The Impugned Order Is Assailed Before Us In This Writ Petition Only Tothe Extent Of The Demand On The Ground Of Non-Deduction Of Tds Undersection 194J On Roamin v. Cit[[1

THE HONOURABLE Ms. JUSTICE G. ROHINIAND THE HONOURABLE SRI JUSTICE A.RAMALINGESWARA RAO WRIT PETITION No.27818 OF 2013 Date: 30.09.2013 Between: M/s. Idea Cellular LimitedKLK Estate, Fateh Maidan RoadHyderabadRep. by its Authorized SignatoryMr. Arun Madhav Bhagavathula And …Petitioner The Commissioner of Income Tax (TDS)Income Tax TowersA.C. GuardsMasab TankHyderabad, and four others …Respondents THE HONOURABLE Ms. JUSTICE G. ROHINIAND THE HONOURABLE SRI JUSTICE A.RAMALINGESWARA RAOWRIT PETITION No.27818 OF 2013 ORDER:(Per Hon’ble Ms. Justice G.Rohini) Aggrieved by the orders made under Section 221 of the Income TaxAct, 1961 (for short, “the Act”) treating the petitioner as “Assessee in default”for the Assessment Years 2004-05 to 2010-11 on the ground of non-deduction of TDS on discount allowed to the prepaid distributors, thepetitioner preferred separate appeals before the respondent No.2. Pendingthe said appeals, the petitioner made an application before the 1[st]respondent as provided under Section 220(6) of the Act for grant of stay ofdemand and collection of tax till the appeal is decided by the 2[nd]respondent. The said application for stay was disposed of by the 1[st] respondent by order dated 26.08.2013 which reads as under: “With reference to your application for stay of demandfor the A.Ys. 2004-05 to 2010-11 referred to above, it is seenthat your appeal with respect to the issue of non-deduction ofTDS u/s. 194H has been dismissed by the CIT(A)-II,Hyderabad. You will also appreciate that this issue has beendecided against the assessee by the Hon’ble Delhi Bench ofITAT also. Therefore, on consideration of facts, I am of theview that no further stay can be granted for the demand ofRs.5,42,73,150/- pertaining to this issue, and accordingly, youare requested to pay all of such demand before 31.08.2013. As regards the demand of Rs.12,48,86,448/- pertainingto the issue of non-deduction of TDS u/s. 194J on RoamingCharges paid to other Telecom Operators for various years,the said demand may be paid in instalment of Rs.2 crores permonth starting from the month of September, 2013 toFebruary, 2014, so as to clear the entire demand beforeFebruary, 2014 or the disposal of appeal, whichever isearlier.” The said order dated 26.08.2013 is under challenge in this writpetition. We have heard Sri R. Raghunandan, learned counsel for thepetitioner and Sri S.R. Ashok, learned Standing Counsel for Income Taxappearing for the respondents. The impugned order is assailed before us in this writ petition only tothe extent of the demand on the ground of non-deduction of TDS underSection 194J on Roaming Charges paid to the Telecom Operators forvarious years. The specific case of the petitioner is that Section 194J is whollyinapplicable to the transactions in question and therefore the petitioner isnot liable to deduct TDS while making the payment. In support of the saidplea, the petitioner relied upon the decision of the Supreme Court inHindustan Coca Cola Beverage Pvt. Ltd. Vs. CIT[[1]]. The further contention is that the impugned order came to be passedwithout affording an opportunity of personal hearing to the petitioner andwithout assigning any reasons and thus the same being in violation of the principles of natural justice, is liable to be set aside on that ground alone. Since the main appeal is still pending before the respondent No.2,we are not inclined to go into merits of the case and express any opinion onthe petitioner’s contention that Section 194J is not applicable. However, itis observed that no reasons were assigned by the 1[st] respondent in theimpugned order while directing the petitioner to pay the disputed amount insix instalments. That apart, the petitioner was not given an opportunity ofbeing heard before passing the said order. Therefore, it appears to us thatthe matter requires reconsideration. principles of natural justice, is liable to be set aside on that ground alone. Since the main appeal is still pending before the respondent No.2,we are not inclined to go into merits of the case and express any opinion onthe petitioner’s contention that Section 194J is not applicable. However, itis observed that no reasons were assigned by the 1[st] respondent in theimpugned order while directing the petitioner to pay the disputed amount insix instalments. That apart, the petitioner was not given an opportunity ofbeing heard before passing the said order. Therefore, it appears to us thatthe matter requires reconsideration. Under the circumstances, without expressing any opinion on meritsof the case, the impugned order to the extent of the demand pertaining tonon-deduction of TDS under Section 194J is hereby set aside and thereshall be a direction to the 1[st] respondent to pass appropriate order afreshafter giving an opportunity of being heard to the petitioner. The learned counsel for the petitioner undertakes that the petitionerwould appear before the 1[st] respondent on 04.10.2013. Recording theundertaking, the Writ Petition is disposed of leaving it open to the 1[st]respondent to hear the petitioner on 04.10.2013 or any other convenientdate thereafter and pass appropriate order in the light of the observationsmade above. No costs. Consequently the miscellaneous petitions, if any, pending in this WritPetition shall stand closed. ____________ G.ROHINI, J Date: 30.09.2013Note:- CC by tomorrow. (B/O) Mva ______________________________ A.RAMALINGESWARA RAO, J [1]293 ITR 226