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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI AMARJIT SINGH & SHRI AMARJIT SINGHSmt. K.G. Mittal
1 ITA No.1703/Mum/2020 A.Y. 2011-12 DCIT(TDS), Circle-1(2) Vs. M/s Future Enterprises Ltd.
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI
BEFORE SHRI AMARJIT SINGH (JUDICIAL MEMBER) AND SHRI AMARJIT SINGH (ACCOUNTANT MEMBER)
ITA No.1703/MUM/2020 (Assessment Year: 2011-12)
DCIT (TDS), Circle-1(2) M/s Future 8th Floor, R. No. 813, Vs. Enterprises Limited (Earlier known as Future Smt. K.G. Mittal Retail India Pvt. Ltd.) Ayurvedic Hospital Bldg Ground Floor, Charni Road W), Knowledge House, Off Mumbai – 400002 Jogeshwari Vikhroli Link Road, Shyam Nagar, Jogeshwari East, Mumbai 400 060
PAN No. AAACP6317L
(Revenue) (Assessee)
Assessee by : Shri Dinkle Hariya Revenue by : Shri Achal Sharma
Date of Hearing : 24/01/2022 Date of pronouncement : /01/2022
ORDER PER AMARJIT SINGH, A.M: The present appeal filed by the revenue and directed against the order of the Ld. CIT(A)-59, Mumbai, which in turn arises from the order passed by the A.O u/s 201(1)/201(1A) dated 26.03.2018. The revenue has assailed the impugned grounds before us:
2 ITA No.1703/Mum/2020 A.Y. 2011-12 DCIT(TDS), Circle-1(2) Vs. M/s Future Enterprises Ltd.
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the amendment for extension of limitation period to 7 years from the end of the financial year was provided by the Finance Act, 2014 w.e.f. 01.10.2014. The assessee's case is covered by the pre-amended provision of section 201(3) of the Act and the order u/s 201 was supposed to be passed before the expiry of 2 years from the end of the relevant financial year. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not deciding the issue whether the TDS on Common Area Maintenance charges was deductible u/s 194I and not u/s 194C as deducted by the assessee. 3. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of Assessing Officer be restored. 4. The appellant craves leave to amend, alter, delete or add grounds which may be necessary.”
The fact in brief is that assessee is a company engaged in the business of manufacturing and retailing in readymade garments and other products. The assessee has taken various licensed premises from Runwal Developer Pvt. Ltd. in R City Mall Ghatkopar on leave and license basis. A survy action was conducted by DCIT (TDS), Mumbai on Runwal Group of Builders which operates various mall in Thane and Ghatkopar area. During the course of survy it was revealed that the deductees being tenant of the units/shops have been making payment to the group for occupancy of the units/shops in the form of under the head lease rent. It was also noticed during the survey that deductees/tenants had deducted TDS @ 2% by considering the same to be covered under the provisions of Sec. 194(c) of the Act. It was observed that the payment made was related to the rental activities, therefore, tax should have been deducted @ 10% as against deduction of tax made at 2% of the payment made. It was noticed that the assessee has made such payments on account of occupation of the units/shops at R City Mall Ghatkopar of R City Mall Developer Pvt. Ltd. During the financial year relevant to the assessment year under consideration the assessee had made payment of
3 ITA No.1703/Mum/2020 A.Y. 2011-12 DCIT(TDS), Circle-1(2) Vs. M/s Future Enterprises Ltd.
Rs.5,33,97,180/- towards AC maintenance, house keeping and security etc by deducting TDS @ 2% u/s 194 of the I.T. Act. Therefore, the A.O issued show cause to the assessee to explain why not the tax was deducted @ 10% instead of 2% on the said payment made by the assessee company. The assessee had furnished the required detail and explained that it was not a payment for use of assets of the mall rather it was for maintenance of the mall. Therefore, TDS was made in accordance with provision of Sec. 194 of the Act and not Section 194(i) of the Act. The A.O had not accepted the submission of the assessee and stated that this payment was directly related to the rental activity, therefore, TDS was required to be made @ 10% as per the provisions of Sec. 194(1) of the Act and not Sec. 194(C) of the Act. Therefore, the A.O observed that there was a shortfall of deduction of TDS by 8%. Consequently, the AO computed liability of the assessee to the amount of Rs.81,16,373/-which included the outstanding TDS amount of Rs.42,71,775/- u/s 201(1) of the Act and late payment of interest of Rs.38,44,598/- u/s 201(1A) of the Act up to the month of March, 2018.
Aggrieved, the assessee carried the matter in appeal before the CIT(A). The ld. CIT(A) allowed the appeal of the assessee holding that the order passed u/s 201(1)/201(1A) of the Act was time barred since the order dated March 26, 2018 was passed after expiry of two years from the financial year in which the regular TDS statement were filed.
Heard both the side and perused the material on record. The assessee has filed regular statement of 4th quarter of Financial Year 2010-11 on 14th May, 2011. The provision of sub-section (3) of Sec. 201 of the Act are as under:
4 ITA No.1703/Mum/2020 A.Y. 2011-12 DCIT(TDS), Circle-1(2) Vs. M/s Future Enterprises Ltd.
“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 seven years from the end of the financial year in which payment is made or credit is given or two years from the end of the financial year in which the correction statement is delivered under the proviso to sub-section (3) of section 200, whichever is later.”
The period of limitation to 7 years from the end of the F.Y. was provided by the Finance Act, 2014 prior to it Sec. 201(3) of the Act applicable from 01.04.2010 read as under:
“(3) No order shall be made under sub-section (1) deeming a person to be an assessee in default for failure to deduct the whoel or any part of the tax from a person resident in India, at any time after the expirty of – 1. Two years from te end of the financial year in which the statement is file din case where the statemnt referred to in section 200 has been filed. 2. Six years from the end of the financial year in which payment is made or credit is given, in any other case.”
In this regard, we have also gone through the judicial pronoucements referred by the ld. Counsel in the case of Tata Teleservices Vs Union of India (2016) 385 ITR 497 (Guh HC) wherein it is held as under:
“IT: Section 201(3)as amended by Finance Act No. 2 of 2014 shall not be applicable retrospectively and therefore, no order under section 201(1) could be passed for which limitation had alrady expired prior to amended section 201(3) as amended by Finance Act No. 2 of 2014 came into force.”
, and in the case of Troikaa Pharmaceutical ltd. Vs. Union of India (2010) 68 taxman.com 229 (Guj HC), wherein it is held as under:
“IT: where, assessee filed TDS statements as required under section 200, period of limitation for initiating proceedings under Sec. 201(1) for failure to deduct or pay tax would be two years from end of relevant financial year in which such statements were filed.” We have also gone through the decision of the coordinate bench of ITAT, Mumbai referred in Sodexo SVC India (P) Ltd. Vs. DCIT [(2019) 72 ITR (T) 132 (Mum Trib.)] where it is held as under:
5 ITA No.1703/Mum/2020 A.Y. 2011-12 DCIT(TDS), Circle-1(2) Vs. M/s Future Enterprises Ltd.
“Income Tax: Increased limitation of seven years under section 201(3) as amended by Finance (No.2) Act, 2014 with effect from 1.04.0214, shall not apply retrospectively to orders which had alrady become time barred uner old time liitation of two years as set out by unamended section 201(3)(i) and, thus, no order under section 201(1)201(1A) deeming tax deductor to be assessee in default can be passed if limitation has already expired as on 1.04.2014.”
After taking into consideration the ratio of te judicial pronoucements as supra we consider that the order u/s 201(1) of the Act ought to have been passed by 31st March, 2014 i.e within 2 years from the end of the financial year in which the statement was filed however, the impuged order has been passed to 26th March, 2018, therefore,the limitation period as per the pre-amended provision had already expired, therefore, we do not find any infirmity in the decision of the ld. CIT(A). Accordingly, the appeal of the revenue stand dismissed.
Resultantly, the appeal filed by the revenue is dismissed. Order pronounced in the open court on .01.2022
(AMARJIT SINGH) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated .01.2022 Rohit, PS आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / The CIT(A) 3. आयकर आयु�(अपील) / Concerned CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Mumbai 5. गाड� फाईल / Guard file. 6. आदेशानुसार/BY ORDER, स�ािपत �ित //True Copy//
( Asst. Registrar) ITAT, Mumbai