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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI PARTHA SARATHI CHAUDHURY, JM
आयकर अपीलीय अिधकरण “बी” �यायपीठ पुणे म� । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM आयकर अपील सं. / ITA No.1515/PUN/2014 िनधा�रण वष� / Assessment Year : 2007-08 Sandvik Asia Private Limited, Mumbai – Pune Road, Dapodi, Pune. .......अपीलाथ� / Appellant PAN : AACCS6638K बनाम / V/s. DDIT, International Taxation – II, ……��यथ� / Respondent Pune. आयकर अपील सं. / ITA No.1570/PUN/2014 िनधा�रण वष� / Assessment Year : 2007-08 DDIT, International Taxation – II, .......अपीलाथ� / Appellant Pune. बनाम / V/s. Sandvik Asia Private Limited, Mumbai – Pune Road, Dapodi, Pune. ……��यथ� / Respondent PAN : AACCS6638K आयकर अपील सं. / ITA No.50/PUN/2014 िनधा�रण वष� / Assessment Year : 2008-09 DDIT, International Taxation – II, .......अपीलाथ� / Appellant Pune. बनाम / V/s. Sandvik Asia Private Limited, Mumbai – Pune Road, Dapodi, Pune. ……��यथ� / Respondent PAN : AACCS6638K
2 Sandvik Asia Private Limited.
आयकर अपील सं. / ITA No.61/PUN/2014 िनधा�रण वष� / Assessment Year : 2008-09 Sandvik Asia Private Limited, Mumbai – Pune Road, Dapodi, Pune. .......अपीलाथ� / Appellant PAN : AACCS6638K बनाम / V/s. DDIT, International Taxation – II, ……��यथ� / Respondent Pune. Assessee by : Shri Nikhil Pathak Revenue by : Shri Sudhandu Das सुनवाई क� तारीख / Date of Hearing : 07.01.2019 घोषणा क� तारीख / Date of Pronouncement : 11.01.2019 आदेश / ORDER PER D. KARUNAKARA RAO, AM: There are two set of cross-appeals under consideration involving the two different assessment years i.e. A.Y. 2007-08 and 2008-09 relating to the orders dated 25.03.2013 and 25.02.2013 passed u/s 201(1) & 201(1A) of the I.T. Act, 1961 respectively. 2. In these appeals, the assessees failure to make the deduction when the payments are made to the AEs or credited is the common issue for the Assessing Officer to invoke the provisions of section 201(1) & 201(1A) of the
3 Sandvik Asia Private Limited. Act. Without going into the merits of requirement of making TDS on such payments to the AEs abroad, ld. Counsel for the assessee submitted that the issue of validity of such orders of the Assessing Officer was questioned before the CIT(A) vide ground no.1 (in Form No.35) of the appeals’ papers. The CIT(A) adjudicated this issue in para 2.1.1 to 2.1.5 of his order and, relying on his finding for the assessment years 2008-09 and 2009-10, held that the time limitation of six years provided in clause (ii) of sub-section (3) to section 201 of the Act expired on 31.03.2013. Therefore, the CIT(A) upheld the order passed on 25.03.2013 as valid one for the assessment year 2007-08. Similarly, the order passed on 25.02.2013 for the assessment year 2008-09 was also held valid. Accordingly, the CIT(A) dismissed the legal submission made by the assessee before him.
Aggrieved with the above findings of the CIT(A), the assessee is in appeal for both the years before the Tribunal with the common legal issue raised in ground of appeal no.1. The said ground no.1 is extracted as follows :- “The Learned Commissioner of Income-tax (Appeals) – IT/TP [‘Ld. CIT(A)’] has erred in holding that the order under section 201(1) and 201(1A) of the Act has been passed within the time frame provided under section 201 of the Act.” 4. Before us, on this legal issue and without going into the merits of requirement of making the TDS on the payments made by the assessee, ld. Counsel for the assessee submitted that the CIT(A) erred in upholding the said order passed on 25.03.2013 for the assessment year 2007-08 and 25.02.2013
4 Sandvik Asia Private Limited. for the assessment year 2008-09 respectively. In this regard, ld. Counsel brought our attention to the pre-amended provisions of the Act which are applicable to the years under consideration and read out the same. Mentioning that there is a proviso to section (3) of section 201 of the Act, ld. Counsel submitted that the orders passed for the financial year commencing on or before 01.04.2007 need to be passed at any time on or before 31.03.2011. This is the legal position prior to 01.04.2010 vide the said proviso to sub-section (3) of section 201 of the Act, the same stands substituted by the Finance (No.2) Act, 2014 w.e.f. 1.10.2014 providing a time limitation of 6 years from the end of the financial year in which the payment is made or credit is given. Mentioning that the financial years under consideration, i.e. F.Y. 2006-07 and 2007-08, these financial years are covered by the said proviso, in which case, the orders should have been passed at any time before 31.03.2011. In the instant case, the orders passed on 25.03.2013 for the assessment year 2007-08 and 25.02.2013 for the assessment year 2008-09 respectively. Therefore, the Assessing Officer’s orders are invalid legally. Therefore, the CIT(A) erred in not considering the provisions of the proviso to sub-section (3) of section 201 of the Act.
On hearing both the sides, we proceed to extract the pre-amended provisions of sub-section (3) of section 201 of the Act :- “Substituted for “it” by the Finance Act, 1996, w.e.f. 1-4-1996. Sub-sections (3) and (4) inserted by the Finance (No.2) Act, 2009, w.e.f. 1-4-2010.
5 Sandvik Asia Private Limited. Substituted by the Finance (No.2) Act, 2014, w.e.f. 1-10-2014. Prior to its substitution, sub-section (3), as amended by the Finance Act, 2012, w.r.e.f. 1-4- 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 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: 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” 6. From the above extracted provisions, it is specially provided in Law that the orders for the financial year commencing from 01.04.2007 i.e. A.Y. 2008-09 and earlier assessment years, the orders u/s 201(1) & 201(1A) of the Act are required to be passed on or before 31st March, 2011. Whereas, in the instant cases i.e. relating to assessment years 2007-08 and 2008-09, the orders passed on 25.03.2013 for the assessment year 2007-08 and 25.02.2013 for the assessment year 2008-09 respectively, makes the orders invalid and unsustainable. Accordingly, we order.
Therefore, the assessee is entitled to relief on legal issue for both the assessment years under consideration. Considering the same, adjudication of the issue on merits becomes academic exercise in both the appeals of the assessee as well as the Revenue.
6 Sandvik Asia Private Limited. 8. In the result, the appeals of the Revenue are dismissed and the appeals of the assessee are partly allowed. Order pronounced on 11th January, 2019. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (D. KARUNAKARA RAO) �याियक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 11th January, 2019 Sujeet आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT (Appeals)-IT/TP, Pune. 4. The CCIT, Pune. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “बी” ब�च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.