The High Court of Calcutta held that the delay of 586 days in filing an appeal by the Department without explanation would amount to condoning the utter failure or negligence on the part of the Income Tax Department to take steps with regard to appeal.
The assessee, M/S. Vodafone East Ltd. is engaged in the business of providing telecommunication services across the country. The assessee has been providing postpaid and prepaid telecommunication services through various channel partners (Distributors) under the agreements entered between. The assessee is a subsidiary of Vodafone Essar Limited, engaged in providing Cellular Mobile Telephony Services (CMTS) in Kolkata Telecom Circle after receipt of approval from the Department of Telecommunications (DOT).
The issue raised was whether the payment to the distributors in prepaid SIM cards is a discount or commission and whether it would attract Section 194H of the Income Tax Act, 1961.
The Kolkata ITAT decided the issue in favor of the assessee holding that the discount on prepaid products offered by the assessee was in the nature of “commission” which did attract rigors of section 194H of the Income Tax Act, 1961. Aggrieved by the decision the income tax authority filed an appeal under Section 260A of the Income Tax Act, 1961, but there is a delay of 586 days in filing the appeal.
The division bench of Justice I. P. Mukerji and Justice MD. Nizamuddin dismissed the application for condonation of delay on the ground that condonation of the delay would amount to condoning the utter failure or negligence on the part of the department to take steps with regard to this appeal.
“The appeal papers after moving through various departments of the government for scrutiny, approval, and so on, was ultimately filed on November 13, 2019. There is no explanation for this delay. We are of the view that even if some explanation was offered, we could have exercised our discretion,” the bench said.
Subscribe Taxscan Premium to view the Judgment
