The Matter 1S No Longerres Integra. Identical Matter Has Alreadybeen Decided By This Court Incommissioner Of Income Tax (Ids)Chandigarh v. Dakshin Haryana Byli Vitran Nigam Limited,Ita

ITA No.201 of 2011 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA No.201 of 2011 (O&M)Date of decision:6.11.2015 Commissioner of Income Tax (IDS) Chandigarh .....- Appe Vs, The Accounts Officer, M/s Dakshin Haryana Billi Vitran NigamLimited, Panchkula ....mesponden CORAM: HON’BLE MR. JUSTICEK AJAY KUMAR MITTAHON’ BLE MR. JUSTICEK HARI PAL VERMA 1. Whether Reporters of local papers may be allowed to see the judgment?2. To be referred to the Reporters or not?3. Whether the judgment should be reported 1n the Digest? Present:Mr. Yogesh Putney, Advocate for the appellant-revenue. Mr. Saurabh Kapoor, Advocate for the assessee. Ajay Kumar Mittal,J, 1].This order shall dispose of ITA Nos.201 and 203 of 2011 aslearned counsel for the parties are agreed that identical proposition of law 1sinvolved in both these appeals. ) -ITA No.201 of 2011 has been preferred by the revenue underSection 260A of the Income Tax Act, 1961 (in short, “the Act”) against theorder dated 28.5.2010, Annexure 3, passed by the Income Tax AppellateTribunal, Chandigarh Bench 'A', Chandigarh (in short, “the Tribunal’). Itwas admitted on 19.9.2011 to consider following substantial questions of “T) Whether the learned Tribunal has misread and misconstruedthe statutory provisions of Income Tax Act, while making amention of Explanation 2 to section 9(1)(vi1) of I.T.Act,regarding term “technical service’ by using the word “human’ inviolation of principle of interpretation of statutes? 11) Whether on the facts and circumstances of the case, thelearned [TAT was right in law in holding that the paymentsmade by the assessee in form of transmission/wheeling andSLDC charges were not liable for deduction of tax at sourceunder section 194] of the Income Tax Act? 111) Whether on the facts and circumstances of the case, thelearned ITAT was justified in law 1n holding that the respondentis not liable to pay interest under section 201(1-A) of theI.T.Act, 1961 because there was no tax liability on the incomeot the deductee’ 3)The matter 1s no longerres integra. Identical matter has alreadybeen decided by this Court inCommissioner of Income Tax (IDS)Chandigarh vs. Dakshin Haryana byli Vitran Nigam Limited,ITA No.65? of 2010, on 8.5.2014, wherein it was recorded as under:- 7. After giving our thoughtful consideration to the respectivesubmissions of learned counsel for the parties, we are of theopinion that the issue arising in these appeals requires to bere-adjudicated by the Assessing Officer keeping in view theprinciples of law enunciated by the Apex Court inBhartlCellular Limited's case [(2011) 330 ITR 239].The ApexCourt while discussing the scope of “technical service” hadrecorded as under:- ‘7. The problem which arises 1n these cases 1s that there1s no expert evidence from the side of the Department toshow how human intervention takes place, particularly,during the process when calls take place, let us say, fromDelhi to Nainital and vice versa. If, let us say, BSNL has no network in Nainital whereas it has a network in Delhi,the Interconnect Agreement enables M/s. Bharti CellularLimited to access the network of BSNI in Nainital andthe same situation can arise vice versa in a given case,During the traffic of such calls whether there is anymanual intervention, 1s one of the points which requiresexpert evidence. Similarly, on what basis 1s the “capacity”of each service provider fixed when _ InterconneAgreements are arrived at? For example, we are informedthat each service provider 1s allotted a certain “capacity”’On what basis such “capacity” is allotted and whathappens if a situation arises where a service provider's“allotted capacity” gets exhausted and it wants, on anurgent basis, “additional capacity”? Whether at that stage,any human intervention 1s involved is required to beexamined, which again needs a technical data. We areonly highlighting these facts to emphasise that these typesof matters cannot be decided without any technicalassistance available on record. 8. [here is one more aspect that requires to be gone into. It 1sthe contention of Respondent No.1 herein that InterconnectAgreement between, let us say, M/s. Bharti Cellular Limitedand BSNL in these cases is based on obligations and counterobligations, which is called a “revenue sharing contract’,According to Respondent No.1, Section 194J of the Act 1s notattracted in the case of “revenue sharing contract’. Accordingto Respondent No.1, in such contracts there 1s only sharing ofrevenue and, therefore, payments by revenue sharing cannotconstitute “fees” under Section 194J of the Act. Thissubmission 1s not accepted by the Department. We leave itthere because this submission has not been examined by theTribunal. 9. In short, the above aspects need reconsideration by theAssessing Officer. We make it clear that the assessee(s) 1s not at fault in these cases for the simple reason that the questionof human intervention was never raised by the Departmentbefore the CIT. It was not raised even before the Tribunal; itis not raised even in these civil appeals. However, keeping 1nmind the larger interest and the ramification of the issues,which 1s likely to recur, particularly, in matters of contractsbetween Indian Companies and Multinational Corporations,we are of the view that the cases herein are required to beremitted to the Assessing Officer (TDS). 10. Accordingly, we are directing the Assessing Officer (TDS)in each of these cases to examine a technical expert from theside of the Department and to decide the matter within aperiod of four months. Such expert(s) will be examined(including cross-examined) within a period of four weeksfrom the date of receipt of the order of this Court. Liberty 1salso given to Respondent No.! to examine its expert and toadduce any other evidence.” 8.|The primary basis whereby the Apex Court hadconcluded services to the falling under 194J of the Act to betechnical services that whether any human intervention wasinvolved in the activity or not. The Apex Court observed thatWherever there was human_ intervention requirinexamination of technical data, the same would fall within thedefinition of technical services and 1n the absence thereof, thesame would not partake the character of technical services,The Apex Court in that case had remitted the matter to theAssessing Officer to examine the technical expert and afterexamining him adjudicate the matter afresh. In the presentcase as well from the perusal of the orders of the authoritiesbelow, it 1s not discernible whether there was any interventionof the human element in the services provided to the assessee.9. Accordingly, while setting aside the orders of theauthorities below, the matter is remitted to the AssessingOfficer to examine afresh in the light of the observations made by the Apex Court inBharti Cellular Limited's case(supra), noted above. Further, the assessing authority shallalso examine whether the Provisos inserted 1n Sections 201(1) and 201(1A) by Finance Act, 2012 are applicableretrospectively, as urged by learned counsel for the assessee.Since the Tribunal had followed its order of the Jaipur Benchand in such circumstances, it cannot be said that anyindependent finding has been recorded regarding element ofincome in this case, therefore, it shall be open for theAssessing Officer to consider the element of income in thetransaction as well before passing fresh order in accordancewith law. The substantial questions of law stand decidedaccordingly.” A Learned counsel for the parties are agreed that the appeals maybe disposed of in terms of the order dated 8.5.2014 passed in ITA No.652 of 2010. Ordered accordingly, November 06, 2015 B-#9 (Ajay Kumar Mittal)Judge (Har! Pal Verma)Judge