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Roaming Charges Paid By Bharti Airtel To Other Telecom Companies Not Attract TDS: ITAT

In a major relief to Bharti Airtel, the Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that the roaming charges paid by the Bharati Airtel to other telecom companies do not attract TDS under Section 194J of the Income Tax Act, 1961.

The assessee is running the business of telecom operations and providing telecom services. The Assessing Officer held that the payment by the company to the other telecom company for roaming charges should have been subjected to deduction under section 194J and 194C of the Act. The Officer, therefore, treated the assessee as “assessee in default” for not deducting TDS.

The assessee relied on Tribunal decisions wherein it was consistently held that there is no manual or human intervention involved in the process of interconnection charges upon considering the technical expert opinion and their cross-examination. It was held by those pronouncements that interconnection charges paid by the appellant to other telecom operators are not in the nature of fee for technical services and therefore there is no liability to deduct tax.

The Tribunal held that “the order passed by the Learned CIT(A) that all the judgments as discussed hereinabove were considered by the Learned CIT(A) while allowing the claim of the applicant in deleting the demand of Rs.71,30,810/- & Rs.38,07,820/- raised u/s 194J for A.Y. 2008-09 & 2009-10 respectively with the conclusion that the roaming charges paid by the appellant to other telecom companies are not covered under ‘fee for technical service’ and such payments are out of the purview of TDS provision of 194J of the Act. We find no infirmity in the order passed by the Learned CIT(A).”―Tax Scan

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