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TMI Blog2013 (8) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... business income from the purchases and sale of prepaid products of the appellant company ignoring the fact that: (a) The assessee company did not provide the details of the deductees regarding filing of IT returns before the AO (TDS) during the proceedings. (b) The details provided before the Ld. CIT(A) did not reflect the correct figure of commission shown by the deductees in their IT returns as the Ld. CIT(A) directed the AO to verify the figures. (c) Many of the deductees did not have PAN and therefore, the claim of filing of IT return by them could not have been considered. (d) Incomplete and unverified information could not have been considered as additional evidence u/r 46A of the Income Tax Rule." 3. Briefly the stated facts are that in this case a TDS survey u/s 133A was carried out at the business premises of the assessee on 29/12/2008. It was noticed by the A.O. that the assessee deductor has made payments of commission to various channel partners appointed all over the State called distributors of pre-paid products for sale of starter packs (SIM Cards) and service tickets/recharge coupons. TDS was regularly deducted by the assessee u/s 194H of the Act. The deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d tax has been paid by the recipients. 7. We have heard the rival submissions and perused the material available on record, we find that the Ld. CIT(A) has decided this issue as under:- "The AO is, therefore, directed to delete the appellant's liability created u/s 201(1) of the I.T. Act, in respect of such distributors/channel partners, who have certified that they have filed their return of income for the concerned assessment year and their total income declared therein was including the business income from the purchase and sale of prepaid products of the appellant company. Accordingly, the AO is directed to verify the factual correctness of the said claim after giving an opportunity of hearing to the appellant and to allow relief according to the decision given above in this para." 8. We have given our thoughtful consideration to the rival contentions of the respective representative of the parties. As per Section 251 of the I.T. Act in disposing of an appeal, Commissioner of Appeal shall have the power to confirm, reduce, enhance or annul the assessment but no power is available for setting aside the issue. Further we find merit into the contention of the Ld. CIT D.R. that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DS officer has erred in applying the provisions of Section 194H of the Act to the case of the Appellant, since the Appellant is not responsible under the distribution agreement to make any payment to the prepaid distributors and responsibility/obligation to make payment is a condition precedent for application of section 194H of the Act which is absent in the present case. 1.4 On the facts and circumstances of the case and in law, the learned CIT(A)/TDS officer has erred in not appreciating that discount allowed by the appellant is not income in the hands of its distributors and that income, if any, arises only when the prepaid SIM cards/talk time is further distributed by the distributors. 1.5 On the facts and circumstances of the case and in law, the learned CIT(A) has erred in not appreciating the facts of the case and the submission made by the appellant while relying on the adverse judgment of High Courts on this issue and also the decision of his predecessor in the case of M/s Tata Teleservices Limited. Hereinafter all the grounds are without prejudice to Ground NO. 1 above. 2. Ground No. 2- Appellant has discharged its onus by submitting sufficient information to enab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 345 ITR 288. In support, the ld. AR also filed the written submissions. 12. On the contrary, the ld. DR submitted that on merit the issue has already been decided against the assessee on the identical facts by the Hon'ble High Courts in the cases of Vodafone Essare Cellular Ltd. vs. ACIT (TDS), 332 ITR 255 (Ker.), Bharti Cellular Ltd. vs. ACIT, 354 ITR 507 (Cal.) and CIT vs. CIT vs. Idea Cellular Ltd. (Del.). 13. We have consider4ed the rival submissions of the parties and perused the materials available on record. We find merit into the contentions of the ld. DR that the issue has already been decided against the assessee by various Hon'ble High Courts rendered in the cases of Vodafone Essare Cellular Ltd. vs. ACIT (TDS), 332 ITR 255 (Ker.), Bharat Cellular Ltd. vs. ACIT, 354 ITR 507 (Cal.) and CIT vs. CIT vs. Idea Cellular Ltd. (Del.). We find that the Hon'ble Delhi High Court on identical facts has held as under: ''We are in agreement with the view taken by the said Bench. Identical view is taken by the Calcutta Bench in the case of Asst. CIT v. Bharti Cellular Ltd. [2007] 294 ITR (AT) 283. Both these Benches specifically rejected the arguments of the assessee b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered view, the objection of the ld. DR is not tenable in law and the same is rejected. Thus the additional ground raised by the assessee is admitted for adjudication. 17. Now coming to the merit of the additional grounds, both the parties have filed the written submissions as well as made oral submissions. The contentions of the ld. Counsel for the assessee in the form of written submission are as under :- ''The proceedings u/s 201(1) of the Act were initiated on 29- 12-2008 when a survey u/s 133A of the Act was undertaken and a notice dated 29-12-2008 was issued and two Inspectors were deputed for verification of TDS for the financial years 2005-06, 2006-07, 2007-08 and 2008-09 relevant to assessment years 2006-07 to 2009-10. Thereafter a specific notice was issued on 14-01-2009 asking further details in respect of MRP and dealer price of all the products sold through distributors / dealers. Hence, the proceedings u/s 201(1) were initiated on 29-12-2008 or 14-01-2009. The order u/s 201, holding the assessee to be the ''assessee in default'', was passed on 17-01-2011 which is barred by time limitation as the same was required to be passed on or before 31-03-2010 i.e. withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall also observe that the Income tax officer in survey proceedings make requisition information for F.Y. 2008-09 related to A.Y. 2009-10 in the letter dated 29.12.2008 as well as in the letter dated 14.01.2009 and the previous year 31.03.2009 has not expired by that time. These letters therefore, could not be issued in determination of short deduction of tax for the year ended on 31.03.2009. The post survey verification could not be treated as proceedings initiated u/s 201. The verification of TDS made by the ITO for section 192, 194A, 194C, 194H, 194I, 194J of the Income tax Act, 1961. The consequences of failure to deduct or pay TDS u/s 192, 194A, 194C, 194H, 194I, 194J of the Income tax Act, 1961 results in to initiation of proceedings u/s 201(1) of the Income tax Act, 1961. It is also vital to be mentioned here that section 201- is consequences of failure to deduct or pay TDS.'' 19. We have given our thoughtful consideration to the contentions of both the parties. The contention of the ld. Counsel for the assessee is that period for reckoning the limitation is to be taken from the date when survey was conducted on the premises of the assessee. On the contrary, the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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