MUNICIPAL CORPORATION JAIPUR,JAIPUR vs. DCIT(TDS) JAIPUR, JAIPUR

ITA 830/JPR/2026Status: DisposedITAT Jaipur08 October 2026AY 2010-118 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the order dated 30.03.2017 passed by the AO under section 201(1) of the Act for the financial year 2009-10 was indeed passed after the expiry of the period of limitation prescribed under section 201(3) of the Act. The assessee had filed TDS statements for all four quarters of the financial year 2009-10, with the last statement filed on 30.05.2010. Under section 201(3)(i) as it stood before 01.10.2014, the limitation for passing an order expired on 31.03.2013. The substituted provision by the Finance (No. 2) Act, 2014, which extended the period to seven years, came into effect from 01.10.2014. On this date, the limitation under the earlier provision had already expired, and a right to plead the bar of limitation had accrued to the assessee. The Tribunal, following the Gujarat High Court's decision in Tata Teleservices v. Union of India, held that the substituted provision did not revive a period that had already expired. Consequently, the order under section 201(1) was quashed as being without jurisdiction. The consequential interest under section 201(1A) was also set aside. Grounds relating to the merits of the demand under section 194C and the CIT(A)'s refusal to consider evidence were rendered academic and left undecided.

What were the facts?

The assessee, Municipal Corporation Jaipur, filed an appeal against the order of the Additional/Joint CIT(A) dated 31.01.2026, which upheld the order of the DCIT(TDS) Jaipur dated 30.03.2017. The DCIT(TDS) had initiated proceedings under sections 201(1) and 201(1A) of the Income Tax Act, 1961, for assessment year 2010-11 (relevant financial year 2009-10). The AO held the assessee in default for short deduction of tax on advertisement contracts and non-deduction on contingency, agreement, and development work payments, raising a total demand of Rs 13,20,520. The CIT(A) partly allowed the appeal, sustaining demand for advertisement expenses and payments to ex-servicemen welfare societies, but deleting demand for interest paid to HUDCO. The CIT(A) also declined to consider documentary evidence for other payees due to non-filing of a Rule 46A application.

What were the issues?

1. Whether the order passed by the DCIT(TDS) under section 201(1) of the Act for the financial year 2009-10 is time-barred, considering the provisions of section 201(3) of the Act as it stood before and after amendment by the Finance (No. 2) Act, 2014. Assessee's Contention: The assessee argued that the order was time-barred as the limitation period under section 201(3)(i) of the Act, which was two years from the end of the financial year in which the TDS statement was filed (expiring on 31.03.2013), had already expired before the substituted provision of seven years by the Finance (No. 2) Act, 2014 (effective from 01.10.2014) came into force. They relied on the Gujarat High Court judgment in Tata Teleservices v. Union of India. The assessee also contended that if the order under section 201(1) is bad, the interest under section 201(1A) cannot survive. Revenue's Contention: The revenue supported the orders below, arguing that the order dated 30.03.2017 was passed within seven years from the end of the financial year 2009-10, as per the substituted section 201(3) in force on the date of the order. They also submitted that the plea of limitation was given up before the CIT(A).

Which sections of the Income-tax Act were involved?

Section 201,Section 201(1),Section 201(1A),Section 201(3),Section 201(3)(i),Section 201(3)(ii),Section 194C,Section 194A(3)(iii)(f),Section 200,Section 46A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Shri Kuldip Singh & Shri Prakash

PER : PRAKASH, ACCOUNTANT MEMBER:-

1.

This appeal by the Assessee is directed against the order of the learned Additional/Joint Commissioner of Income Tax (Appeals), Faridabad [hereinafter referred to as "the learned CIT(A)"] dated 31.01.2026 passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), arising out of the order dated 30.03.2017 passed by the Deputy Commissioner of Income Tax (TDS), Jaipur (hereinafter referred to as "the AO") under sections 201(1) and 201(1A) of the Act for the assessment year 2010-11. Municipal Corporation Jaipur

2.

There is a delay of 01 day in filing this appeal before us. The asses

The order continues below.

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