Delhi HC quashes two IT notices to Bharti Airtel

Delhi HC quashes two IT notices to Bharti Airtel
Delhi HC quashes two IT notices to Bharti Airtel

In a relief to Bharti Airtel Ltd, Delhi High Court has quashed two show cause notices issued to the telecom major by the Income Tax (IT) department regarding interconnection charges payments made by the company to various foreign entities.

A bench of Justices S Ravindra Bhat and Deepa Sharma allowed the petition filed by Bharti Airtel challenging the show cause notices of March 31, 2011 and March 5, 2012 issued to it by the department.

The department, in its notice, had asked the company why should it not be deemed to be an “assessee-in-default” for making payments for interconnection charges to various foreign firms without deduction of tax under section 195 of IT Act.

“Furthermore, the only reason cited by the respondent (IT department), i.e. administrative convenience, cannot outweigh the harsh nature of the consequence, which would expose resident payers to the onerous responsibility of maintaining books and documents for an uncertain period of time.

“Given these considerations, the impugned notices are quashed. The writ petition is allowed in these terms; no costs,” the bench said in its verdict.

The company had approached the high court contending that it is a telecommunications service provider and had engaged services of both domestic and foreign entities for providing interconnections to its users.

It said that in engaging the services of offshore firms for interconnections, it had paid some charges to them.

The company said the March 31, 2011 show cause notice related to financial year period 2001-2002 to 2010-2011, and the department had asked it why it should not be deemed to be an “assessee-in-default” for making payments to offshore firms for interconnection charges without deduction of tax.

The firm contended that an additional show cause notice of November 22, 2011 was issued to it in which it was given an opportunity to explain as to why tax should not be charged under section 201(1A) of the IT Act on account of failure to deduct tax at source on payments of interconnect usage charges to foreign operators.

Thereafter, a notice dated March 5, 2012 was issued on the same ground for financial years 2001-2002 to 2006-2007.

While relying on two previous judgements, the company said that proceedings under section 201 cannot be initiated beyond a period of four years.

The IT department countered this submission saying it was “untenable” as both the judgements relied upon did not make a distinction between payments made to domestic and foreign entities.

( Source – PTI )

HC seeks Centre reply on Airtel plea for refund

HC seeks Centre reply on Airtel plea for refund
HC seeks Centre reply on Airtel plea for refund

Delhi High Court today sought the Centre’s response on telecom major Bharti Airtel’s plea seeking refund of over Rs 2,500 crore, which includes disputed licence fees of Rs 399.92 crore paid by it for its Punjab circle for 1996-98 and interest on the amount.

A bench of Chief Justice G Rohini and Justice Sangita Dhingra Sehgal issued notice to the Department of Telecommunications (DoT) and sought its reply by September 29 on Airtel’s plea challenging a single judge order holding that the telecom company was not entitled to refund.

“The limited question is whether you are entitled to refund,” the bench observed while issuing notice.

In its plea, Airtel has contended that it was not liable to pay licence fees for Punjab telecom circle for April 1996 to March 1998 as the government “had of its own accord unilaterally, illegally and without any basis brought about a de-facto suspension of the licence during that period”.

The telecom major has said that prior to going for arbitration it had in 2001 deposited the amount with DoT on the understanding that if the company wins the dispute, then the amount would be refunded.

The arbitrator had dismissed the refund claim of the company against which it came to high court which in 2012 had set aside the arbitral award, Airtel has said in its petition.

The 2012 decision was challenged by DoT and is still pending before another bench of Delhi High Court which rejected the government’s plea for stay, the company has said in its petition.

Airtel said it had then sought refund of the amount and when it was not granted, had moved a writ petition which was decided on May 11, 2016, by the single judge who had said that as per some previous verdicts of the high court, the relief sought by the company cannot be granted.

As per Airtel’s plea, it has sought refund of Rs 399.92 crore deposited in 2001 with DoT, Rs 2095.95 crore interest on the amount from 2001 till 2012, coming to a total of Rs 2495.87 crore.

It has also sought additional interest, from 2012 till payment, on the total amount, contending that once arbitral award was set aside and as the order was not stayed on DoT appeal, retaining of the licence fees by the government amounts to “unjust enrichment”.

(Source : PTI)

Mittal and Ruia 2G case: Hearing put off till July 31

A Delhi court Monday put off till July 31 the hearing on a 2G case in which Bharti Airtel chief Sunil Mittal and Essar Group promoter Ravi Ruia were summoned.

Central Bureau of Investigation (CBI) Special Judge O.P. Saini adjourned the case till July 31 after lawyers appearing for Mittal and Ruia informed the court that the matter was pending in the Supreme Court.

The Supreme Court in its interim order April 26 postponed the trial court proceedings till further orders and exempted Mittal and Ruia from personal appearance, the lawyers submitted.

The pleas of Mittal and Ruia, filed in the apex court, challenged the 2G special court’s summons.

The special court summoned the top executives in connection with alleged excess spectrum allocation during the Bharatiya Janata Party-led National Democratic Alliance regime in 2002.

The trial court issued summons after taking cognizance of the charge sheet filed against mobile firms Bharti Airtel, Vodafone and Sterling Cellular for the alleged irregularities.

On Dec 21 last year, the CBI named Shyamal Ghosh and the three telecom firms as accused in the 57-page charge sheet for criminal conspiracy as also under the provisions of the Prevention of Corruption Act for causing a loss of about Rs.846 crore to the exchequer.

The agency told the court that additional spectrum was allotted July 17, 2002 to Bharti Cellular (now Bharti Airtel) and Sterling Cellular (now Vodafone Mobile Service) for the Delhi metro area, and Hutchison Max (now Vodafone India) for the Mumbai metro area.

(Source: IANS)

SC restrains Airtel from providing 3G roaming

Bharti Airtel was on Thursday restrained by the Supreme Court from providing 3G roaming services to new customers in seven circles where it does not have license to do so.

The apex court also said that no coercive steps will be taken on the issue of penalty raised against Airtel for allegedly illegally providing 3G services.

The seven circles where Airtel does not have license to provide 3G services are Kolkata, Madhya Pradesh, Haryana, Gujarat, Maharashtra, Uttar Pradesh East and Kerala.

A bench comprising Chief Justice Altamas Kabir and Justice Vikramajit Sen issued notices to the Centre and Reliance Communications Ltd and sought their response within two weeks on the petition filed by Bharti Airtel challenging a Delhi High Court order giving its nod to DoT’s decision to hold the 3G roaming pact of the telecom major as illegal.

The apex court said thereafter the respondents will file rejoinder within two weeks and posted the matter for hearing on May 9.

The Department of Telecommunications (DoT) had on March 15 issued a notification restraining Bharti from providing 3G intra-circle roaming facilities in seven circles where it did not have the spectrum and also levied penalty of Rs350 crore (Rs 50 crore per circle) for allegedly violating the licence terms and conditions.

On March 18, a single-judge bench of the high court had stayed the operation of the notification.

However, on a plea filed by Reliance, a division bench of the high court on April 4 had set aside the single judge’s order.

The telecom major has challenged the decision of the division bench of the high court.

On April 8, the apex court had asked the government to refrain from taking any “coercive steps” against Bharti Airtel and asked the parties to maintain status quo on the issue till the matter is heard on April 11.

Airtel in its plea had contended that the division bench of the high court was wrong in entertaining the plea of Reliance as it was not a party before the single judge.

However, counsel appearing for Reliance, had submitted before the apex court that what Airtel has been doing for two years was completely illegal as it did not have licence for 3G in seven circles, including Kolkata where it was selling the ‘SIM’ cards for 3G mobile connections.

Reliance in its plea before the high court had sought directions to “declare and hold 3G intra-circle roaming agreements entered into between Bharti and other service providers as illegal and in violation of Article 14, 19 and 21 of the Constitution.”

“It (Reliance) has paid thousands of crores for the 3G spectrum and Bharti is using it for free in as many as seven circles, therefore, disrupting the level-playing field. If this is allowed, then there is no requirement for any licensee to participate and purchase 3G spectrum in auction. This defeats the purpose of auction,” the plea also said.

Reliance said it was not made a party by Bharti in its plea before the single judge despite the fact that Reliance is directly affected by the relief sought by it.

Mittal, Ruia appear in Delhi court in a 2G spectrum case

Bharti CMD Sunil Mittal and Essar group promoter Ravi Ruia today appeared in a Delhi court which posted the matter for further proceedings on April 16.

Sunil Mittal and Ravi Ruia have been summoned as accused in the additional 2G spectrum allocation case.

Mittal’s counsel placed before special CBI judge O P Saini the order passed by the Supreme Court postponing till April 16 the proceedings in the case.

Besides Mittal and Ruia, former Telecom Secretary Shyamal Ghosh, who was summoned by the special CBI judge, also appeared in pursuance to the summons issued against him.

The court, after going through the apex court’s order on separate petitions filed by Mittal and Ruia, listed the matter on April 16 for further proceedings. The apex court will hear their pleas on April 15.

The special court had on March 19 summoned Mittal, Ruia, who was then a Director in one of the accused companies Sterling Cellular Ltd and Asim Ghosh, the then Managing Director of accused firm Hutchison Max Telecom Pvt Ltd.

Their names were not mentioned in the charge sheet filed by CBI on December 21, last year in the case.

Besides the three, the court had also summoned as accused Shyamal Ghosh and three telecom firms Bharti Cellular Ltd, Hutchison Max Telecom Pvt Ltd (now known as Vodafone India Ltd) and Sterling Cellular Ltd (now known as Vodafone Mobile Service Ltd).

The three telecom firms were represented by their counsel in the court today.

CBI, in its charge sheet, had named the three telecom companies as accused in the case relating to the Department of Telecommunication allocating additional spectrum which had allegedly resulted in a loss of Rs 846 crore to the exchequer.

During the proceedings, the court was told that the summons against Canada-based NRI Asim Ghosh had “remained unserved”.

Ruia had moved the apex court a day after it had postponed till April 16 the proceedings in the special CBI court against Mittal.

When CBI had opposed the plea of Mittal in the Supreme Court saying evidence has been found against him during investigation in the case, the apex court had questioned the probe agency as to why he was not named in the charge sheet.

CBI had filed the charge sheet on December 21 last year against former Telecom Secretary Shyamal Ghosh and three telecom firms — Bharti Cellular Ltd, Hutchison Max Telecom Pvt Ltd (now known as Vodafone India Ltd) and Sterling Cellular Ltd (now known as Vodafone Mobile Service Ltd).

Though Mittal, Ruia and Asim Ghosh were not mentioned in CBI’s charge sheet as accused, the special court in its order had said it was taking cognisance of the case and issuing summons to all the seven accused, including them, for April 11.

The special court had said that Mittal, Ruia and Asim Ghosh were “prima facie” in “control of affairs” of their respective companies which were charge sheeted by CBI for offences of criminal conspiracy (Sec 120-B) under the IPC and under provisions of the Prevention of Corruption Act.

SC to hear pleas of Sunil Mittal, Airtel tomorrow

Bharti Airtel’s plea challenging the Delhi High Court order giving its nod to the Centre’s decision holding the 3G roaming pact of the telecom major as illegal will be hear by the bench headed by Chief Justice Altamas Kabir.

The Department of Telecommunications (DoT) on March 15 had issued a notification restraining Bharti from providing 3G intra-circle roaming facilities in seven circles where it did not have the spectrum and also levied a penalty of Rs 350 crore (Rs 50 crore per circle) for violating the licence terms and conditions.

The telecom major has challenged the decision of the division bench of the high court which had set aside its single judge’s March 18 order staying the DoT notification.

While challenging the special 2G court’s order summoning him as an accused, Mittal has contended that criminal liability cannot be fastened on an individual for alleged acts of a firm.

“The special judge failed to consider the settled law in the context of vicarious criminal liability of Managing Directors/Directors and other officers of corporations that in the absence of specific statutory provisions making individual actors liable, there shall be no vicarious criminal liability imposed on any individual for acts of any corporation,” mentioned in the petition filed by Mittal.

“Commission of an offence by raising a legal fiction or by creating a vicarious liability in terms of provisions of a statute must be expressly stated. The Managing Director or Directors of a company cannot be said to have committed an offence merely because they are holders of offices,” according to it.

Besides Mittal, special CBI judge O P Saini had also summoned two others — Essar Group promoter Ravi Ruia, who was then a director in one of accused company Sterling Cellular Ltd, and Asim Ghosh, then MD of accused firm Hutchison Max Telecom Pvt Ltd — whose name were not mentioned in the charge sheet.

Decision on telecom licences renewal in two weeks, court told

Delhi High Court has been informed by the central government that it will decide the applications of renewal of licences of telecom service providers Vodafone, Bharti Airtel and Loop Telecom within two weeks.

Justice Rajiv Shakdher, accepting the submissions of Additional Solicitor General (ASG) A.S. Chandhiok that the applications will be decided as per the law, disposed of the petitions and said that detailed order will be passed later in the day.

Leading telecom service providers Vodafone, Bharti Airtel and Loop Telecom have moved the high court challenging telecom department’s move to put for auction 900 MHz spectrum despite their applications for licence extension pending with the department.

The companies had in December last year sought extension of their licence period for Delhi, Mumbai and Kolkata circles, which are coming up for renewal in November 2014.

The three service providers hold spectrum in the 900 MHz band, which the department of telecommunications plans to auction along with auction of 1,800 and 800 MHz beginning March 11.

The telecom operator has sought the extension under clause 4.1 of the licence agreement under which the government can extend the period of licence by 10 years at one time if the request is made by the operator during the 19th year of the licence period.

The companies moved the court after the Supreme Court last week said that auction of 900 MHz spectrum was not part of its Feb 2, 2012 order and companies are free to challenge it before any court of law



3G roaming services: HC asks Centre to form panel

The  Centre has been asked by the Delhi High Court to set up a committee to examine and decide the row between the Department of Telecommunications and the telecom operators over providing 3G roaming services to their customers outside their licensed areas.
The direction of the court came on telecom major Reliance Communication’s appeal against a single judge bench order to the Centre to take no coercive action against Bharti Airtel for providing 3G roaming services to its customers outside its licensed area.

Disposing of the plea by the Anil Ambani-led firm, a bench of chief justice D Murugesan and justice Rajiv Sahai Endlaw the bench said, “Constitute a committee in a week to deal with it.”

The bench passed the order after considering Additional Solicitor General (ASG) Rajeeve Mehra’s submission that the Department of Telecom, for which he appeared, was willing to set up a panel to hear and decide the contentions of affected parties on the issue.

DoT will now constitute within a week a committee to go examine the issue of 3G roaming services being offered by telecom majors by entering into agreements with each other. The panel, after its constitution, would fix a date of hearing and after its conclusion, would pass an order within four weeks.

According to the bench, “As the time frame for each step was put forth by the ASG, the committee should adhere to it.” A single-judge bench had earlier on October 3 directed that no coercive steps would be taken against telecom major Bharti Airtel after it moved the court against a show-cause notice of DoT to it to stop providing 3G roaming services to its customers outside its licensed area.

DoT had alleged that telecom majors have been violating its terms by providing 3G roaming services to their customers outside their licensed areas by entering into arrangements among themselves.

Airtel to pay for harassing old subscriber

The New Delhi District Consumer Disputes Redressal Forum imposed a fine of  Rs 25,000 on Bharti Airtel for harassing a post-paid subscriber.

Bharti Airtel has demanded fresh documents to verify his six-year-old connection and then stopping outgoing calls on his number.

The telecom major has been held guilty of rendering deficient service and causing harassment to complainant Manoj Kumar Sharma, a school teacher.

 Consumer court said “A post-paid connection is issued to subscribers only after the residential proof like passport, driving license, ration card and voter ID card are provided to the opposite party (Airtel), otherwise it could have never issued a post-paid connection to any subscriber”.

“It is a clear case of deficiency on the part of opposite party to harass the subscriber (Sharma) without any rhyme and reason. Opposite party is directed to pay (Sharma) Rs 25,000 as harassment, mental agony and litigation charges as the consumer (Sharma) has been suffering without any valid reasons since 2009,” the bench presided by C K Chaturvedi said.

 Manoj Kumar Sharma, a resident of Lodhi Road Complex here, in his complaint filed in October 2009 had said he had been using an Airtel post-paid connection for over six years when the firm’s service centre called him up and asked him to provide fresh set of documents for verifying his number.

 He had agreed and had asked them to send someone to collect the documents from his home but no one came, he had said in his complaint and added that Airtel then blocked all outgoing calls from his number without informing him.

 While in its written statement, Airtel replied it was acting as per the provisions of the Indian Telegraph Act and the TRAI guidelines.

 But the forum rejected the contention of Airtel by saying that its act was totally arbitrary.