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Ground No.2 - Disallowance under section 194J of the Act on account of non-deduction of tax at source on domestic roaming charges paid to other telecom operators 2.1 On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in upholding the contention of the learned TDS officer that the Appellant was required to deduct tax under section 194J of the Act on the 'roaming charges' paid/payable by the Appellant to other telecom operators, during the subject financial year. 2.2 On the facts and in the circumstances of the case and in law, the learned CIT(A)/TDS officer have erred in not appreciating the fact that roaming services are standard automated services requiring no human intervention which is sine qua non for a service to qualify as a technical service for the purposes of section 194J of the Act. 2.3 On the facts and in the circumstances of the case and in law, the learned CIT(A)/TDS officer have erred in not appreciating that even as per the statement of technical experts, the carriage of calls is an automatic activity and human intervention, if any, is required only at the stage of inter-connect set-up, capacity enhancement, monitoring, maintenance, fault identification, repair, etc. 2.4 On the facts and in the circumstances of the case and in law, the learned CIT(A)/TDS officer have erred in ignoring the statement of technical experts recorded by the income-tax authorities in case of Vodafone Cellular Limited (now merged with Appellant itself), in the context of roaming services, wherein it has been clearly observed that roaming services are automated services requiring no human intervention.

2. The reliance placed by the assessee on the decisions of the Hon'ble Courts are also distinguishable facts and issues, hence not applicable to 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.

3. The claim of the assessee that Roaming Charges are not subject to TDS under section 194J of the Act is also not correct and admissible for the reason that on this issue the Hon'ble Supreme Court in the case of Bharti Cellular Ltd. has directed the Assessing Officer to examine the extent of human involvement for applicability of provision of Section 194J of the Ad and the-Assessing Officer after following the directions of Hon'ble Supreme Court examined this aspect and established that human intervention is required to provide fault free services of interconnection. This human intervention is of highly qualified and trained technical professional having expertise and experience in that particular area of relevant technology. In these circumstance, these interconnection charges/roaming charges fall under the ambit of section 194J of the Income tax Act, 1961.

7. Against the aforesaid order of the Ld. CIT passed u/s. 263 of the Act dated 30.3.2013, assessee is in appeal before the Tribunal.

8. Ld. Counsel of the assessee has stated that the notice issued under section 263 of the of Income Tax Act, 1961 by the learned Commissioner of Income Tax (TDS), Chandigarh and the order passed under section 263 of the Act are illegal, bad in law and without jurisdiction. He further stated that Ld. CIT(TDS) erred in assuming the jurisdiction under section 263 of the Act since 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 and the Ld. CIT (TDS) did not arrive at any independent satisfaction for initiation of such proceedings; 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; 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 applicability of withholding tax provisions on the roaming charges paid by the appellant to the other telecom operators. He further stated that Ld. CIT has not appreciated the facts that the other telecom operators, to whom the roaming charges have been paid, would have offered income arising from roaming charges received from the assessee to tax and hence, no prejudice would have been caused to the revenue and hence, initiation of 263 proceedings is bad in law and void ab initio. He further stated that learned CIT(TDS) has erred in concluding that roaming charges paid to other telecom operators by the assessee attracts provisions of section 194J without appreciating the facts that - Roaming charges paid by the assessee to the other telecom operators represent payments made for standard facility provided by such telecom operators and hence, cannot be classified as FTS for the purposes of the Act; No human intervention, which is sine qua non for a service to qualify as technical service, is involved in provision roaming services and therefore, roaming charges cannot be construed as Fee for Technical Services for the purposes of the Act; The reports of the technical experts clearly establish the fact that roaming payments made to other telecom operators for allowing use of their network to assessee's subscribers are in the nature of provision of a standard facility, which does not involve any human intervention at all and hence, such payments cannot be classified as FTS liable for deduction of tax at source under Section 194J of the Act; no demand u/s. 201/201(1A) of the Act can be raised where taxes so deductible but not deducted by the payer are directly paid by the recipient and such an action would result in double recovery of the demand. In support of his arguments, he draw our attention towards the page no. 27 to 32 of the Paper Book which is copy of the order u/s. 201(1) & 201(1A) of the I.T. Act, 1961 dated 29.3.2011 passed by the ITO (TDS), Karnal and relied upon the order of the AO and stated that Section 194J of the Act is not applicable in the present case. He further draw our attention towards page no. 47 of the PB which is a copy of notice of proposal for revision u/s. 263 of the Act issued by the Ld. CIT(TDS) dated 23.3.2012 and further draw our attention towards the page no. 48- 76 of the PB filed by the assessee which are the copy of the submission/reply to the show cause notice of the Ld. CIT in which it is was specifically mentioned that the issue in dispute has been duly examined by the AO. Further, Ld. Counsel of the assessee draw our attention towards page no. 77-104 which is copy of submission/ reply dated 28.3.2013 filed before the Ld. CIT(TDS). Ld. Counsel of the assessee as regards the validity of initiation of revisionary proceedings under section 263 of the Income Tax Act has relied upon the following cases laws, by filing the copies thereof in the shape of paper book:

9. On the contrary, Ld. DR relied upon the order of the Ld. CIT. In support of his contention he filed a copy of the submissions of Revenue on provisions of Income Tax Act and position of law on the issue of Section 263.

10. We have carefully considered the rival submissions and perused the relevant records available with us, especially the impugned order passed by the Ld. CIT u/s. 263 of the Act alongwith Paper Book filed by the Assessee as well as the Written Submissions filed by the Revenue before us. After perusing the aforesaid order of the Ld. CIT, we are of the considered opinion that the order of the Ld. CIT is wrong in assuming the jurisdiction under section 263 of the Act because 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 and the Ld. CIT (TDS) did not arrive at any independent satisfaction for initiation of such proceedings; 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; 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 applicability of withholding tax provisions on the roaming charges paid by the appellant to the other telecom operators. We further note that Ld. CIT has not appreciated the facts that the other telecom operators, to whom the roaming charges have been paid, would have offered income arising from roaming charges received from the assessee to tax and hence, no prejudice would have been caused to the revenue and hence, initiation of 263 proceedings is bad in law and void ab initio. He further stated that learned CIT(TDS) has erred in concluding that roaming charges paid to other telecom operators by the assessee attracts provisions of section 194J without appreciating the facts that - Roaming charges paid by the assesse to the other telecom operators represent payments made for standard facility provided by such telecom operators and hence, cannot be classified as FTS for the purposes of the Act; No human intervention, which is sine qua non for a service to qualify as technical service, is involved in provision roaming services and therefore, roaming charges cannot be construed as Fee for Technical Services for the purposes of the Act; the reports of the technical experts clearly establish the fact that roaming payments made to other telecom operators for allowing use of their network to assessee's subscribers are in the nature of provision of a standard facility, which does not involve any human intervention at all and hence, such payments cannot be classified as FTS liable for deduction of tax at source under Section 194J of the Act; no demand u/s. 201/201(1A) of the Act can be raised where taxes so deductible but not deducted by the payer are directly paid by the recipient and such an action would result in double recovery of the demand. This fact was not appreciated and also the fact and information provided by AO, the Ld. CIT wrongly invoked the provision of 263 of the I.T. Act and directed to AO to examine the default of the assessee to the extent of not deducting tax at source on roaming / interconnect charges paid during these years and chargeability of interest under section 201(1) read with section 201(1A) of the I.T. Act, 1961 by examining the issues on the lines as directed by Hon'ble Supreme Court in the case of M/s Bharti Cellular Ltd. to the AO of Gurgaon who completed the order under section 201/201(1A) of the Income Tax Act, 1961. In our considered opinion, the order of Ld. CIT is wrong and bad in law, because AO has passed the order dated 29.3.2011 judiciously after making all the enquiries / verification, which has been replied and on the basis of the said reply, the AO has passed his order dated 29.3.2011 by relying upon the Hon'ble High Court and ITAT decision. Despite that the Ld. Commissioner of Income Tax has wrongly invoked Section 263 of the Act, which is not sustainable in the eyes of law and therefore, the same deserve to be quashed. We further find that Hon'ble Supreme Court in the case of CIT vs. Green World Corporation 314 ITR 81 (SC) has held as under:-