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02-07-2019, Tata Teleservices, Section 194C, 197, 194C, HIGH COURT OF MADRAS

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3 months 17 hours ago #10047 by amit
Section - 194C, 197, 194C, 260A
Order Date - 02-07-2019
Favouring -
Court - HIGH COURT OF MADRAS
Appellant - Tata Teleservices Ltd.
Respondent - ITO
Justice - T.S.SIVAGNANAM & V.BHAVANI SUBBAROYAN
Citation - 719Taxpundit143
Appeal No. - Tax Case Appeal No.411 of 2019
Asstt. Year - 2007-08

Order

PER : T .S.Sivagnanam,J

This appeal, filed by the assessee under Section 260A of the Income Tax Act, 1961 (for short, the Act), is directed against the order dated 07.2.2019 in ITA.No.339/Chny/2018 on the file of the Income Tax Appellate Tribunal, Chennai 'A' Bench for the assessment year 2007-08. The Tribunal, by the impugned order, set aside the order passed by the Assessing Officer dated 05.4.2007 and the order passed by the Commissioner of Income Tax (Appeals)-17, Chennai-34 [for short, the CIT(A)] dated 21.11.2017 and remanded the matter to the Assessing Officer.

2. The assessee has filed this appeal by raising the following substantial questions of law :

“i. Whether the Tribunal's order is grossly erroneous for not adjudicating the grounds and contentions specifically raised in the memorandum of appeal filed by the appellant in a manner contrary to the law laid down by this Court in CIT Vs. Ramdas Pharmacy [reported in (1970) 77 ITR 276]?

ii. Whether the Tribunal's order is grossly erroneous for not following the decision of the Coordinate Bench in Vodafone East Ltd. Vs. Additional CIT [reported in (2015) 61 Taxmann. Com 263] (Kolkatta Tribunal), which is in accordance with the law laid down by this Court in the case of Madras Bar Association Vs. Central Board of Direct Taxes [reported in (1995) 216 ITR 240] and not adjudicating that the appellant is not liable to deduct tax at source under Section 194C of the Act on IUC payments made to other telecom operators ?

iii. Whether the Tribunal erred in failing to consider that the appellant is not an assessee in default in the light of the nil deduction certificates issued under Section 197 of the Act to the payees being other telecom operators ? And

iv. Whether the Tribunal erred in remitting the file back to the Assessing Officer by neither adjudicating on the grounds raised nor giving the appellant the liberty to raise the said grounds at a later stage ? ”

3. We have heard Mr.Tarun Gulati, learned Senior Counsel appearing on behalf of Ms.Deepika Murali and Mr.Karthik Sundaram, learned counsel on record for the appellant and Mr.Karthik Ranganathan, learned Senior Standing Counsel assisted by Mr.S.Rajesh, learned Standing Counsel appearing for the respondent. With consent, the main appeal itself is taken up for final disposal.

4. It is submitted by Mr.Tarun Gulati, learned Senior Counsel appearing on behalf of the appellant that the Tribunal, though, in paragraph 3 of the impugned order, noted the submission of the assessee that they assailed application of Section 194C of the Act on interconnection usage charges (IUC) paid to other telecom operators, in the operative portion of the order, the Tribunal did not discuss the said issue nor rendered any finding. According to the learned Senior Counsel, on the contrary, the Tribunal proceeded to consider the alternate submission of the assessee and to a certain extent, accepted the submissions of the assessee and ultimately, without expressing any opinion on the ground of the assessee that they were not liable to pay tax at source in respect IUC payments to various telecom providers, set aside the orders passed by the Lower Authorities and remanded the matter to the file of the Assessing Officer.

5. Mr.Tarun Gulati, learned Senior Counsel further submits that the assessee was not aggrieved by the direction of the Tribunal remanding the matter to the Assessing Officer, but they are concerned about the further direction issued by the Tribunal for verifying as to whether the payees included the amounts received from the assessee in their returns of income and paid due taxes thereon with a further direction to the assessee to produce records in support of their plea before the Assessing Officer. This, according to the earned Senior Counsel, is a restricted remand and not an open remand and all that the Assessing Officer is expected to do is to verify as to whether the payees included the amounts received from the assessee in their returns of income and paid due taxes thereon. It is also submitted that if this Court upholds the order of remand, it should be an open remand enabling the assessee to raise all the points. The learned Senior Counsel has drawn the attention of this Court to the written submissions filed by the

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