Income Tax Appellate Tribunal - Chandigarh
Vodafone South Limited, Mohali vs Assessee on 6 August, 2015
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IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES, CHANDIGARH
BEFORE SHR I BHAVNESH SAINI, JUDIC IAL MEMBER AND
SHRI T.R. SOOD, ACCOUNTANT MEMBER
ITA Nos. 610 to 614/Chd/2013
Assessment Years:2006-07 to 2010-11
Vodafone South Limited, Vs. The CIT(TDS)
(Formerl y Vodafone Essar South Limited) Chandigarh
Mohali
PAN No. AABCB5847L
(Appellant) (Respondent)
Appellant By : Sh. Salil Kapoor
Respondent By : Dr. Amarveer Singh
Date of hearing : 09/07/2015
Date of Pronouncement : 06/08/2015
ORDER
PER T.R.SOOD, A.M.
These appeals by the Assessee are directed against the orders passed by CIT(TDS), Chandigarh dated 30.3.2013.
2. In all these appeals common issues have been raised, therefore, all appeals were heard together and are being disposed of by this common order.
3. First we shall deal with ITA No. 610/Chd/2013, wherein the assessee has raised the following grounds:-
"1. On the facts and circumstances of the case and in law, the notice issued under section 263 of the of Income Tax Act, 1961 ('Act') by the learned Commissioner of Income Tax (TDS), Chandigarh (hereinafter referred to as the 'learned CIT(TDS)') and the order passed under section 263 of the Act are illegal, bad in law and without jurisdiction.2
2. On the facts and in circumstances of the of the case and in law, the learned CIT(TDS) erred in assuming the jurisdiction under section 263 of the Act since:-
2.1 the revisionary proceedings under section 263 of the Act have merely been initiated on the basis of the letter received from Assistant Commissioner of Income Tax (TDS), Chandigarh ('ACIT') and the CIT(TDS) did not arrive at any independent satisfaction for initiation of such proceedings. 2.2 by acceding to the request of the learned ACIT, the CIT(TDS) has effectively enhanced the time limitation prescribed under section 201(3) of the Act for completion of 201 proceedings by a TDS officer.
2.3 the order passed by the learned ACIT is neither 'erroneous' nor 'prejudicial' to the interest of the revenue since the learned ACIT took one of the two permissible views after conducting a detailed enquiry in respect of various expenses incurred by the Appellant.
3. On the facts and circumstances of the case and in law, the order passed by the learned CIT(TDS) under section 263 of the Act is bad in law and void ab-intio, since the learned CIT has completely ignored the fact that the arrangement between Appellant and the pre-paid distributors during the subject FY was on a 'principal to agent' basis and the Appellant had duly deducted tax u/s 194H of the Act on the commission paid to the pre-paid distributors.
4. Brief facts of the case are that a proposal was put up by ACIT (TDS) Chandigarh before the Commissioner for revising the order u/s 263. On the basis of proposal, Ld. Commissioner issued a show cause notice to the assessee pointing out that issue regarding TDS on commission paid in view of section 194H was not considered by AC IT (TDS). The assessee was provided with an opportunit y of being heard. In response, the assessee filed a detailed repl y which has been reproduced by Ld. Commissioner at pages 2 to 8 of his order. In this repl y it has been submitted that for exercising power u/s 263 it has to be established that order passed by the authorit y is erroneous as well as prejudicial to the interest of Revenue and has led to loss to the Revenue. Since these ingredients are not there, therefore, no revisionary order u/s 263 can be passed. Ld. Commissioner 3 examined these submissions and did not find force in the same for which he has given the following reasons:
1. "That on examining an scrutiny of the assessment record, I find that the assessing officer has omitted to have dealt with the issue of discount/commission paid on prepaid/recharge vouchers liable for TDS us 194H of the I.T. Act. This fact has been admitted by the Assessing Officer himself who passed order u/s 201(1)/201(1A) for all these years. Therefore, the orders passed by the AO are erroneous. Since, the AO has not deemed the assessee an assessee in default for not having deducted TDS on the payments made as discount/commission to the vendors against prepaid sim cards/recharge vouchers, despite the fact that on the postpaid sim cards the assessee has been deducting tax at source 194H and also having not charged the mandatory interest u/s 201(1A) for not deducting tax at source on the deductible amount paid by way of discount/commission to the vendors. Hence, the orders passed for all these years by the AO are prejudicial to the interest of revenue. I am, therefore, satisfied that the provisions of section263 of I.T. Act, 1961 are attracted for all these years.
2. The reliance place by the assessee on the decisions of the Hon'ble Courts are also distinguishable on facts and issues, hence not applicable tot the present case as the Assessing Officer in this case has not taken any view and decision at all on this issue, hence the question of two possible views does not arise. Conversely, it is a case where assessing officer, who passed the order u/s 201(1)/201(1A), himself admitted the fact of having omitted this issue of the assessee being liable for deducting tax at source u/s 194H of the I.T. Act on the discount/commission paid to the vendors on prepaid sim cards / recharge vouchers.
3. The claim of the assessee that discount/commission paid to vendors against prepaid sim cards/recharge vouchers are not liable for TDS u/s 194H of the I.T. Act is also not correct and acceptable for the reason that the Hon'ble High Court of Delhi in the case of Idea cellular has held that discount paid to the vendors on prepaid sim cards/ recharge vouchers are in the nature of commission attracting provisions of sections 194H of the I.T. Act, 1961."
It view of the above the order passed by ACIT (TDS) u/s 201(1) read with Section 20(1A) was held to be erroneous and prejudicial to the interest of Revenue. The same was set aside with a direction to Assessing Officer to examine the default of the assessee to the extent of not deducting tax at source on discount / commission paid to the vendors against pre paid sim card / recharge voucher during these years.
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5. Before us Ld. Counsel for the assessee referred to page 1 of the paper book, which is copy of the notice issued by the Income Tax Officer (HQ). He pointed out that in this notice it has been mentioned that proposal has been put by AC IT (TDS) u/s 263 because issue of TDS on prepaid sim card u/s 194H was omitted to be verified. He submitted this is totall y wrong and in this regard he referred to the order passed u/s 201 and referred to first para of the order and pointed out that it has been clearl y mentioned that from the details furnished by the assessee- deductor company that the person responsible of the assessee company has not deducted the tax at source from the payment made towards commission / incentive of pre paid cards as required u/s 194H. From this observation, it becomes clear that issue was dul y examined by the ACIT (TDS). He further submitted that under section 263 the Commissioner was required to indicate in the notice that order passed by the lower authorities was erroneous and prejudicial to the Revenue but no such mention has been made in the notice. Therefore, notice was without jurisdiction and in this regard he referred to the decision of Lucknow Bench of the Tribunal in the case of Jheendu Ram vs CIT 130 TTJ 82 (Luck.). He particularly referred to the observations made in para 4 which contain the submissions to the same effect and the findings were recorded in para 6 which he read out.
6. He further submitted that reading of the notice would show that same has been signed by the ITO, HQ whereas the requirement of law is that notice should have been signed by the Commissioner because power u/s 263 vests with him. He contended that similar view was taken by the Chandigarh Bench of the Tribunal in the case of Nand Parkash & Co. Vs. ITO 38 ITD 1(Chd). In this regard he read out para 9 of this judgement.
7. The Ld. counsel pointed out that order u/s 201(1) has been passed on 24.3.2011, on that date there was a precedent already available in case of AC IT (TDS) Vs. Idea Cellular Ltd., 125 ITD 222 (Hyd.) where it was held that 5 provisions of section 194H were not applicable in case of sale of sim cards / recharge cards by the Cellular Operator companies. Therefore, at the time of framing of the order it was possible to take a view that provisions of section 194H are not applicable. Once a possible view has been taken then such an order cannot be called erroneous or prejudicial to the interest of Revenue and in this regard he relied on the decision of Hon'ble Supreme Court in the case of Malabar Industries Co Ltd Vs. C IT 243 ITR 83 (SC) and C IT Vs. Max India Ltd 295 ITR 283 (SC).
8. The Ld. Counsel further contended that Commissioner has no power to pass an order beyond the issues raised in notice and in this regard he relied on the decision of Hon'ble Punjab & Haryana High Court in the case of CIT Jagadhri Electric Suppl y and Industrial Co. 140 ITR 490 (P&H). However, when Ld. Counsel was confronted by the Bench that how the Ld. Commissioner has travelled beyond the notice, he simpl y stated that in the notice it has been stated that issue regarding deduction of tax u/s 194 'was omitted to be verified' whereas in para 1 of his finding at page 8 the Commissioner states that Assessing Officer has 'omitted to have dealt with the issue' of discount commission paid on prepaid / recharge vouchers liable for TDS u/s 194 H of the I.T. Act. According to him there is a lot of difference between 'verify' and 'omitted'.
9. On the other hand Ld. DR submitted that there is no need to issue any notice before assuming jurisdiction u/s 263 of the Act. He contended that Assessing Officer has simpl y set up a preamble in the order u/s 201 regarding non deduction of tax u/s 194H but no query was raised in this regard and no replies were file. Therefore, it is a clear case of non application of mind by the Assessing Officer. Once this defect was noticed, the Assessing Officer put up a proposal for revision u/s 263 of the Act which was examined by the Commissioner and then he directed to issue a notice. In this regard he filed copies of the noting sheets from the folder of the Commissioner which shows that proposal was approved on 26.4.2012. As far 6 as the date of notice is concerned, it is a normal practice with the lower staff to prepare all the papers including notice before putting up before the senior officer and notice was prepared on 23.4.2012 but the same was dispatched later on after approval of the Commissioner was obtained.
10. He contended that there is no force in the submissions that Assessing Officer has taken one of the possible views. Firstl y, the Assessing Officer has not examined the issue of deduction of tax from the commission paid on prepaid / recharge vouchers on which TDS was liable to be deducted u/s 194H. In any case the decision in the case of Idea Cellular Ltd Vs. DC IT which was decided by the Tribunal on 28.3.2008 by Delhi Bench was reversed by Hon'ble Delhi High Court on 19.2.2010 which is reported in CIT Vs. Idea Cellular Limited 325 ITR 148(Delhi). One more High Court i.e. Hon'ble Kerela High Court has also held in the case of Vodafone Essar Cellular Ltd v ACIT (TDS) 332 ITR 255 (Ker) that TDS was required to be deducted on discount given to the distributor on sale of sim card / recharge coupons. This decision was also rendered on 17.8.2010. The order u/s 201 was finall y passed on 24.3.2011 which means that both the decisions on the date of order were against the assessee and, therefore, the view that no TDS is required to be made was not a possible view.
11. We have considered the rival submissions carefull y in the light of the material available on record and the decisions cited by both the parties. We are unable to agree with the submissions of Ld. Counsel for the assessee. Section 263(1) which gives revisionary power to the Commissioner reads as under:-
"263 (1) : The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the 7 circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment."
12. The careful reading of the provision would show that there is no requirement of giving any notice before assuming the jurisdiction under this provision. This position has been clarified by Hon'ble Supreme Court in the case of CIT v Electro House 82 ITR 824 (SC). The head noted of the decision reads as under:-
"Unlike section 34, section 33B of the Income-tax Act, 1922, does not require any notice to be issued by the Commissioner before he assumes jurisdiction to proceed to revise an order passed by the Income-tax Officer. The jurisdiction of the Commissioner to proceed under section 33B is not dependent on the fulfilment of any condition precedent. He is not required to give any notice before commencing the inquiry. All that he is required to do, before reaching his decision and not before commencing the inquiry, is to give the assessee an opportunity of being heard and make or cause to make such inquiry as he deems necessary. These requirements have nothing to do with the jurisdiction of the Commissioner. They pertain to the region of natural justice. Breach of the principles of natural justice may affect the legality of the order made but that does not affect the jurisdiction of the Commissioner."
The above decision makes it absolutely clear that there was no requirement of giving any notice and, therefore, there is no merit in the contention pointing to various defects in the notice. No doubt this decision was rendered u/s 33B of the old Act i.e. Income Tax Act, 1922. Section n 33B of this old Act reads as under:-
" The Commissioner may call for and examine the record by any proceeding under this Act and if he considers that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment."8
A careful reading of section 33B of the old Act along with section 263(1) of the new Act i.e. Income tax Act, 1961 would show that provision is identical. The onl y difference is that instead of expression 'Income tax officer' used in the old Act, expression 'Assessing Officer' is used in the new Act. Therefore, this decision is clearl y applicable with reference to the new Act also.
13. Further to above, while commenting on this issue in the Commentary of 'Law of Income Tax' by Sampath Iyenger, Ld. author has commented the following on this aspect:-
"53. Natural Justice': Principles of natural justice are generally invoked in attacking the orders of Commissioner under this section the Supreme Court has held in several cases that concepts of natural justice have undergone vital change and that the distinction between "administrative orders" and quasi-judicial order" is so thin that it has almost vanished in recent times. Rules of natural justice are not embodied rules, and they depend on the facts and circumstances of each case. "This principle of what is called 'natural justice' may be burdensome to some minds, but this price - a small price - has to be paid if we desire a society governed by law". A quasi-judicial body may not be required to hold an enquiry in all cases but it will be clear breach of natural justice if it does not inform the party and give him a chance of dealing with it. It is the duty of a quasi-judicial authority like the Commissioner of Income-tax acting under section 263 to inform he assessee of the evidence sought to be relied on and give him an opportunity to meet the case. If the Commissioner acts upon information collected by him which he has not disclosed to the assessee or to the party concerned, and in respect of which full opportunity of meeting the inferences which arise out of it has not been given, it would be a clear breach of natural justice. In Wiseman v Borneman' Lord Denning. M R, held that for the purpose of just determining whether there is a prima facie, case or not and for arriving at a sort of preliminary decision, principles of natural justice are not applicable. There is a great difference between a 9 Tribunal which has to decide the rights and wrongs of the parties and one which has to just determine simply whether there is or there is not a prima facie case.
Applying the above principles to the procedure under section 263, the Commissioner would be justified in initially issuing a notice to the assessee on a prima facie or tentative impression he may not formed on the materials he had collected; but certainly principal of natural justice would be violated if, before forming his final conclusion and before his passing the final order, under section 263, he does not place all the materials he has gathered before the assessee and give him a full chance of rebutting or explaining. In CIT v Electro House, the "Supreme Court held that section 263 (unlike section 148 corresponding to section 34 of 1922 Act) does not require any notice to be issued by the Commissioner before he assumes jurisdiction to the Commissioner to proceed under section 263 is not dependent on the fulfillment of any condition precedent. He is not required to give any notice before commencing the enquiry. All that he is required to so, before reaching opportunity of being heard and make or cause to make such enquiry as he deems necessary. The Supreme Court held that these requirements have nothing to do with the jurisdiction of the Commissioner, they pertain to the region of natural justice; breach of principles of natural justice may affect the legality of the order made by the Commissioner, but does not affect the jurisdiction of the Commissioner. The Supreme Court refrained from spelling out what principles of natural justice should be observed in an enquiry under this section."
Therefore, from the above it becomes absolutel y clear that no notice etc. is required to be issued before assuming jurisdiction u/s 263. The onl y requirement is that an opportunity of being heard be provided to the assessee.
14. As far as opportunity of being heard is concerned, it emanates from the first principles of natural justice i.e. audi altern partem in simple English it would 10 mean that nobody should be hanged without being heard. This principle has been incorporated in this section so as revisionary order should be passed after considering the contentions of the other part y. Now as far as opportunit y of being heard is concerned, we do not think that it is necessary that Commissioner himself shall sign the communication of giving such opportunit y for example all the High Courts and Supreme Court dealing with a particular petition, simpl y pronounce in the Court 'issue notice'. It does not mean that Ld. Judges are required to sign all such notices and that work is done by the Registry of the High Court or Supreme Court. In view of the above position, we are of the opinion that Ld. Commissioner has invoked the jurisdiction correctl y. In fact some arguments were made that how the proposal has been put up by Assessing Officer. However, on questioning by Bench Ld. counsel has fairl y agreed that the law permits the subordinate staff including the Assessing Officer to put up a proposal for passing revisionary order before the Commissioner. In this regard we may point out that Hon'ble Allahabad High Court in the case of C IT Vs. Bhagat Shyam & Co 188 ITR 608 (All.) clearly observed that there is no bar to the Income tax officer bringing material to the notice of the C IT of initiation of revision proceedings. The only rider given by the High Court was that Commissioner must appl y his mind to the material placed before him. Similar view has been taken by Hon'ble Calcutta High Court in the case of Jagdish Kumar Gulati v C IT 263 ITR 71. We have verified the record and it is clear that when the proposal was put up before the Ld. Commissioner, the same was approved by the Ld. Commissioner on 26.4.2012. No doubt the notice is dated 23.4.2012 but we are satisfied with the reasoning given by Ld. DR that notices are also prepared simultaneousl y with the proposal. Further verification of the record shows that notice was dispatched onl y on 27.4.2012 by speed post i.e. after obtaining the approval of the Ld. Commissioner. In any case the assessee cannot object to this technicalit y because proper opportunity of being heard was provided to the assessee which has been dul y availed and detailed repl y was submitted before the Ld. Commissioner after various hearings on 28.3.2013. Tthe 11 assessee has filed detailed submissions which have been reproduced by the Ld. Commissioner at pages 2 to 8 of his order. Therefore, clearl y the assessee has been provided with an opportunit y of being heard which has been availed by it. In view of the above discussion, we are of the opinion, that there is no need to discuss few decisions of the Tribunal with respect to the notice because no such notice was required and such decisions were rendered without noticing the binding precedent from Hon'ble Supreme Court in the case of C IT v Electro House (supra).
15. Coming to the next important contention i.e. the Commissioner has travelled beyond the notice, we find no force in this contention. The notice in this case reads as under:-
"F. No: .CIT(TDS)/Chd/263/2011-12/ SS2 Dated: 23.04.2012 To M/s Vodafone Essar South India Ltd., PlotNo.C-131,Eltop, Industrial Area, Phase-VIII, Mohali. Sir, Sub: Proposal u/s 263 of the I.T. Act, 1961 for the A. Yrs : 2006-07 to 2010-11- Regarding-
Please refer to the subject noted above.
In this regard, I have been directed to submit that the Asstt. Commissioner of income tax (TDS), Chandigarh vide letter No. 43 dated 12.04.2012 has submitted the proposal under section 263 of the Income tax Act, 1961 on the ground that order u/s 201(1) and 201(1 A) for the financial years 2006-07, 2007-08, 2008-09, 2009-10 & 2010-11 were passed on 24.03.2011 'by the ACIT(TDS), Chandigarh, but issue of TDS on pre-paid sim cards u/s 194H was omitted to be verified and as such no demand u/s 201(1)/201(1A) of the Income tax Act was raised on this issue. Therefore, in view of these facts, the ACIT(TDS), Chandigarh submitted that the order passed by him is erroneous as it is prejudicial to the interest of revenue for not raising any demand u/s 201(1) & 201(1 A) of the I.T Act on account of non- deduction of tax at source on commission paid on sale of prepaid sim cards u/s 194H of the I.T. Act, 1961.
In the interest of natural justice, before passing any order an opportunity of being heard is being given to you. So you are requested to attend the office of worthy Commissioner of Income tax (TDS), Chandigarh on 04.05.2012 at 1130AM.12
Please ensure the compliance on said date and time.
Yours faithfully, Sd/-
{Harbans Kaur) Income Tax Officer, HQ (TDS) Chandigarh"
16. The first para of the finding of the Ld. Commissioner which has already been reproduced is again being reproduced at the cost of repetition as under:-
1. "That on examining an scrutiny of the assessment record, I find that the assessing officer has omitted to have dealt with the issue of discount/commission paid on prepaid/recharge vouchers liable for TDS us 194H of the I.T. Act. This fact has been admitted by the Assessing Officer himself who passed order u/s 201(1)/201(1A) for all these years. Therefore, the orders passed by the AO are erroneous. Since, the AO has not deemed the assessee an assessee in default for not having deducted TDS on the payments made as discount/commission to the vendors against prepaid sim cards/recharge vouchers, despite the fact that on the postpaid sim cards the assessee has been deducting tax at source 194H and also having not charged the mandatory interest u/s 201(1A) for not deducting tax at source on the deductible amount paid by way of discount/commission to the vendors. Hence, the orders passed for all these years by the AO are prejudicial to the interest of revenue. I am, therefore, satisfied that the provisions of section263 of I.T. Act, 1961 are attracted for all these years."
17. In our opinion it would be a case of splitting of hair if we try to distinguish between the expression 'verified' used in the notice and 'dealt with' used in the revisionary order. The basic meaning of both the expressions is same and means that issue has not been examined by the Assessing Officer. The Ld. counsel has also vehementl y contended that reading of the first para of the assessment order would show that the Assessing Officer has already examined this issue of non deduction of tax u/s 194H. Para 1 of the order passed u/s 201 reads as under:-
"A TDS inspection / survey u/s 133A of the I.T. Act, 1961 was carried out at the business premises of the assessee deductor on 17.02.2010. From the details furnish by the assessee deductor company it was noticed that Person Responsible (PR) of the assessee company has non deducted tax at source from the payments made towards commission / incentive on Pre-paid cards as required u/s 194H of the I.T. Act, 1961.
Similarly, PR did not deducted tax at source from the 13 roaming charges (national Roaming & International Roaming Charges). As required u/s 194J of the I.T. Act, 1961."
No doubt it has been mentioned that it was noticed that person responsible of the assessee has not deducted the tax at source from the payments made towards commission / incentive on prepaid cards u/s 194H of the Act. It is clear that this observation is made with reference to the survey proceedings. Further, the careful reading of the whole order clearl y shows that no question has been asked with respect to non deduction of tax on commission / incentive on pre paid cards. No repl y seems to have been given. Assuming for arguments sake, that it is not necessary to mention everything in the order but nothing has been field before us to show that relevant question on this issue was asked by the Assessing Officer and replied were also given. Therefore, it is a clear case of non enquiry in respect of this issue. The Ld. CIT-DR has correctl y submitted that Assessing Officer has merel y set up a preamble on this issue in the first para but has not made any enquiry in this respect. In this regard we may mention that mere non enquiry would also render a particular order passed by lower authorit y as erroneous and prejudicial to the interest of Revenue. This position has been clearl y confirmed by Hon'ble Supreme Court in the case of Rampyari Devi Sarogi Vs. CIT & others 67 ITR 84 (SC) & Smt. Tara Devi Aggarwal v CIT 88 ITR 323 (SC). The reasoning for this proposition has been explained by Hon'ble Delhi High Court in the case of Gee Vee Enterprises v Addl. C IT & others 99 ITR 375 (Delhi) in the following para:-
"It is not necessary for the Commissioner to make further inquiries before cancelling the assessment order of the Income-tax Officer. The Commissioner can regard the order as erroneous on the ground that in the circumstances of the case the Income-tax Officer should have made further inquiries before accepting the statements made by the assessee in his return. The reason is obvious. The position and function of the Income-tax Officer is very different from that of a civil court. The statements made in a pleading proved by the minimum amount of evidence may be adopted by a civil court in the absence of any rebuttal. The civil court is neutral. It simply 14 gives decision on the basis of the pleading and evidence which comes before it. The Income-tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry. It is because it is incumbent on the Income-tax Officer to further investigate the facts stated in the return when circumstances would make such an inquiry prudent that the word "erroneous" in section 263 includes the failure to make such an enquiry. The order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct."
18. Further to this it is noticed that there is no appeal right available to the Revenue from the order of assessment passed by Assessing Officer and i.e. why revisionary powers have been given to the Commissioner and such power were held to be of wide amplitude by the Hon'ble Supreme Court in the case of CIT Vs. Shree Manjunathesware Packing Products and Camphor Works 231 ITR 53 (SC). Therefore, normall y when Assessing Officer has not made any enquiry on a particular issue, then such order in view of the above detailed discussion has to be construed as erroneous and prejudicial to the interest of Revenue and therefore, we hold that order passed u/s 201 is erroneous and prejudicial to the interest of Revenue as Assessing Officer has failed to make any enquiry.
19. The last contention made by the Ld. counsel was that in view of the decision of Hyderabad Bench of the Tribunal in the case of ACIT v Idea Cellular 125 ITD 222 (Hyd), the Assessing Officer has taken one of the possible view. We find no merit in this contention also. No doubt that Hon'ble Supreme Court in the case of Malabar Industries Company Ltd v CIT (supra) has held that if Assessing Officer has taken a particular view which is legall y possible then such order cannot be held to be erroneous and prejudicial to the interest of Revenue. However, as we have seen above, this is a case of non-enquiry and, therefore, it cannot be said that Assessing Officer has taken a particular view. 15
20. The second aspect on this issue is that similar issue was decided in favour of the assessee by Delhi Bench of the Tribunal in the case of Idea Cellular v DCIT 123 ITD 620 and ACIT v Idea Cellular Ltd 125 ITD 222 by Hyderabad Bench of the Tribunal. It is to be noted that first decision in the case of Idea Cellular Ltd Vs. DC IT 123 ITD 620 (Delhi) was rendered on March, 28, 2008. This decision was reversed by Hon'ble Delhi High Court on 19.2.1010 which was reported at C IT v Idea Cellular Ltd 325 ITR 148 (Delhi). Therefore, this decision was no more in existence rather the decision rendered by Hon'ble Delhi High Court was against the assessee. The second decision rendered by Hyderabad Bench of the Tribunal was decided on February, 26, 2009 and in that decision the Hyderabad Bench has mainl y relied on the decision of Delhi Bench which already stands reversed. Further, there was another decision by the Hon'ble Kerela High Court in one of the group company of assessee in case of Vodafone Essar Cellular Ltd Vs. AC IT (TDS) 332 ITR 255 (Ker) wherein it was clearl y held as under:-
"Held, dismissing the appeal, that the SIM card was what linked the mobile subscriber to the assessee's network. Therefore, supply of SIM card was only for the purpose of rendering continued services by the assessee to the subscriber of the mobile phone. The position was the same so far as recharge coupons or e topups were concerned which was only air time charges collected from the subscribers in advance. There was no sale of any goods involved as claimed by the assessee and the entire charges collected by the assessee at the time of delivery of SIM cards or recharge coupons were only for rendering services to ultimate subscribers and the distributor was only the middleman arranging customers or subscribers for the assessee. The terms of the distribution agreement clearly indicated that it was for the distributor to enrol the subscribers with proper identification and documentation which responsibility was entrusted by the assessee to the distributors under the agreement. The distri butor directly or indirectly got customers for the assessee and SIM cards were only used for giving connection to the customers procured by the distributor for the assessee. The assessee was accountable to the subscribers for failure to render prompt services pursuant to connections given by the distributor for the assessee.16
Therefore, the distributor acted on behalf of the assessee for procuring and retaining customers and, therefore, the discount given was commission within the meaning of Explanation (i) on which tax was deductible under section 194H."
Therefore, clearl y there were two decisions against the assessee by two different High Courts, and then it was not possible to rel y on Hyderabad Bench decision to state that this is legall y possible view. In this view of the mater, we find no merit in this contention also and the same is rejected.
21. In view of the above discussion, we uphold the revisionary order passed u/s 263 by Ld. Commissioner,
22. In the result appeal of the assessee is dismissed.
23. ITA No. 611 to 614/Chd/2013:- In all these appeals the issues which have been raised are identical to the issues raised in assessment year 2006-07 in ITA No. 610/Chd/2013 which we have adjudicated above. Therefore, following the above decision, all these appeals also stands dismissed.
24. In the result, all the appeals of the assessee are dismissed.
Order pronounced in the open Court on 06/08/2015
Sd/- Sd/-
(BHAVNESH SAINI) (T.R. SOOD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated 6 t h August, 2015
Rkk
Copy to:
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The DR
FIT FOR PUBLICATION
Sd/- Sd/-
(BHAVNESH SAINI) (T.R. SOOD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
17