SC asks tax authorities to seek technical help

The Supreme Court has asked the Central Board of
Direct Taxes (CBDT) and other tax authorities to get help of technical experts
while deciding income-tax liability of cellular service providers.

The order came after a batch of appeals by
income-tax authorities against the ruling of the Tribunal favouring Bharti
Cellular Ltd. and other service providers. The question was whether manual
intervention was involved in the technical operations by which cellular service
providers were given the facility by BSNL/MTNL for interconnection.

A related question was whether TDS was to be
deducted by service providers when they paid interconnect charges/access/port
charges to BSNL.

“The problem which arises in these cases is that
there is no expert evidence from the side of the Department to show how human
intervention takes place, particularly, during the process when calls take
place,” the order passed by a Bench headed by Chief Justice S. H. Kapadia said.
“We are only highlighting these facts to emphasise that these types of matters
cannot be decided without any technical assistance available on record.”

The Supreme Court underlined “with the emergence of
our country as one of the BRIC countries and with the technological advancement,
matters like the present one will keep on recurring and hence, the time has come
when the Department should examine technical experts so that the matters could
be disposed of expeditiously and further it would enable the Appellate forums,
including this Court, to decide legal issues based on factual foundation.”

(Source : The Business Standard, dated
23-8-2010)