Case Law Details
DCIT TDS Vs Reliance Communications Ltd. (ITAT Mumbai)
Roaming charges paid by the assessee to the other telecom service provider are not in the nature of ‘fee for technical services’ no TDS under section 194J is liable to be deducted. Once there is no liability for deducting tax at source, question of charging interest under section 201(1A) of the Act does not arise.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the Revenue is directed against the order of Commissioner of Income Tax(Appeals) -16, Mumbai (in short ‘the CIT(A)’ dated 31/03/2017 in proceedings arising under sections 201(1)/201(1A) of the Income Tax Act, 1961 (herein after referred to as ‘the Act’).
2. The brief facts of the case as emanating from records are: The assessee/respondent is engaged in providing telecommunication services to its subscribers across the country. For providing uninterrupted services to its subscribers, the assessee pays roaming charges/interconnect usage charges to other telecom operators. In the present case the Assistant Commissioner of Income Tax (TDS) (in short ‘ACIT-TDS’) held that roaming/interconnect usage charges paid by the assessee to Reliance Telecom Ltd. are in the nature of ‘fee for technical services’, therefore, the assessee was required to deduct tax at source under section 194J of the Act, on such payments. Since, the assessee did not deduct tax at source on the said payments the assessee was held as ‘assessee in default’. Consequently, the ACIT-TDS invoked the provisions of section 201(1) r.w.s. 201(1A) of the Act. The ACIT-TDS vide order dated 12/03/2014 fasten tax liability of Rs.4,24,07,479/- on account of withholding tax under section 194J and interest of Rs.57,05,216/- under section 201(1A) of the Act. Aggrieved against the aforesaid order the assessee filed appeal before CIT(A) .
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