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2017 (11) TMI 568 - AT - Income TaxTDS on Roaming Charges/Interconnect Charges as Technical Fee u/s 194J - revision u/s 263 - Held that:- After perusing the aforesaid order of the Ld. CIT, we are of the considered opinion that the order of the CIT is wrong in assuming the jurisdiction under section 263 because the revisionary proceedings under section 263 have merely been initiated on the basis of the letter received from ACIT (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) 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. 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 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. - Decided in favour of assessee.
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