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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI PRADIP KUMAR KEDIA, & SHRI MAHAVIR PRASAD
The captioned appeal has been filed by the Revenue against the order of the CIT(A), Gandhinagar (‘CIT(A)’ in short), dated 13.07.2017 arising in the assessment order dated 17.10.2017 passed by the Assessing Officer under s. 201(1) & 201(1A) of the Income Tax Act, 1961 (the Act) concerning A.Y. 2010-11.
(TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 2 - 2. The captioned appeal has been filed by the Revenue against the order of the CIT(A) dated 13.07.2017 whereby the action of the AO under s. 201(1) and 201(1A) of the Act was reversed by the CIT(A).
The AO observed that the assessee has failed to deduct TDS on an amount of Rs. 3,08,90,000/- lent by it to its shareholders which are covered under the provisions of sec. 2(22)(e) of the Act and consequently such deemed dividend is susceptible to TDS provision under s. 194 of the Act. The AO accordingly issued show-cause notice dated 27.01.2016 seeking explanation on applicability of sec. 201(1) for alleged default in non-deduction of tax and consequent liability of interest on such default committed as per s. 201(1A) of the Act. The AO, in conclusion, held that the assessee is to be regarded as an ‘assessee in default’ for having failed to deduct TDS as obliged under s. 194 of the Act. As a consequence, the AO imposed tax liability under s. 201(1) of the Act amounting to Rs. 30,89,000/- for the default under s. 201 and also imposed consequential interest under s. 201(1A) amounting to Rs. 24,40,310/- thereon by passing an order dated 17.10.2016 under s. 201(1)/201(1A) of the Act.
Aggrieved by the aforesaid action of the AO holding the assessee as ‘assessee in default’ in respect of payment of loans/advances to its shareholders purportedly hit by s. 2(22)(e) of the Act and hence having failed to deduct TDS under s. 194 of the Act on such loans advances, the assessee preferred appeal before the CIT(A).
4.1 Before the CIT(A) the assessee made two fold submissions. (1) The action of the AO in passing the order under s. 201(1)7201(1 A) is time barred as such order could not be passed beyond six years from the financial year in which such default has been committed as (TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 3 - contemplated under s. 201(3) of the Act and (2) the action of the AO in holding the routine business transactions with the shareholder as advance contemplated under s. 2(22)(e) of the Act and consequently holding assessee in default under s. 194 of the Act is not justified on merits.
4.2 The CIT(A), however, found merits in the first limb of arguments itself and held that the action of the AO in passing the order under s. 201(1) and 201(1A) vide order dated 17.10.2016 itself to be time barred as such order could not be passed beyond six years from the end of the financial year in terms of pre-amended s.201(1) of the Act. The CIT(A) thus quashed the order of the AO under s. 201(1)7201(1 A) due to bar of limitation without going into the alternative claim of the assessee on merits towards applicability of sec. 2(22)(e) of the Act.
4.3 The relevant operative para of the order of the CIT(A) is reproduced hereunder:-
“6. I have carefully considered order passed u/s. 201(1) and 201(1A) of the Act and submission filed by appellant. The brief facts of present case are that appellant company has given loan of Rs.3,08,90,000 to Shri Jayantibhai S Patel in current assessment year and said person is major shareholder and director of the company. The Deputy Commissioner of Income Tax, Gandhinagar Circle has submitted such information to present AO regarding non deduction of TDS on above loan which is nothing but deemed dividend. The AO has referred to provisions of section 194 of the Act and held that appellant is liable for deduction of TDS @ 10% and raised demand of Rs.55,29,310 including interest u/s 201(1 A) for Rs.24,40,310. On the other hand, appellant has referred to provision of section 201(3) of the Act and argued that as present assessment year is 2010-2011 and AO has issued notice u/s 201(1) on 27/01/2016 and passed order on 17/10/2016 which is beyond four years from end of relevant assessment year hence such notice as well as order passed by AO is barred by limitation for which reliance is placed on decision of Hon'ble Gujarat High court in the case of Tata Teleservices 66 Taxman.com 157.
(TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 4 - On careful consideration of entire facts, it is observed that appellant has relied upon decision of Hon'ble Gujarat High court in the case of Tata Teleservices 66 Taxman.com 157 (referred supra) and argued that present order passed by AO is time barred. The Hon'ble High court has held as under:
“Section 201 of the Income-Tax Act, 1961. Deduction of tax at source- Consequence of failure to deduct or pay (Time Limit for passing order) -Assessment years 2008-09 and 2009-10 - Whether amendment in section 201(3) by Finance Act, 2014 is not made expressly with retrospective effect but as per plain language of amended section it was to take effect from 1-10- 2014 - Held, yes - Whether thus increased limitation period of 7 years under section 201(3) as amended by Finance (No. 2) Act, 2014 with effect from 1-10-2014 shall not apply retrospectively to orders which had become time-barred under old time-limit set by unamended section 201(3) and no order under section 201(1) deeming deduct or to be asses see in default could have been passed if limitation had already expired as on 1-10-2014 - Held, yesfPara 15] [In favour of assessee]
The Hon'ble Gujarat High court has explained the provisions of section 201(3) as amended by Finance Act 2009, 2012 and 20[4 as under:
"12. While considering the aforesaid question, provisions of section 201 of the Income Tax Act, as amended from time to time, are required to be considered. 12.1 Section 201 of the Act provides for consequences of failure to deduct tax in accordance with the provisions of the Act. Section 201 of the Act as amended by Finance-Act of 2008 with retrospective effect from 1/6/2002 reads as under: "Consequences of failure to deduct or pay.
(1) Where any person, including the principal officer of a company,—
(a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-section (IA) of section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax:
Provided that no penalty shall be charged under Section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax.
(TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 5 -
(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub- section does not deduct the whole or any part of the tax] or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid and such interest shall be paid before furnishing the quarterly statement for each quarter in accordance with the provisions of sub-section (3) of section 20;
(2) Where the tax has not been paid as aforesaid after it is deducted, the amount of the tax together with the amount of simple interest thereon referred to in subsection (IA) shall be a charged upon all the assets of the person, or the company, as the case may be referred to in sub-section (1)."
12.2 Subsequently, section 201 of the Act came to be amended. Sub-sections (3) and (4) came to be introduced w.e.f. 1/4/2010. Section 201 as amended by Finance Act No.2 of 2009 w.e.f. 1/4/2010 reads as under:
"201. (1) Where any person, including the principal officer of a company —
(a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-section (IA) of section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax:
Provided that no penalty shall be charged under section 121 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax. (1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act. he or it shall be liable to pay simple interest,—
(i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one half per cent for every month or part of a month on the amount of such tax from the date on which such tax was (TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 6 - deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section(3) of section 200.
(2). Where the tax has not been paid as aforesaid after it is deducted, the amount of the tax together with the amount of simple interest thereon referred to in sub-section (1A) shall be a charge upon all the assets of the person, or the company, as the case may be, referred to in sub-section (1). (3). No order shall be made under sub-section (1) deeming a person to be an assessee in default for failure to deduct the whole or any part of the tax from a person resident in India, at any time after the expiry of —
(i) two years from the end of the financial year in which the statement is filed in a case where the statement referred to in section 200 has been filed;
(ii) four years from the end of the financial year in which payment is made or credit is given, in any other case:
Provided that such order for a financial year commencing on or before the 1st day of April, 2007 may be passed at any time on or before the 31st day of March, 2011.
(4) The provisions of sub-clause (ii) of sub-section (3) of section 153 and of Explanation I to section 153 shall, so far as may, apply to the time limit prescribed in sub-section (3)." 12.3 Subsequently, section 201(3)(ii) of the Act came to be amended by Finance Act of 2012 with retrospective effect from 1/4/2010 whereby in sub-section (3) in clause (ii) words "four years" came to be substituted by words "six years". Amended section 201(3) reads as under:
12.4 Subsequently, section 201 (3)(ii) of the Act, was amended by Finance Act, 2012, with retrospective effect from 01/04/2010, whereby in sub-section (3), in clause (ii), for the words "four years", the words "six years" shall be substituted. The amended Section 201(3) read as under: "201(3). No order shall be made under sub-section (1) deeming a person to be an assessee in default for failure to deduct the whole or any part of the tax from a person resident in India, at any time after the expiry of — (i) two years from the end of the financial year in which the statement is filed in a case where the statement referred to in section 200 has been filed:
(ii) six years from the end of the financial year in which payment is made or credit is given, in any other case:
(TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 7 - Provided that such order for a financial year commencing on or before the 1st day of April, 2007 may be passed at any time on or before the 31st day March, 2011."
12.5 Subsequently, section 201(3) of the Act has been further amended by Finance Act No.2 of 2014 w.e.f. 1/10/2014, which reads as under:
"Consequences of failure to deduct or pay:
201 (3) No order shall he made under sub-section (1) deeming a person to be an assessee in default for failure to deduct the whole or any part of the tax from a person resident in India, at any time after the expiry of seven years from the end of the financial year in which payment is made or credit is given."
As stated hereinabove, question posed before this Court is whether section 201(3) of the Income Tax Act as amended by Finance Act No. 2 of 2014 would be applicable prospectively or retrospectively.
12.6 From the aforesaid chronological events and section 201 as amended from time to time, it emerges that prior to section 201 came to be amended by Finance Act No.2 of 2009, Income Tax Act did not provide for any limitation of time for passing an order under section 201(1) holding a person to be an assessee in default. It appears that in absence of such a time limit, dispute arose when the proceedings were taken up or completed after substantial time has elapsed. Therefore, by Finance Act No.2 of 2009 sub-sections (3) and (4) came to be introduced w.e.f. 1/4/2010 and it provided that an order under section 201 (1) for failure to deduct the whole or any part of the tax as required under the Act, if the deductee is a resident -payer, shall be passed within two years from the end of the financial year in which statement of tax deducted at source, is filed by the deductor. It further provides that where no such statement is filed, said order can be passed up till 4 years from the end of the financial year in which payment is made or credit is given...............
15. Considering the law laid down by the Hon'ble Supreme Court in the aforesaid decisions, to the facts of the case on hand and more particularly considering the fact that while amending section 201 by Finance Act, 2014, it has been specifically mentioned that the same shall be applicable w.e.f. 1/10/2014 and even considering the fact that proceedings for F. Y. 2007-08 and 2008-09 had become time barred and/or for the aforesaid financial years, limitation under section 201(3)(i) of the Act had already expired on 31/3/2011 and 31/3/2012, respectively, much prior to the amendment in section 201 as amended by Finance Act, 2014 and therefore, as such a right has been accrued in favour of the assessee and considering the fact that wherever legislature wanted to give retrospective effect so specifically provided while amending section 201(3) (ii) of the Act as was amended by Finance Act, 2012 with retrospective effect from 1/4/2010, it is to be held that section 201(3), as amended by Finance
(TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 8 - Act No.2 of 2014 shall not be applicable retrospectively and therefore, no order under section 201(1) of the Act can be passed for which limitation had already expired prior to amended section 201(3) as amended by Finance Act No.2 of 2014, Under the circumstances, the impugned notices/summonses cannot be sustained and the same deserve to be quashed and set aside and writ of prohibition, as prayed for, deserves to be granted." It is observed that whether appellant is required to deduct TDS or not is for A. Y. 2010-11 and as per amendment brought by Finance Act, 2009 as discussed by Hon'ble Gujarat High court, AO was required to pass order u/s 201 of the Act on or before 31/03/2013 (within 2 years from end of financial year in which TDS return is filed) as appellant has filed TDS return for current assessment year on 04/06/2010 and received on 07/07/2010. It is also observed that when section 201 (3) was amended by Finance Act 2014 wherein time limit for passing order has been extended for 7 years from end of assessment year to which it pertains, time limit for passing order u/s 201(3) as required in Finance Act 2009 had already expired and the present order has been passed on 17/10/2016 which is clearly time barred, on considering the decision of Hon'ble Gujarat High court as discussed herein above. As the decision of Hon'ble Gujarat High court is binding on subordinate authorities, hence following the ratio laid down by the Hon'ble Court, present order is held as time barred by limitation and consequential TDS liability raised by AO does not survive. The grounds of appeal are allowed in favour of the appellant.”
The CIT(A) accordingly set-aside the order of the AO and on the grounds of barred of limitation which resulting in question of liability under s. 201 (1)/201(1A) of the Act.
Aggrieved, the Revenue has preferred appeal before the Tribunal.
The Ld. DR for the Revenue submitted at the outset that no TDS return was filed by the assessee and the observations of CIT(A) is factually incorrect in this regard. The DR further contended that the show-cause notice for default committed by the assessee under s. 201(1)/201(1A) was issued on 27.01.2016 which is within six years from the end of the financial year in which the default was committed and continuing by the assessee in non-deduction of TDS as contemplated under s. 194 of the Act. The Ld. DR pointed out that (TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 9 - the said limitation period was thereafter enlarged from six years to seven years by the amendment carried out in sec. 201(3) by Finance Act (No. 2) Act, 2014 w.e.f. 01.10.2014. The Ld. DR thus submitted that on the date of show-cause issued in a continuing default, the period available for passing the order under sub sec. (1) of sec. 201 was seven years from the end of the financial year and within such period, the order has been actually passed. The Ld. DR accordingly submitted that CIT(A) has wrongly applied the law on totally incorrect assumption of facts. It was exhorted that firstly, no return was filed by the assessee and thus cause of action was duly available and had not become time barred at the time of amendment by Finance (No. 2) Act 2014 and therefore ratio of decision of Hon'ble Gujarat High Court in Tata Teleservices is not applicable at all. The Ld. DR reiterated that the default committed by the assessee was existing and continuing on the date of issue of show-cause notice and, therefore, the law as applicable on the date of issue of show- cause notice would apply for the purpose determination of period of limitation. Therefore, the law when applied with reference to the date on which the show-cause notice was issued in respect of the financial year to which the subsisting default relates, the AO did not breach the embargo of limitation placed under s. 201(3) of the Act. The Ld. DR accordingly submitted that the CIT(A) fell in gross error in holding the action of the AO under s. 201(1)/201(1A) to be time barred.
Ld. AR for the assessee on the other hand supported the order of the CIT(A). The Ld. AR referred to the provisions of sec. 201(3) of the Act and submitted that the aforesaid sub-section sec. 3 was originally inserted w.e.f. 01.04.2010 providing for a time limit of four years from the end of the financial year in which the payment is made or credit is given for the purposes of holding a person to be an (TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 10 - assessee in default under s. 201(1) of the Act. The Ld. AR thereafter referred to the amendment made by Finance Act 2012, with retrospective effect from 01.04.2010 whereby the limitation period of four years was enlarged to six years. The Ld. AR thereafter submitted that the Finance (No. 2) Act 2014, however, yet again substituted the aforesaid sec. 201(3) w.e.f. 01.04.2014. As per the substituted section the limitation period has been re-fixed at seven years for holding a person as assessee in default under s. 201(1) for non-deduction/short deduction of tax in accordance with provisions of Chapter XVII-B of the Act. To elaborate, the Ld. AR submitted that at the time of payment made or credited giving rise to alleged default, that is financial year 2009-10, the assessee was governed by the pre-substituted provision of sec. 201(3) whereby a period of six years was provided for passing the order fixing liabilities for default. The Ld. AR contended that the default, if any, was committed in financial year 2009-10 and therefore, period of six years is required to be reckoned from the relevant financial year in which the default was committed. It was submitted that issuance of show-cause notice within the time frame of six years is not enough. The law enjoined for passing order within the period of six years. Period of seven years enlarged w.e.f. 01.10.2014 by Finance (No.2) Act, 2014 is from specific date and would thus apply to default committed after that date and in respect of Financial Year 2014-15 onwards and hence cannot apply to the alleged default concerning A.Y. 2009-10 in the case of the assessee. A reference was made to the decision of Tata Teleservices vs. UOI (2016) 66 taxmann.com 157 (Gujarat) to buttress its claim for counting the period of six years for the purposes of computation of limitation. The Ld. AR thus submitted that the CIT(A) has rightly held the action of the AO to be time barred and thus does not call for interference. The Ld. AR, in the alternative, submitted that in case of incongruence with the view
(TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 11 - marshaled by the CIT(A), the issue requires to be restored back to the file of the CIT(A) for adjudication of claim of the assessee for non-applicability of sec. 2(22)(e) on merit as the same has not been decided at all.
We have carefully considered the rival submissions.
The Revenue has challenged the action of the CIT(A) in quashing the order passed under s. 201(1)7201 (1 A) passed by the AO on the grounds of bar of limitation.
9.1 Section 201(3) provides that no order shall be made sub section (1) deeming a person to be an 'assessee in default' for failure to deduct tax from a person resident in India at any time after the expiry of seven years from the end of financial year in which the payment is made or credit is given. It is the case of the assessee that aforesaid period of limitation of seven years has been made effective w.e.f. 01.10.2014 and thus would apply to default committed thereafter (towards non-deduction etc.) and hence the pre-amended period of six years would continue to apply to the case of the assessee, as the default relates to pre-amended period. On the other hand, it is the case of the Revenue that the amended period of seven years would become applicable as the enhanced limitation period will have to be reckoned for all pending matters where default under s. 201(1)/201(1 A) continues and subsists. It is further case of the Revenue that once the show-cause notice has been issued within the pre-amended period of six years i.e. at the time of existence of default, it was entitled to avail the extended period of seven years as limitation is only a procedural law.
9.2 A bare reading of sub section (3) to section 201 suggests that the aforesaid sub section was substituted by Finance (No. 2) Act
(TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 12 - 2014 w.e.f. 01.10,2014 whereby the limitation period for passing the order has been extended to seven years from the relevant financial year in which the payment is made or credit is given in substitution of erstwhile six years period. As per the pre-amended provisions, the order under s. 201(1) could be passed by 31.03.2016 whereas as per the substituted provisions, the Revenue was entitled to make the order on or before 31.03.2017. Thus, the order dated 17.10.2016 has been passed as per the limitation available under post-amended provision which however stands barred by limitation specified under pre-amended law. The question that is to be decided is whether the amended provision would apply to the present case or the original provision would apply to the present case. Thus, interpretation of sec. 201(3) has been called into question.
9.3 In the context, it may be worthy to note a decision of the Hon'ble Madras High Court in the case of Chettinad Corpn. (P.) Ltd. (1983) 141 ITR 693 (Mad.) where the Hon'ble High Court has referred to Hon'ble Apex Courts observations in the case of S.C. Prashar v. Vasantsen Dwarkadas [1963] 49 ITR 1 as under:-
“... we wish to say a few words about the well-known principle that subsequent changes in the period of limitation do not take away an immunity -which has been reached under the law as it was previously. In this sense statutes of limitation have been picturesquely described as 'statutes of repose'. We were referred to many cases in which this general principle has been firmly established. We do not refer to, these cases because in our opinion it is somewhat inapt to describe section 34 with its many amendments and validating sections as a section of repose. Under that section there is no repose till the tax is paid or the tax cannot be collected. What the law does by prescribing certain periods of time for action is to create a bar against its own officers administering the law. It tries to trim between recovery of tax and the possibility of harassment to an innocent person and fixes a duration for action from these two points of view. These periods are occasionally readjusted to cover some cases which would otherwise be left out and hence these amendments.”
(TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 13 - 9.4 Applying the principles the Hon’ble High Court observed that the period prescribed in the unamended section 275 cannot be described as a statute of repose. It further held that,
“It has also been held that this provision is a procedural one. Learned counsel for the assessee contended that he had acquired vested right of the penalty proceedings having to be completed within two years from the assessment and that the said vested right could only be affected by express retrospective amendment Section 275 being only in the nature of a procedural provision, there is no question of any vested right accruing to any assessee by reason of the assessment being completed on. any particular date. It is now well- settled that there is no vested right in any procedural matter. In the present case, therefore, the extended period of limitation would alone apply.”
In the light of principles laid down by the Hon’ble Supreme Court and Hon’ble Madras High Court as aforesaid, we have to examine whether the period prescribed under the unamended sec. 201(3) cannot be considered as statute of repose or a procedural one. Section 201(3) deals with law of limitation. Law of limitation has been held to be procedural law always having retrospective effect unless the amended statute provides otherwise as noted in CIT vs. Sadhuram (1981) 127 ITR 517 (Pun. & Har.). The sub-section (3) under consideration before us providing limitation cannot be termed as substantive law much less a statute of repose. When it is not so termed, the exposition emanating from the above that in such cases of adjective law or procedural statute, amended provisions would apply. It is a trite proposition that neither Assessee nor Revenue should be given a step-motherly treatment. Hence, it is equitable to held that Revenue can claim benefit of extension of time under limitation provision provided by way of amendment, since at the time of amendment, a valid cause of action was continuing and subsisting and limitation was not concluded.
(TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 14 - 11. The show-cause notice in the instant case was duly issued within the period of six years at which time the default in deduction of TDS was both committed as well as continuing and therefore the assessee, in our view, cannot seek immunity from the applicability of sec. 201(1) for alleged default where the order has been passed within seven years as provided in amended law.
While holding so, we agree to the contentions raised on behalf of Revenue that CIT(A) has wrongly observed that the cause of action had ceased and the applicability of sec. 201(1) had already become time barred at the time of amendment and thus extended time limit could not be conferred on AO. The assessee has no where contended or demonstrated on facts that TDS return was filed and thus the case was not time barred as wrongly assumed.
The reliance placed on behalf of assessee on the decision of Tata Teleservices (supra) in totally misplaced as right of the Revenue to pass order has already become time barred at time of amendment by Finance (No. 2) Act 2014 in that case. Thus, with the lapse of time a substantive right had already accrued to the assessee which could not be taken away by a subsequent amendment. The limitation already barred could not be revived by later amendment. This is not the factual situation in the instant case as noted earlier. The other decisions relied upon by assessee are also clearly distinguishable as the issue in the instant case relates to law of limitation which is procedural one. The ratio of decision of Hon’ble Supreme Court in Brij Mohan vs. CIT 120 ITR 30(SC) is also not applicable as no return has been filed by the assessee in the instant case and the default is not merely committed in this case but is also continuing.
(TDS)vs. M/s. Shri Rang Infrastructure Pvt. Ltd.] A.Y. 2010—11 - 15 - 14. The issue is thus decided against the assessee and in favour of the Revenue. The order of the CIT(A) therefore requires to be set aside on this score. We however note in the same vain that the CIT(A) has not adjudicated the issue on merits. The matter is accordingly remanded back to the CIT(A) for adjudication for applicability of sec. 2(22)(e); sec. 194 and consequent application of sec. 201(1) and s. 201(1A) on merits in accordance with law after taking note of the relevant facts on record. It shall be open to the assessee to adduce evidences and make representations before CIT(A) on aspects concerning merits of applicability of sec. 201(1/201(1A) in the facts of case.
In the result, the appeal of Revenue is allowed for statistical purpose.
This Order pronounced in Open Court on 04/09/2019
Sd/- Sd/- (MAHAVIR PRASAD) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 04/09/2019 TANMAY TRUE COPY आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।