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Income Tax Appellate Tribunal, DELHI BENCH ‘B’NEW DLEHI
Before: SHRI O.P.KANT & SHRI K. NARASIMHA CHARY
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’NEW DLEHI BEFORE SHRI O.P.KANT, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER I.T.A.No. 1964/Del/2017 Assessment Year: 2011-12
CivitechDevelopers (P) Ltd, vs ITO, Ward-73 (4) 65, ShreshtaVihar, New Delhi Delhi PAN AAECCO0108J (Appellant) (Respondent) Appellant by: Shri Sanjay Kumar, FCA Shri Akarsh Garg, Advocate Shri TarunBhati, Advocate Respondent by: Ms. Ashima Neb, Sr.DR Date of hearing: 04.09.2019 Date of order : 30.10.2019 ORDER PER K. NARASIMHA CHARY, J.M. Aggrieved by the order dated 25.01.2017passed by the learned Commissioner of Income Tax (Appeals)- 41, New Delhi(“Ld. CIT(A)”), the assessee, namely M/sCivitech Developers P. Ltd. filed this appeal in respect of the Assessment year 2011-12. 2. Brief facts of the case are that the assessee company was incorporated on 18/6/2010 with the main object to carry out activity as
real estate developer.Under the lease deed dated 31/08/2010 the assessee was assigned a plot by the Noida for the purpose of constructing residential Flats. During the financial year 2009-10 the assessee had made payment of lease rentals to Noida Authority, but without deducting TDS on such payment. Learned Assessing Officer, therefore, passed an order under section 201(1)/201(1A) of the Income Tax Act, 1961 (for short “the Act”) holding that the lease rentals paid by the assessee attracted TDS provisions under section 194-I of the Act by holding it as assessee in default and demanded to the tune of Rs.4,25,190/-was raised under section 201(1) of the Act and interest thereon. Interest component was subsequently modified by order dated 23/4/2015 under section 154 of the Act. 3. Aggrieved by the action of the learned Assessing Officer, Assessee preferred appeal before the Ld. CIT(A). It was contended by the assessee before the Ld. CIT(A) that the impugned order under section 201(1)/201(1A) of the Act on 17/3/2015 was clearly barred by limitation as mentioned in section 201(3)(i) of the Act. 4. Ld. CIT(A), after referring to the provisions under section 201 (3) of the Act held that the order for the Financial year 2010-11 passed on 17/3/2015 was well within the limitation provisions contained in section 201(3)(i) of the Act. Aggrieved by the said findings, assessee preferred this appeal. 5. Argument of the Ld. AR is that the amended provisions of section 201(1) of the Act shall be applicable with effect from 1/10/2014 and even considering the fact that the proceedings for the Financial year 2010-11
became time-barred in view of the existing provisions of Section 201of the Act by 31/3/2013, long prior to the amendment in section 201 as amended by the Finance Act, 2014 and, therefore, a right had been accrued in favour of the assessee and considering the fact that when our legislature wanted to give retrospective effect, specifically provided so and therefore, the subsequent amendment of section 201 of the Act will not revive the limitation that had already stood expired prior to the amended provision of Section 201 coming into force. He placed reliance on several decisions including the decision of the Hon’ble Gujarat High Court in the case of Tata Tele services vs UOI (2016) 385 ITR 497 (Guj). 6. Ld. DR heavily relied upon the orders of the authorities below. 7. We have gone through the record in the light of the submissions made on either side. There is no dispute that in this matter the assessee filed their statement referred to in Section 200 of the Act on 14/10/2010 and in view of the provisions of section 201(3) of the Act, such time was two years from the end of the financial year in which the statement was filed. Such limitation period expires by 31/3/2013, before which no order under subsection (1) of section 201(1) and 201(1-A) of the Act was passed. Authorities below relied on the amended provisions of Section 201(3) of the Act as amended by the Finance Act, 2004 which came into effect from 1/4/2010, whereas the contention of the assessee has been that the law as prevailing on the date of expiry of limitation has to prevail over the amended provisions of section 201of the Act, which came into force one year after the expiry of the limitation.According to Ld. AR, subsequent extension of the period of limitation will not infuse life into the already dead proceedings.
It is therefore clear that the question that falls for our consideration is, whether Section 201(1) of the Act as amended on 1/10/2014 by Finance Act, 2014 would be applicable retrospectively or prospectively and whether the said provision would be applicable with respect to the proceedings under the Act for Assessment Year 2011-12, the proceedings which had already became time-barred on 31/3/2013, long prior to the amendment in Section 201 (3) of the Act by Finance Act, 2014?
Substantially the very same question that had fallen for consideration before the Hon’ble Gujarat High Court in the case of Tata Tele services (supra) wherein the Hon’ble High Court summarises the law on this aspect, and observed that,- “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. 12.7 At this stage, it is required to be noted that subsection (3)(i) of section 201 came to be introduced by Finance Act No.2 of 2009 which 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 31st day of March, 2011. As per Memorandum of Finance Bill No.2 of 2009, in respect of F.Y.2007-08 and earlier years only proceedings that were
pending could be completed by 31/3/2011 and as such no fresh proceedings could be commenced for the said period. … … … 12.10 At this stage, it is required to be noted that in the present cases, limitation for passing orders as per the provisions prevailing at the relevant time and even as provided under section 201(3)(i) as amended by Finance Act of 2012 had already expired on 31/3/2011 and 31/3/2012, respectively. 12.11 That thereafter, section 201(3) of the Act has been further amended by Finance Act No.2 of 2014 w.e.f. 1/10/2014, by which, time limit provided under section 201(3)(ii) of the Act for passing order under section 201(1) of the Act came to be extended by one year and it also provides that no orders shall be made under sub-section (1) holding a person to be in default for failure to deduct whole or part of the tax from a person resident in India at any time after expiry of seven years from the end of the financial year in which payment is made or credit is given. 12.12 By Finance Act No.2 of 2012, even distinction between the cases, statement has been filed and where such statement was not filed also has been removed and the amendment prescribes a common period of limitation i.e. seven years from the end of the financial year in which payment was made. … … … 12.14 At this stage, it is required to be noted that earlier section 201(3) of the Act as amended by Finance Act, 2012 amended on 28/5/2012 was specifically made applicable retrospectively w.e.f. 1/14/2012, whereby limitation period was substituted from four years to six years for passing orders where TDS Statement had not been filed. However, section 201(3) of the Act as amended by Finance Act No.2 of 2014, as mentioned in the memorandum of the Finance Bill No.2 of 2014 is stated to have effect from 1st October, 2014. Thus, wherever the Parliament / Legislature wanted to make provisions applicable retrospectively, it has been so provided. 12.15 At this stage, it is required to be noted that while making amendment in section 201(3) of the Act by Finance Act No.2 of 2014, does not so specifically provide that the said amendment shall be made applicable retrospectively. 12.16 On the other-hand, it is specifically stated that the said amendment will take effect from 1/10/2014. As observed hereinabove,
in the present cases, limitations provided for passing order under section 201(1) of the Act for A.Y. 2007-08 and 2008-09 had already been expired on 31/3/2011 and 31/3/2012, respectively, i.e. prior to section 201(3) came to be amended by Finance Act No.2 of 2014. … … … 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 Act No.2 of 2014 shall not be applicable retrospectively and therefore, no order under section 201(i) 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.” 10. Similar was the view taken in the case of Troikaa Pharmaceuticals Ltd vs Union of India (2016) 68 taxmann.com 229 (Guj) and the CC Technologies Ltd vs ITO (2016) 71 taxmann.com 66 (Chennai-Trib) wherein it was held that the limitation for initiating proceedings under section 201(1) of the Act would be governed by section 201 (3) (i) of the Act as it stood at the relevant time which provided for limitation. In this case such period of limitation is two years from the end of the financial year in which statement was filed.
In view of this settled principle of law governing the aspect in question, while respectfully following the same, we are of the considered opinion that the proceedings in question were barred by limitation and the subsequent amendment extending the period of limitation does not revive the proceedings already barred by expiry of limitation period. The order dated 17/3/2015 passed under section 201(1)/201(1A) of the Act by the learned Assessing Officer is bad under law and cannot be sustained. The same is accordingly quashed. 12. In the result, appeal of the assessee is allowed. Pronounced in open court on this the 30th October, 2019. Sd/- sd/- (O.P.KANT) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 30th October, 2019 ‘VJ’ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Draft dictated 18.10.2019 Draft placed before author 22.10.2019 Approved Draft comes to the Sr.PS/PS Order signed and pronounced on File sent to the Bench Clerk Date on which file goes to the AR Date on which file goes to the Head Clerk. Date of dispatch of Order. Date of uploading on the website