on the same question in the case of one assessee and question its correctness in the case of some other assesses. Revenue cannot pick and choose 7. Admittedly, the Karnataka High Court and various Tax Tribunals have taken the view that there is no human intervention involved in providing the interconnect services whether it be for data link or roaming. 8. The Supreme Court in Berger Paints India Ltd. v. CIT [2004] 135 Taxman 586/266 ITR 99 has held that if the revenue has not challenged the correctness of the law laid down by the High Court and has accepted it in the case of one assessee, then it is not open to the revenue to challenge its correctness in the case of other assessee without just cause. 9. Keeping in view the aforesaid mandate of law and the letter dated 21st April, 2022, this Court is of the view that the appellant-revenue has consciously elected not to challenge the aforesaid judgment of the Karnataka High Court, which hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions as well as the relevant material on record. It is pertinent to note that the issue was initially decided by the Hon ble Delhi High Court in the case of CIT vs. Bharti cellular Ltd. (175 Taxman 573) whereby the Hon ble High Court held that the roaming charges paid by the operator to other operator is not in the nature of fee for technical services (FTS). The revenue carried the matter to the Hon ble Supreme Court. The Hon ble Supreme Court in the case of CIT vs. Bharati Cellular Ltd.(193 Taxman 97) has observed that the issue can be decided after the expert s opinion on the point whether any human intervention is required for providing interconnected roaming services by other cellular operators. The relevant observations of the Hon ble Supreme Court in para. 7 to 10 are as under: 7. The problem which arises in these cases is that there is no expert evidence from the side of the Department to show how human intervention takes place, particularly, during the process when calls take place, let us say, from Delhi to Nainital and vice versa. If, let us say, BSNL has no network in Nainital whereas it has a network in Delhi, the interconnect agreement enables M/s Bharti Cellular L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r within a period of four months. Such expert(s) will be examined (including cross-examined) within a period of four weeks from the date of receipt of the order of this Court. Liberty is also given to respondent No. 1 to examine its expert and to adduce any other evidence. Thus, the Hon ble Supreme Court directed the AO in each of the cases to examine the technical expert from the side of the department and to decide the matter. Though the AO, while deciding the issue has considered the statement of the expert who was examined in the case of Bharti Cellular, however, we note that in the case of Bharti Hexacom Ltd. (supra), Jaipur Bench of this Tribunal has decided this issue by giving a finding that no intervention is required for providing the roaming facility to the other operators/subscribers. We further note that in the case of Idea Cellular Ltd. vs. ITO (supra) Jaipur bench of the Tribunal again considered an identical issue in paras 2 to 4 as under: 2. The ld. Counsel for the assessee at the outset contends that the issues in question is squarely covered by the Hon ble ITAT, Jaipur Bench decision in the case of M/s Bharti Hexacom Limited Vs. ITO (TDS)-II, Jaipur in ITA No. 65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported the order of the Assessing Officer. 4. We have heard the rival contentions of both the parties and perused the material available on the record. The issue about levy of TDS U/s 194J on the roaming charges paid by the telecom operators to service providers and applicability of Section 194J has been considered in detail by this very Bench in the case of M/s Bharti Hexacom Limited (supra). After considering the issues in detail, it has been held that there is no human intervention involved in providing these services, therefore, roaming charges paid by the assessee do not amount to fee for technical services U/s 194J of the Act read with Section 9(1)(vii). Following our own judgment, we are upholding the order of the ld CIT(A) holding that the assessee is not liable for TDS u/s 194J, interest thereon and consequently not being the assessee in default. The orders of ld. CIT(A) are uphold. Thus it is clear that the Jaipur bench has given a finding of fact that no intervention is required for providing roaming facility and consequently the roaming charges paid by the assessee to other service providers cannot be treated as fees for technical services. Accordingly, following the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance is also placed on the following decisions: 1. Bharat Sanchar Nigam Ltd. [2017] 87 taxmann.com 152 (Delhi - Trib.) 2. Pan AmSat International Systems Inc. [2006] 9 SOT 100 (DELHI ITAT) 3. Asia Satellite Telecommunications Co Ltd [2011] 197 Taxman 263 (Delhi) 4. New Skies Satellite BV [2016] 68 Taxmann.com 8 (Delhi) 5. Neo Sport Broadcast (P.) Ltd. [2019] 107 Taxmann.com 17 (Bombay) 6. Viacom18 Media (P.) Ltd. [2022] 134 taxmann.com 243 (Mumbai - Trib.) - Para 9 page 656 of PB which has followed Bom HC decision in Neo Sports as opposed to earlier ITAT adverse view in own case 7. J P Coats Ltd. No.11/Bang/2014, ITA 382 1493/Bang/2015, 2135/Bang/2016 and 1365- 1367/Bang/2019 8. Engineering Analysis Centre of Excellence (P.) Ltd . [2021] 125 taxmann.com 42 (SC) 3.6 It is submitted by the Ld. AR that the services rendered by the assessee are standard telecom services which are automated, requiring no human intervention. Hence, it is submitted that the same cannot be considered as FTS . Reliance is placed on the decision of Hon ble Delhi Tribunal in the case of Bharat Sanchar Nigam Ltd. reported in [2017] 87 taxmann.com 152. 3.7 The Ld.AR further submitted that, the issue of taxabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r property; (ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property; (iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property;' 5.2.1 The term process used under Explanation 2 to section 9(1)(vi) in the definition of 'royalty' does not imply any 'process' which is publicly available. The term process occurring under clauses (i), (ii) and (iii) of Explanation 2 to section 9(1)(vi) means a process which is an item of intellectual property. Clause (iii) of the said Explanation reads as follows: (iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property Clauses (i) (ii) of the said explanation also use identical terms. 5.2.2 The words which surround the word 'process' in clauses (i) to (iii) of Explanation 2 to section 9(1) (vi), refer to various species of intellectual properties such as patent, invention, model, design, formula, trade mark etc. The expression 'similar property' used at the end of the list, further fort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y itself amount to transfer of any right of exclusive user, so as to render the payment made therefor being regarded as royalty . 5.2.7 It is an admitted fact that there is no transfer of any intellectual property rights or any exclusive rights that has been granted by the assessee to the service recipients for using such intellectual property. Therefore Explanation 2 to section 9(1)(vi) cannot be invoked. 5.2.8 Further we note that by Finance Act, 2012, Explanation 5 6 were added with retrospective effect from 1.6.1976 which reads as under: Explanation 5: For the removal of doubts, it is hereby clarified that the royalty includes and has always included consideration in respect of any right, property or information, whether or not (a) The possession or control of such right, property or information is with the payer; (b) Such right, property or information is used directly by the payer; (c) The location of such right, property or information is in India. Explanation 6: For the removal of doubts, it is hereby clarified that the expression process includes and shall be deemed to have always included transmission by satellite (including up-linking, amplification, conversion for down- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P.)Ltd., would provide the Indian leg of service of using its own network and equipments and network of other domestic operators. Similarly, the international leg of services would be provided by the UK group company using its international infrastructure and equipments. The Cable Wireless Networks India(P.)Ltd., sought for advance ruling in respect of nature of payments made by Cable Wireless Networks India (P.) Ltd., to the UK Group company, whether the payment is taxable as royalty or FTS under section 9(1)(vi)/(vii). The AAR relied on following decisions: Decision of Hon ble Supreme Court in case of BSNL vs. UOI reported in (2006) 3 STT 245 Decision of AAR in case of Dell International Services India Ltd. In.re reported in (supra) Decision of Hon ble Madras High Court in case of CIT vs. Neyveli Lignite Corpn. Ltd. reported in (2000) 243 ITR 459 Decision of coordinate bench of this Tribunal in case of WIPRO Ltd. Vs. ITO reported in (2003) 86 ITD 407. 5.2.13 The AAR relying on its view in case of Dell International Services India Ltd. In., held as under: 12.5 It seems to us that the two expressions 'use' and 'right to use' are employed to bring within the net of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales-tax Acts and the expanded definition of sale contained in clause (29A) of section 366 of the Constitution. The question arose whether a transaction of providing mobile phone service or telephone connection amounted to sale of goods in the special sense of transfer of right to use the goods. It was answered in the negative. The underlying basis of the decision is that there was no delivery of goods and the subscriber to a telephone service could not have intended to purchase or obtain any right to use electro-magnetic waves. At the most, the concept of sale in any subscriber's mind would be limited to the handset that might have been purchased at the time of getting the telephone connection. It was clarified that a telephone service is nothing but a service and there was no sale element apart from the obvious one relating to the handset, if any. This judgment, in our view, does not have much of bearing on the issue that arises in the present application. However, it is worthy of note that the conclusion was reached on the application of the wellknown test of dominant intention of the parties and the essence of the transaction. The word 'use' - what it means: 12.7 Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by another, it is difficult to say that the recipient/customer uses the equipment as such. The customer merely makes use of the facility, though he does not himself use the equipment. 13. It is the contention of the revenue that dedicated private circuits have been provided by BTA through its network for the use of the applicant. The utilization of bandwidth upto the requisite capacity is assured on account of this. The electronic circuits being 'equipment' are made available for constant use by the applicant for transmission of data. The access line is installed for the benefit of the applicant. Therefore, the consideration paid is towards rent for circuits and the physical components that go into the system. It is further contended that rendition of service by way of maintenance and fault repairs is only incidental to the dominant object of renting the automated telecommunication network. 13.1 There is no doubt that the entire network consisting of under-sea cables, domestic access lines and the BT equipment - whichever is kept at the connecting point, is for providing a service to facilitate the transmission of voice and data across the globe. One of the many circuits fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or control or both has been given to the applicant under the terms of the agreement in the course of offering the facility. The applicant is not concerned with the infrastructure or the access line installed by BTA or its agent or the components embedded in it. The operation, control and maintenance of the so called equipment, solely rests with BTA or its agent being the domestic service provider. The applicant does not in any sense possess nor does it have access to the equipment belonging to BTA. No right to modify or deal with the equipment vests with the applicant. In sum and substance, it is a case of BTA utilizing its own network and providing a service that enables the applicant to transmit voice and data through the media of telecom bandwidth. The predominant features and underlying object of the entire agreement unerringly emphasize the concept of service. The consideration paid is relatable to the upkeep and maintenance of specific facility offered to the applicant through the BTA's network and infrastructure so that the required bandwidth is always available to the applicant. The fact that the international circuit as well as the access line is not meant to offer th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Systems Inc., reported in (2006) 9 SOT 100 , Hon ble Delhi High Court distinguished the decision of Asia Satellite Telecommunication Co. Ltd. v. Dy. CITT reported in (2003) 85 ITD 478 and held as under: 19. The question that first comes up for consideration is whether section 9(1)(vi) of the Income-tax Act, read with the Explanation 2 below thereto, is applicable. This also involves the subsidiary question whether the issue is covered by the order of the Delhi Bench of the Tribunal in the case of Asia Satellite Telecommunication Co. Ltd. (supra) which is also a case of a non-resident company based in Hongkong which owned a transponder and allowed it to be used by broadcasters. Both issues are interlinked in the sense that in the above order the Tribunal has held in the context of the provisions of clause (iii) of Explanation 2 below section 9(1)(vi), that a process is involved when the signals that are uplinked through the earth stations to the transponder get converted into different frequencies and fit for being down-linked via earth stations over the footprint area. It was therefore held that the payment was for the use of a process and hence royalty within the meaning of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , trademark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience, including gains derived from the alienation of any such right or property which are contingent on the productivity, use or disposition thereof; and In Asia Satellite Telecommunication Co. Ltd. s case (supra) the Tribunal pointed out, while repelling the argument that the word secret also qualifies the word process appearing in clause (iii) of Explanation 2, that there is no comma after the word secret till the end of the clause and had the intention been to qualify the word process also with the word secret there would have been a comma after the word process (by mistake mentioned in the order as formula ). The Tribunal was thus prepared, with respect, to accept the argument that both the words formula and process can be said to be qualified by the word secret had the clause been drafted as under : the use of any patent, invention, model, design, secret formula or process, or trademark or similar property What the Tribunal has pointed out stands fulfilled in article 12.3(a) of the treaty with USA. From the article quoted above, it may be seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal in the case of Asia Satellite Telecommunication Co. Ltd. (supra) because the view taken by the Tribunal was that there was no requirement in clause (iii) of Explanation 2 below section 9(1)(vi) of the Act that the process involved, for which the payment is being made, should be a secret process. But in the view we have taken on the language employed by article 12.3(a) of the treaty coupled with the punctuation and the setting and surrounding words, the payment would be considered as royalty only if it is made for the use of a secret process. Since there is nothing secret about the process involved in the operation of a transponder, the payment for the use of the process assuming it to be so does not amount to royalty. 5.2.14 Similar issue came up before Hon ble Delhi Tribunal in case of Bharti Airtel vs. ITO (TDS) reported in (2016) 67 taxmann.com 223. The issue considered therein was in respect of payment towards call interconnectivity charged for call transmission on foreign network. The Tribunal therein, on applying ratios pronounced in the above referred decisions, held it not as Royalty . Therefore in our opinion, the Payments made by the assessee in lieu of service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the DTAAS? 3. Whether ITAT was correct in holding that payments made to non-resident telecom operators for providing interconnect services and transfer of capacity in foreign countries is chargeable to tax as royalty in view of the inclusion of the terms right process in the clarificatory Explanation 2, 5 and 6 of Section 9(1)(vi) of the Act, and consequently, appellant was bound to deduct tax at source thereon under Section 195 of the Act? 4. Whether the income tax authorities in India have jurisdiction to bring to tax income arising from extraterritorial source, that is outside India, in respect of business carried on by foreign companies outside India just because Indian residents use and pay for the facilities provided by these foreign companies contrary to the Constitution of India, International Law and Treaties and law declared by the Apex Court? 5. Whether the first respondent was correct in holding that for the current assessment year the withholding tax liability should be levied at a higher rate at 20% in accordance with section 206AA of the Act? 6. Whether the Hon'ble Tribunal was right in repelling the contention of the Appellant to the effect that, as a deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as either Royalty or FTS34 or business profits as no part of the activity was carried out in India. Revenue s reply to his contention is that, the income belongs to the payee. If, in the opinion of assessee, tax was not deductible, he ought to have approached the AO for the nil deduction certificate. It is also the further case of the Revenue that the agreement between assessee and the payee did not specify that income was not taxable. 17. The first question is whether the ITAT was correct in holding that DTAA cannot be considered under Section 201 of the Act. It was argued by Shri. Percy Pardiwala that this issue is covered by the decision in GE Technolgy. We may record that a DTAA is a sovereign document between two countries. In GE Technology, the Apex Court has held as follows: 7. ...While deciding the scope of Section 195(2) it is important to note that the tax which is required to be deducted at source is deductible only out of the chargeable sum. This is the underlying principle of Section 195. Hence, apart from Section 9(1), Sections 4, 5, 9, 90, 91 as well as the provisions of DTAA are also relevant, while applying tax deduction at source provisions. (Emphasis supplied) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Thus the Revenue has reviewed its earlier stand for the subsequent assessment years placing reliance on Viacom etc35, rendered by the ITAT. In that view of the matter this question also needs to be answered against the Revenue. 22. The fourth question is whether the Income Tax Authorities have jurisdiction to bring to tax income arising from extra-territorial source. Admittedly, the NTOs have no presence in India. Assessee s contract is with Belgacom, a Belgium entity which had made certain arrangement with Omantel for utilisation of bandwidth. In substance, Belgacom has permitted utilisation of a portion of the bandwidth which it has acquired from Omantel. It is also not in dispute that the facilities are situated outside India and the agreement is with a Belgium entity which does not have any presence in India. Therefore, the Tax authorities in India shall have no jurisdiction to bring to tax the income arising from extraterritorial source. 23. The fifth question is whether the Revenue is right in holding that withholding tax liability should be levied at a higher rate. It was contended by Shri. Pardiwala that this issue is covered in assessee s favour in CIT Vs. M/s. Wipro36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly applicable. This would mean that the word 'technical' would take colour from the words 'managerial' and 'consultancy', between which it is sandwiched. A managerial service would be one which pertains to or has the characteristic of a manager. It is obvious that the expression (manager' and consequently (managerial service' has a definite' human element attached to it. To put it bluntly, a machine cannot be a manager. The service of consultancy also necessarily entails human intervention. The consultant, who provides consultancy service, has to be a human being. A machine cannot be regarded as a consultant. From the above discussion, it is apparent that both the words 'managerial and 'consultancy' involve a human element. And, both, managerial service and consultancy service, are provided by humans. Consequently, applying the rule of noscitur a soccis, the word 'technical' as appearing in Expln. 2 to s. 9(1)(vii) would also have to be construed as involving a human element. But, the facility provided by MTNL/ other companies for interconnect/ port access is one which is provided automatically by machines. It is independently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strued as involving a human element The expression 'technical service' would have reference to only technical service rendered by a human. MTNL or other companies do not provide any assistance to the assessee in managing, operating, setting up their infrastructure and networks. No doubt, such a facility is 'technical' in the sense that it involves sophisticated technology and may even be construed as 'communication service' but while interpreting the entire expression 'technical service', the individual meanings of the words 'technical' and 'service' have to be shed and only the meaning' of the whole-expression 'technical services' has to, be seen. The services rendered qua interconnection/port access do not involve any human interface and, therefore, the same cannot be regarded as 'technical services' as contemplated under s. 194J. 28. The phraseology of Fees for Technical Services covers only such technical services provided for Fees. There should be a direct co-relation between the Services which are on technical nature and the consideration received in lieu of rendering the services. The services can be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appens if a situation arises where a service provider's allotted capacity gets exhausted and it wants, on an urgent basis, additional capacity ? Whether at that stage, any human intervention is involved is required to be examined, which again needs a technical data. We are only highlighting these facts to emphasise that these types of matters cannot be decided without any technical assistance available on record. There is one more aspect that requires to be gone into. It is the contention of Respondent No.1 herein that Interconnect Agreement between, let us say, M/s. Bharti Cellular Limited and BSNL in these cases is based on obligations and counter obligations, which is called a revenue sharing contract . According to Respondent No.1, Section 194J of the Act is not attracted in the case of revenue sharing contract . According to Respondent No.1, in such contracts there is only sharing of revenue and, therefore, payments by revenue sharing cannot constitute fees under Section 194J of the Act. This submission is not accepted by the Department. We leave it there because this submission has not been examined by the Tribunal. In short, the above aspects need reconsideration by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsultancy services . Hence, there should be involvement/ presence of human element for coming to a conclusion that technical services can be said to have been rendered in terms of Explanation 2 to Section 9(1)((vii) of the Act. In our view the Hon'ble Supreme Court of India has approved the proposition laid down by the Hon'ble High Court, that this is a service and that if would be FTS as defined u/s 9(1)(vii) if there is human interference in such communication service. Hence the issue to be considered is narrow and based on evidence collected by the Revenue post the Hon'ble Supreme Court judgment. All other issues are no more res-integra. 29.2 This aspect as to whether a human element is involved in such interconnect services or not, has been examined by different Benches of the Tribunal based on the evidence collected by the AO in the above stated set-aside proceedings. The facts that are on record are the same as the facts and evidence which have been examined by various Coordinate Benches of the Tribunal. These include the statement of experts recorded by the Assessing Officer and the cross examination done by the Representative of the Company. For the sake of brev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on but after 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 Rs. 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. 31. The AO as well as the Ld. CIT(A) has recorded that there is no human intervention when the call is successfully completed. It is also not disputed that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is required for taking necessary corrective actions. In view of the above, once configuration was made, no human intervention is required for connecting roaming calls. The subscriber can make and receive calls, access and receive data and other services without human intervention. Like any other machinery, whenever the system breakdown, to set right the same, human intervention is required. However, for connecting roaming call, no human intervention is required except initial configuration in system. This Tribunal is of the considered opinion that human intervention is necessary for routine maintenance of the system and machinery. However, no human intervention is required for connecting the roaming calls. Therefore, as held by the Apex Court in Bharti Cellular Limited (supra), the roaming connections are provided without any human intervention and therefore, no technical service is availed by the assessee. Therefore, TDS is not required to be made in respect of roaming charges paid to other service providers. 33. All the Benches of the Tribunal are unanimous in their view on this issue. We see no reason whatsoever to deviate from these views. Hence consistent with the view tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tandard facility provided to all those willing to pay for it. Applying the proposition laid down in this case law to the facts of this case, we have to hold that inter connection facility and the service of the FTO in picking up, carrying and successful termination the call over their respective network is a standard facility and the and FTO in question does not render any technical services to the assessee under interconnect agreement. 36. The Hon'ble High Court of Delhi in the case of CIT vs. Estel Communications (P) Ltd. (2008) 217 CTR (Del) 102 held as follows:- Tribunal considered the agreement that had been entered into by the assessee with T and came to the conclusion that there was no privity of contract between the customers of the assessee and T. In fact, the assessee was merely paying for an internet bandwidth to T and then selling it to its customers. The use of internet facility may require sophisticated equipment but that does not mean that technical services were rendered by T to the assessee. It was a simple case of purchase of internet bandwidth by the assessee from T. Under the circumstances, the Tribunal came to the conclusion that there were no technical ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside India cannot be considered as 'fees for technical services' under s. 9(l)(vii), more so when similar services offered by VSNL is not regarded as technical services - Further, no process has been made available to the assessee - Hence, there is no question of applicability of s. 9(l)(vi) too-So long as the amount paid is not taxable under the Act, the clause in the DTAA cannot bring the charge-Hence, there was no liability to deduct tax under s. 195 39. In view of the above discussions, respectfully following the binding judgment of the Hon'ble Supreme Court of India, we have no hesitation in upholding the submissions of the Ld. Counsel of the Assessee that, the payment in question cannot be considered as Fee for Technical Services in terms of section 9(1)(vii) read with Expln. 2 of the Act. 45. Issue No. 2: WHETHER THE PAYMENT TO FTOS FOR 'IUC'S ARE IN THE NATURE OF ROYALTY UNDER SECTION 9(1)(vi) OF THE ACT. 46. The specific charge of the AO is that taking up a call by the FTO from the assessee is a use of 'process' and hence the payment for the same is Royalty in terms of Clause (iii) of Explanation 2 to Section 9(1)(iv) of the Act. 47. We analy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he DTAA royalty has a much restricted meaning. f) Without prejudice to the above findings, even if the payments partake the character of royalty after retrospective amendment in the Act, the assessee cannot be held to be an assessee in default in respect of those payments made prior to the amendment, as brought out in the Finance Act, 2012. g) The obligation imposed upon the assessee u/s. 195 to deduct tax specifies that it should be at the time of credited of such income to the account or at the time of payment thereof whichever is earlier and both these events had taken place much prior to the amendment brought in by the Finance Act. 48. We uphold the finding of the 1st Appellate Authority for the following reasons. The AO has taken a contradictory stand that the payments in question may be treated as royalty for use of process in terms of Section 9(1)(vi) of the Act, if in case the Appellate Authorities hold that the payment to FTOs are in the nature of Fee for Technical Services . As the AO has held that the payment in question is royalty, as it is for the use of process , as per clause (iii) to Explanation 2 to Section 9(1)((iv) of the Act, we restrict our finding to this issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship or agency relationship between the Parties. The parties are entering into this agreement on a principal to principal basis. Each Party acts in its own name and operates for its own benefit and risk while performing its obligations under this Agreement. 1.3 Neither of the Parties hereto shall have any rights in the equipments or in the network of the other Party (eg. liens or pledges). Each Party is and remains responsible for its network and for the provision of services relating to it, unless specifically stated otherwise in this Agreement. 3. Definition of Services The Parties shall connect, and keep connected, for the duration of this agreement, their systems at Points of Interconnection (POI) in order to convey calls to and from those systems and to provide voice Services to each other in accordance with this Agreement and as specified in the Schedules hereto. 5. Technical Standards and Interconnection 5.1 ....................... 5.2 Each Party shall at its own cost, unless otherwise agreed, be responsible for providing, installing, testing, making operational and maintaining all equipment on its side of each Point of Interconnection (POI) as defined in the TFD. 5.3....... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the RECIPROCAL TELECOMMUNIA TIONS SERVICES AGREEMENT entered into between AIRTEL TANZANIA LIMITED ('AIRTEL ) and BHARTI AIRTEL LTD. ('Bharti ) effective as of SERVICES Bharti will terminate international telecommunications traffic (IDD type), which AIRTEL has delivered to one of Bharti's interconnection locations to those Destinations as agreed from time to time. ANNEX 3 [AIRTEL TANZANIA LIMITED, VOICE TERMINATION SERVICES, THIS ANNEX for domestic and International Telecommunication Services is subject-to the terms and conditions of the RECIPROCAL TELECOMMUNIATIONS SERVICES AGREEMENT entered into between AIRTEL TANZANIA LIMITED ('AIRTEL ) and BHARTI AIRTEL LTD. ((Bharti ) effective as of SERVICES AIRTEL will terminate international telecommunications traffic (IDD Type), which Bharti has delivered to one of AIRTEL'S interconnection locations to those international Destinations. 51. A perusal of these agreements demonstrate that, each party under the agreement remains responsible for its own network and for the provision of services related to it. The Telecom Operator provide connecting, transit and termination services to each other on a reciprocal basis and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Intellectual property includes brand names, discoveries, formulas, inventions, knowledge, registered designs, software, and works of artistic, literary, or musical nature. It is one of the most readily tradable properties in the digital marketplace. [as per definition provided in BusinessDictionary.com] 53. The term process is therefore to be understood as an item of intellectual property resulting from the discovery, specialized knowledge, creative ideas, or expressions of human mind having a commercial value and not widely available in public domain. It is therefore an intangible asset, the exclusive right over which normally rests with its developer / creator or with the person to whom such asset has been exclusively transferred. In order to receive a 'royalty' in respect of allowing the usage or right to use any property including an intellectual property, the owner thereof must have an exclusive right over such property. As far as intellectual properties (IPs) are concerned, these have significance for the purpose of 'royalty' only till the time the ownership (as differentiated from the right to use) of such property vests exclusively with a single person and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses not to make such specialised knowledge public. It is also conceivable that such a person can exploit and utilise such specialised knowledge in the same way as a person holding a patent or owning a mineral right or having the copyright of a publication to allow a limited user of such specialised knowledge to others in confidence against payment. There is no reason why payment for the user of such specialised knowledge, though not protected by a patent, should not be treated as royalty or in the nature of royalty.-Handley Page us. Butterioorth. 19 Tax Cases 322 relied on. Thus, the term 'royalty' connotes exclusivity and the exclusive right in relation to the thing (be it physical or intellectual property) for which royalty is paid should be with the grantor of that right. In case an intellectual property, it is generally associated with some discovery, invention, creation, specialized knowledge etc. emanating from human mind and is payable to the inventor / creator for allowing the usage of his invention or creation and having an exclusive right over it. The Hon'ble Calcutta High Court in the case of NV Philips Gloeilampenfabrieken Eindhoven Vs. CIT (Supra) held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess or person enjoying exclusive ownership of such process. The owner of the 'process' might grant the 'use' or right to sue to different persons at the same time, but the exclusivity of the ownership should be with the grantor. The royalty is paid for the use of the 'process' as an item of IP by the manufacturing company in contradistinction to the equipments or resources deployed in the execution of such 'process'. The payer must therefore use the IP on its own and bear the risk of its exploitation. If the IP is used by the owner himself and he bears the risk of exploitation or liabilities for the use, then as the owner makes own entrepreneurial use of the IP the income would fall under the scope of Business Income and not royalty . A 'process' which is widely known and deployed by everyone in the field and for which the owner does not have exclusive rights cannot be a process contemplated in this Section 9(1)(vi) Explanation (iii). 54.2 In the case of telecom industry, all the telecom operators have similar infrastructure and telecom networks in place, for rendition of telecommunication services. The process embedded in the networks of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices to the subscribers, as well as interconnecting telecom operators with the aid of their network and the process embedded therein. This is a standard facility which is used by the FTO itself. Thus the insertion of Explanation 6 to Section 9(1)(vi) does not alter the decision taken by us on this issue. 56. As far as the insertion of Explanation 5 to Section 9(1)(vi) is concerned, we hold that this Explanation comes into play only in case of Royalty falling within the ambit of Section 2 of Section 9(1)(vi). When a process is widely available in the public domain and is not exclusively owned by anyone the it cannot constitute an item of intellectual property for the purpose of charge of Royalty under clauses (i), (ii) and (iii) of Explanation 2 to Section 9(1)(vi). Hence, the criteria of possession, control, location indirect use etc., as explained by Explanation 5 has no effect in the case in hand. 57. The arguments of the Ld. DR that Explanation 5 is attracted since the assessee company is indirectly using such equipment and process through the services provided by the FTO, in our view is devoid of merits. There is difference between the services rendering agreements and royalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia, Canada, France, Israeal, Netherlands, Portuguese, Republic, Singapore, Spain, Sweden, United Kingdom, United States of America, Bangladesh, Indonesia, Mauritius, Nepal, Philippines, Saudi Arabia, Sri Lanka, Thailand, UAE etc. India has Double Taxation Avoidance Agreements with all the aforesaid countries. 59.3 The definition of 'royalties' (simply referred to as 'royalty' under the Income-tax Act, 1961) is mostly contained in Articles 12 13 of the DTAAs between India and the aforesaid countries. The definitions of 'royalties' contained in the Treaties with the aforesaid countries are almost pari materia insofar as the royalty is for 'use of process' is concerned. We quote from Article 13(3) of Indo-UK treaty defining the term 'royalties' hereunder: 3. For the purpose of this Article, the term (royalties' means: (a) payments of any kind received as a consideration for the use of, or the right to use, any copyright of a literary, artistic or scientific work, including cinematography films or work on films, tape or other means of reproduction for use in connection with radio or television broadcasting, any patent, trademark, design or mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that, all the treaties use the expression 'secret formula or process' is separated by a comma before and after the expression. This implies that formula/ process is a part of the same group and the adjective 'secret' governs both. Thus, under the treaties, in order to constitute royalty for use of or the right to use of a process, the process has to be 'secret'. In the case of telecom industry, however, telecommunication services as already observed by us are rendered through standard facilities and no 'secret process' is involved. 60. A perusal of the wording of these Treaties show that only payments received as consideration for the use of , or the right to use is necessary for the payment to be termed as Royalty. This is much narrower to the definition of royalty under the Act. As held by the Ld. CIT(A) there is no use of or right to use of any process in the facts and circumstances of the case on hand and hence, even under the DTAA s, the payment in question cannot be termed as royalty. 60.1 The Hon ble High Court of Delhi in the case of Asia Satellite Telecommunications Co. Ltd. vs. Director of Income Tax (2011) 332 340 considered this issue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grammes in India, even when they were uplinked and relayed outside, India, that would not mean that the assessee was carrying out its business 'Operations in India. The expressions operations and carried out in India'' occurring in Explanation l(a) to section 9(1)(i) signify that it was necessary' to establish that any part of the assessee s operations were carried out in India. No machinery or computer was installed by the assessee in India through which the programmes reached India. The process of amplifying and relaying she programmes was performed' in the satellite which was not situated in Indian airspace. Even the tracking, telemetry and control operations to be performed outside India in Hong Kong. There was no contract or agreement between the assessee either with the cable operators or viewers for reception of signals in India. Thus, section 9(1)(i) was not attracted. (ii) 'That the process of transmission of television programmes started with television channels (customers of the assessee) uplinking the signals containing the television programmes ; thereafter the satellite received the signals and after amplifying 'and changing their frequency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of royalty as defined in Explanation section 9(1)(vi) of the Act. Article 12 of the model double taxation avoidance agreement framed by the Organisation of Economic Co-operation and Development contains a definition of royalty which is in all respects virtually the same as the definition of royalty contained in (iii) of Explanation 2 to section 9(1)(vi) of the Act. The commentary by the OECD can be relied upon. (iv) That the Tribunal rightly admitted the additional ground question of applicability of section 9(1)(vii) on the ground that it was legal and did not require consideration of any fresh facts, as all necessary for adjudication whether the amount received was chargeable to tax section 9(1)(vii) were available on record. However, no arguments been advanced by the Department on this ground, it had to be presumed that the case was not sought to be covered under this provision. 61. In the case of DCIT vs. PanAmSat International Systems Inc. (2006) 103 TTJ 861 (Del) the Tribunal has held as under:- There is a ''process'' involved in the activity carried on by the assessee. There is a comma after the words secret formula or process in art. 12.3(a) of Indo-US D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer. If the patent did not ensure to the assessee, how the assessee could have, even in the wildest of imaginations, let the broadcasters use the same for consideration. The argument sought to be made is factually not borne out. There is not on iota of evidence to show that the assessee had any patent to the satellite or transponder which it allowed the broadcasters to use for a consideration. (Para 21) 62. In the case of Cable Wireless Networks India (P) Ltd. in re (2009) 315 ITR 0072, the AAR held as under:- Cable Wireless Networks India (P) Ltd.; In Re (2009) 315 ITR 0072: Held that Payment made by applicant to the UK company for providing international leg of the services in transmitting voice/data to places outside India using its international infrastructure and equipments is neither royalty nor fees for technical services; payment is in the nature of business profits and in the absence of PE of UK company in India, same is not taxable in India. Further, at paras 8.1 to 8.3, the Hon'ble AAR held as under: No material has been placed to show that C W UK uses any secret process in the transmission of the international leg of the service, or that the applicant pays to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 370, relied on. 64. Recently, the Hon ble Delhi High Court in the case of DIT vs. New Skies Satellite BV Ors. In ITA No. 473/2012 Ors. Vide judgment dated 8.2.2016 has held as under:- 39. It is now essential to decide the second question i.e. whether the assessee s in the present case will obtain any relief from the provisions of the DTAAs. Under Article 12 of the Double Tax Avoidance Agreements, the general rule states that whereas the State of Residence shall have the primary right to tax royalties, the Source State shall concurrently have the right to tax the income, to the extent of 15% of the total income. Before the amendment brought about by the Finance Act of 2012, the definition of royalty under the Act and the DTAAs were treated as pari materia. The definitions are reproduced below: Article 12(3), Indo Thai Double Tax Avoidance Agreement: 3. The term royalties as used in this article means payments of any kind received as a consideration for the alienation or the use of, or the right to use, any copyright of literary, artistic or scientific work (including cinematograph films, phonographic records and films or tapes for radio or television broadcasting), any patent, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e terms of an international treaty. In other words, a clarificatory or declaratory amendment, much less one which may seek to overcome an unwelcome judicial interpretation of law, cannot be allowed to have the same retroactive effect on an international instrument effected between two sovereign states prior to such amendment. In the context of international law, while not every attempt to subvert the obligations under the treaty is a breach, it is nevertheless a failure to give effect to the intended trajectory of the treaty. Employing interpretive amendments in domestic law as a means to imply contoured effects in the enforcement of treaties is one such attempt, which falls just short of a breach, but is nevertheless, in the opinion of this Court, indefensible. 64.1 After considering the Vienna Convention on the Law of Treaties, 1969 (VCLT) and the judgments of the Hon ble Supreme Court of Canada and other precedents, the Hon ble High Court further has held as under :- 60. Consequently, since we have held that the Finance Act, 2012 will not affect Article 12 of the DTAAs, it would follow that the first determinative interpretation given to the word royalty in Asia Satellite59 , wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposition laid down in judgment of the Jurisdictional High Court in the case of the assessee itself where it is held that the payment was for service and this necessarily excludes the possibility of the payment being held as that which is made for Royalty, as both are contradictory position. This decision has been affirmed by the Hon ble Supreme Court. Thus, we follow the binding decision of the Jurisdictional High Court in the matter and uphold the finding of the Ld. CIT(A). 67. Similarly, the reliance placed by the Ld. DR on the judgment of the Hon ble Madras High court in the case of Verizon Communications Singapore Pte. Ltd. vs. ITO (International Taxation) reported in (2014) 361 ITR 0575 is also misplaced for the following reasons:- (a) M/s Verizon Communications received International Private Leased Circuit charges from customers for providing point to point dedicated private line to communicate between offices that are geographically dispersed throughout the world, the said case the bandwidth capacity was dedicated for the use of the Indian customer irrespective of actual usage. In the case of the present assessee, no such point to point dedicated private line was made ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he light of provisions of law and the decisions cited before us. The precise controversy before us is whether or not the payment of roaming charges made by assessee to OTOs constituted FTS or Royalty so as to attract TDS u/s 194J? After a careful consideration, we find that it is vehemently held in various decisions, as narrated above, that such payment of roaming charges is neither in the nature of FTS nor Royalty and hence did not require TDS u/s 194J. Therefore, respectfully following the orders of different appellate forums, we are of the view that the assessee cannot be held as assessee-in-default for non-deduction of tax at source out of payment of roaming charges. Accordingly, the grounds of assessee are allowed. Ground No. VII: 16. This ground reads as under: GROUND VII; INTEREST LEVIED U/S 201(1A) OF THE ACT FOR ALLEGED NON-DEDUCTION OF TAX U/S 194H AND 194J OF THE ACT. 1. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in levying the interest u/s 201(1A) of the Act. 2. The Ld. CIT(A) failed to appreciate and ought to have held that: i. When the recipient of income claims the refund of taxes paid by them or files the loss return o ..... 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