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2016 (1) TMI 742 - ITAT PUNE

2016 (1) TMI 742 - ITAT PUNE - TMI - TDS u/s 194H - non-deduction of tax at source u/s. 194H on trade discount allowed to prepaid distributors - denial of opportunity of hearing in violation of the principles of natural justice as objected by assessee - Held that:- One of the pillars of principles of natural justice is audi alteram partem i.e. no one should be condemned unheard. The principles of natural justice are firmly grounded in Article 14 and 21 of the Constitution of India. The principle .....

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d that the principles of natural justice have to be adhered while discharging administrative, quasi-judicial or judicial functions.

In the instant case, from the facts on record it is evident that the Commissioner of Income Tax (TDS) has in a hurriedly manner without affording opportunity of hearing to the assessee has passed the impugned orders by violating the principle of audi alteram partem. Thus, the impugned order is liable to be set aside on this ground alone. - Decided in favo .....

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4. 2. The brief facts of the case are : The assessee is a Telecom Services Provider. A survey was conducted in assessee s case for the purpose of TDS verification on 23-04-2008, and an order u/s. 201(1) and 201(1A) was passed on 24-03-2011, raising the demand of ₹ 2,00,35,000/-. The assessee s case was taken up for verification for the period relevant to the assessment years 2009-10 and 2010-11, as well. The Dy. Commissioner of Income Tax (TDS)-I, Pune vide order dated 19-03-2012 for asses .....

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u/s. 263 of the Act on the ground that the assessee was liable to deduct TDS u/s. 194J on roaming charges paid by it to the other telecom operators. These payments are in the nature of fee for technical services. The Assessing Officer has neither examined the issue of roaming charges nor made any enquiry/ investigation in this regard. A show cause notice u/s. 263 was issued to the assessee on 30-03-2014, u/s. 201(1) and 201(1A) asking the assessee to appear for hearing on 31-03-2014. The Commis .....

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me Tax (TDS) has erred in assuming the jurisdiction u/s. 263. The issue raised by the Commissioner of Income Tax (TDS) u/s. 263 proceeding has already been decided in favour of the assessee by the Pune Bench of Tribunal in ITA No. 159/PN/2008 for assessment year 2006-07, decided on 08-04-2009, as well as the Delhi Bench of the Tribunal in the case titled Idea Cellular Limited Vs. DCIT reported as 121 TTJ 352 (Delhi). The ld. AR further submitted that the Commissioner of Income Tax (TDS) while ex .....

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of Income Tax (TDS) in an arbitrary and unjustified manner passed the impugned order on 31-03-2014 itself without affording any opportunity of hearing to the assessee. 3.1 The ld. AR submitted that under the provisions of section 201(1) of the Act the assessee can be served notices separately for more than one default. The Assessing Officer initiated proceedings u/s. 201(1) and 201(1A) for allegedly non-deduction of tax at source on discount allowed to pre-paid distributors u/s. 194H of the Act. .....

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ve been raised for any alleged violation u/s. 194J of the Act by the Assessing Officer. Merely, because, no consolidated order is passed for the violations u/s. 194H and 194J does not make the order u/s. 201(1) and 201(1A) erroneous and prejudicial to the interest of Revenue. Separate orders could have been passed for every default of nondeduction/ short deduction of TDS provided, it is within the time limit as prescribed u/s. 201(3) of the Act. The ld. AR submitted that the impugned orders are .....

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and vi. Idea Cellular Limited Vs. DCIT, 121 TTJ 352 (T-Del). 4. Smt. Harshvardhini Buty representing the Department vehemently supported the orders of Commissioner of Income Tax (TDS) and prayed for dismissing the appeals of the assessee. 5. We have heard the submissions made by the representatives of both the sides and have perused the orders of the authorities below. The first ground raised by the assessee in appeal is denial of opportunity of hearing in violation of the principles of natural .....

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ss violation of principles of natural justice, by denying proper opportunity of hearing to the assessee. 6. One of the pillars of principles of natural justice is audi alteram partem i.e. no one should be condemned unheard. The principles of natural justice are firmly grounded in Article 14 and 21 of the Constitution of India. The principles have to be mandatorily applied irrespective of the fact as to whether there is any statutory provision or not. In the present case, we find that the assesse .....

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bay High Court in the case of Vodafone India Ltd. Vs. Union of India (supra) while deciding an issue in writ petition, where the Assessing Officer had given less than 24 hours to reply show cause notice observed, that it is a flaw in the decision making process and therefore amenable to judicial review. The justice must not only be done but also appear to have been done. The non-consideration of the petitiioner s response to the notice by making it impossible to the petitioner to file its reply .....

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e issue relating to applicability of TDS u/s. 194J in respect of roaming charges paid to other telecom operators has already been decided in favour of the assessee by the Co-ordinate Bench of the Tribunal in assessee s own case in the assessment year 2006-07. The ld. AR has placed on record a copy of the order in ITA No. 159/PN/2008 decided on 08-04-2009 in assessee s own case. A perusal of the order shows that one of the ground raised by the Revenue in appeal for the assessment year 2006- 07 is .....

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