ACIT (TDS) -2(1), MUMBAI vs. OMKAR REALTORS AND DEVELOPERS PVT. LTD., MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “C”, MUMBAI BEFORE SHRI RAJESH KUMAR (AM) AND SHRI RAM LAL NEGI (JM) Assessment Year: 2010-2011 The Asst. Commissioner of Income Omkar Realtors and Developers Tax (TDS) – 2(1), Pvt. Ltd., Room No. 615, 6th Floor, Omkar House, Off Eastern Smt. K.G. Mittal Ayurvedic Hospital Vs. Express Highway, Bldg., Charni Road (W), Opp. Sion Chunabhatti Signal, Mumbai - 400002 Sion, Mumbai - 400022 PAN: AAACO7919F (Appellant) (Respondent) CO No. 237/MUM/2019 (Arising out of ITA No. 6814/MUM/2018) Assessment Year: 2010-2011 Omkar Realtors and Developers Pvt. The Asst. Commissioner of Ltd., Income Tax (TDS) – 2(1), Omkar House, Off Eastern Express 6th Floor, Smt. K.G. Mittal Highway, Vs. Ayurvedic Hospital Bldg., Charni Opp. Sion Chunabhatti Signal, Sion Road (West), East, Mumbai - 400022 Mumbai - 400002 PAN: AAACO7919F (Appellant) (Respondent) Assessment Year: 2011-2012 The Asst. Commissioner of Income Omkar Realtors and Developers Tax (TDS) – 2(1), Pvt. Ltd., Room No. 615, 6th Floor, Omkar House, Off Eastern Smt. K.G. Mittal Ayurvedic Hospital Vs. Express Highway, Bldg., Charni Road (W), Opp. Sion Chunabhatti Signal, Mumbai - 400002 Sion, Mumbai - 400022 PAN: AAACO7919F (Appellant) (Respondent)

CO No. 238/MUM/2019 (Arising out of ITA No. 6815/MUM/2018) Assessment Year: 2011-2012

2 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 Omkar Realtors and Developers Pvt. The Asst. Commissioner of Ltd., Income Tax (TDS) – 2(1), Omkar House, Off Eastern Express 6th Floor, Smt. K.G. Mittal Highway, Vs. Ayurvedic Hospital Bldg., Charni Opp. Sion Chunabhatti Signal, Sion Road (West), East, Mumbai - 400022 Mumbai - 400002 PAN: AAACO7919F (Appellant) (Respondent) Assessment Year: 2012-2013 The Asst. Commissioner of Income Omkar Realtors and Developers Tax (TDS) – 2(1), Pvt. Ltd., Room No. 615, 6th Floor, Omkar House, Off Eastern Smt. K.G. Mittal Ayurvedic Hospital Vs. Express Highway, Bldg., Charni Road (W), Opp. Sion Chunabhatti Signal, Mumbai - 400002 Sion, Mumbai - 400022 PAN: AAACO7919F (Appellant) (Respondent) CO No. 239/MUM/2019 (Arising out of ITA No. 6816/MUM/2018) Assessment Year: 2012-2013 Omkar Realtors and Developers Pvt. The Asst. Commissioner of Ltd., Income Tax (TDS) – 2(1), Omkar House, Off Eastern Express 6th Floor, Smt. K.G. Mittal Highway, Vs. Ayurvedic Hospital Bldg., Charni Opp. Sion Chunabhatti Signal, Sion Road (West), East, Mumbai - 400022 Mumbai - 400002 PAN: AAACO7919F (Appellant) (Respondent) Revenue by : Shri Rajesh Kumar Mishra (DR) Assessee by : Shri Dharmesh Shah (AR) Date of Hearing: 02/03/2020 Date of Pronouncement: 20/04/2020

O R D E R PER BENCH These are the appeals and cross objections filed by the revenue and the assessee respectively against the three separate orders dated 19.09.2018

3 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 passed by the Commissioner of Income Tax (Appeals) (for short ‘the CIT (A)’)-60, Mumbai, for the assessment years 2010-11, 2011-12 and 2012-13, whereby the Ld. CIT (A) has partly allowed the appeals filed by the assessee against the orders passed by the AO u/s 201 (1)/201 (1A) of the Income Tax Act, 1961 (for short ‘the Act’). Since all the appeals and cross objections pertain to the same assessee and the issues involved are common, these appeals were clubbed, heard together and are being disposed of by this common order for the sake of convenience. We therefore, take the facts of the appeal pertaining to the Assessment Year (AY) 2010-11 as a lead case. CO No. 237/MUM/2019 (Assessment Year: 2010-2011 The assessee company is engaged in the business of real estate development. On 08.03.2017, a survey action u/s 133A (2A) was conducted at the premises of M/s Omkar Realtors and Developers Pvt. Ltd. During the course of survey, it was noticed that the assessee had defaulted in deducting TDS for the assessment year 2010-11 on the payments of advance for future projects and compensation for alternative accommodation. Accordingly, the AO issued notice u/s 201 (1)/201(1A) of the Act on 15.03.2017 calling various details. In response thereof, the authorized representative attended and filed the details called for. During the course of survey, it was noticed that during the year relevant to the assessment year under consideration, the assessee had given advances for future projects to M/s Iraki Trading Company amounting to Rs. 3,95,00,000/- and M/s Tarun Enterprises amounting to Rs. 4,00,00,000/- and the assessee did not deduct TDS u/s 194H of the Act. During the assessment proceedings, the assessee contended that since these advances were given at a time when the developer had not even finalized the project, the assessee was not liable for TDS. Similarly, it was further noticed that the assessee had paid Rs. 26,02,34,080/- on account of compensation for alternative accommodation without deducting tax at source. The assessee contended that as per the terms of development agreement, the assessee was required to provide alternative accommodation to the tenants as they had to vacate the building for the purpose of construction. Since the assessee was not 4 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 able to provide alternative accommodation to the tenants, the assessee agreed to pay compensation for enabling them to meet the expenditure to be incurred for alternative accommodation. Therefore, the payment made by the assessee does not come within the purview of rent as prescribed in the said provision. Moreover, the assessee had not paid such payment for use of any land, building etc. The AO rejecting the contention of the assessee treated the assessee to be defaulter within the meaning of section 201 (1A) for not deducting TDS u/s 194H on account of payment of Rs. 7,95,00,000/- paid for future project and defaulter within the meaning of section 201 (1A) for not deducting tax u/s 194I on account of payment made as rent for alternative accommodation amounting to Rs. 26,02,34,080/-. Accordingly, the AO directed the assessee to pay Rs. 6,65,87,880/-. The assessee challenged the assessment order on legal ground as well as on merits. The Ld.CIT (A) after hearing the assessee decided the issue raised on merits in favour of the assessee by following the decisions of the Mumbai Tribunal rendered in Sahana Dwellers (P) Ltd. vs. ITO [158 ITD 78(Mum)] and Shanish Construction Pvt. Ltd. vs. ITO [ITA No.6087/Mum/2014] and deleted the additions, however, dismissed the plea of the assessee that the proceedings initiated by the AO u/s 201(1) of the Act were barred by limitation and therefore void-ab- initio. 2. The revenue has challenged the impugned order passed by the Ld. CIT (A) on the following effective grounds:- “1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) was justified in holding that the payment made to two parties of Rs. 7,95,00,000/- was in nature of advance or loan given as strategic investment and therefore would not come under the ambit of commission/Brokerage, without appreciating the fact brought on record by the AO that the payment made to these parties were for identifying projects for investment and therefore their role was of an agent. Further as they were not owners of any property meant for purchase and therefore such payments are nothing but brokerage/commission in order to acquire suitable property/deal for future project irrespective of the fact that 5 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 that part of the amount was refunded and interest was paid which could be an afterthought.” 2. Whether on facts and in the circumstances of the case and in law, the Ld. CIT (A) was justified in deleting the addition of Rs. 26,02,34,080/- by holding that the assessee company has not entered into any lease or in relationship of tenant and landlord, without appreciating the fact the amount of compensation paid is in nature of rent and is meant for housing needs of the parties who had vacated the land meant for redevelopment and therefore liable to be covered u/s 1941 of the Act.” 3. Before us, the Ld. Departmental Representative (DR) submitted that so far as the finding of the Ld. CIT(A) on merits is concerned, the Ld. CIT(A) has wrongly decided the issues in favour of the assessee. The Ld. DR further submitted that the findings of the Ld. CIT(A) that the payments of Rs. 7,95,00,000/-made to the two parties were in the nature of advance or loan given as strategic investment and therefore do not come within the ambit of commission/brokerage are contrary to the facts and law. Since, the payments were made for identifying projects for investment it can be concluded that the parties received the payments in question towards commission. 4. Similarly, the Ld. DR submitted that the Ld. DR has wrongly deleted the addition of Rs. 26,02,34,080/- by holding that the assessee company had not entered into any lease agreement or there was no relationship of tenant and landlord without appreciating that the amount of compensation paid to the parties was in the nature of rent. Since the assessee was unable to provide alternative accommodation to the tenants, the assessee agreed to pay the said amount for arranging alternative arrangement. Hence, the impugned order is liable to be set aside. 5. On the other hand, the Ld. counsel for the assessee relying on the findings of the Ld. CIT(A) submitted that since the payments in question were not in the nature of commission the assessee was not required to deduct tax u/s 194H of the Act, therefore the Ld. CIT(A) has rightly set aside the order passed by the AO. The Ld. counsel further submitted that the findings of the Ld. CIT(A) are based on the facts of the case and the evidence on record.

6 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 Similarly, the Ld. counsel further submitted that so far as the second issue is concerned, the findings of the Ld. CIT(A) are based on the decisions of the Mumbai Tribunal in the cases of Sahana Dwellers (P) Ltd. v. ITO [158 ITD 78(Mum) ] and Shanish Construction Pvt. Ltd. v. ITO [ ITA No. 6087 & 6088/Mum/2014]. The Ld. counsel accordingly submitted that since there is no infirmity in the findings of the Ld. CIT(A), there is no merit in the findings of the Ld. CIT(A) to interfere with. 6. We have heard the parties and perused the material on record in the light of the rival submissions of the parties. As pointed out by the Ld. counsel for the assessee. The Ld. CIT(A) has set aside the action of the AO holding that since the payment of Rs. 7,95,00,000/- made by the assessee to the said two parties as advances for identification potential joint venture projects and not as commission, the assessee was not liable to deduct tax u/s 194H of the Act. The findings of the Ld. CIT(A) are as under: “Thus in order to classify a payment as commission it is essential that there has to be a principal- agent relationship between a payer and the payee. It must be establish that the recipient has accepted the payment for performing some act on behalf of the payer. In the present case, parties to whom advance has been given does not act on behalf of the assessee for rendering any kind of service.

In fact, in the case of transaction to be characterized as commission, there should be three parties namely the seller, the buyer and the commission agent to whom the commission is paid in the instant case, there are only two parties to the transaction i.e. the appellant and the developer to whom the advance has been made. The AO has treated him the commission agent in spite of the fact no transaction with a third party has been made. At this juncture, it will also be relevant to throw some light on the dynamic of the business.

It is a common practice in the business of the real estate to advance certain amounts to different developer for identification of new potential real estate projects. Once the 7 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 project is identified and business rational is crystallized, it is then taken up for development between the two parties in the form of a joint-venture. At times, if such advances do not convert into actual projects then they are refunded back to the builder by such developer. Each and every transaction of payment to developers” is to be seen separately to identify whether the event of crystallization of the project/deal has taken place yet or not ? It is only the occurrence of the event that the assessee comes to know that how the advance has to be treated. If nothing has taken place then it is to be treated as loan and if it has been fructified or converted in a project then it is to be treated as investment. In the event, when no activity has taken place then the transaction is treated as loan and is to be refunded/rapid with the interest. Thus, the key element is whether the payment has been made in relation to a service rendered or not? In the instant case, even a survey u/s 133A was done and there is no finding to this effect in the order that whether the parties to whom the payment has been made were providing any service to the assessee or not? I have also gone through the accounts to see how this transaction has been classified. The appellant has shown this amount as loan in the audited balance sheet. This was verified from the copy of ledger accounts of the developers. The accounts of developers are having opening and closing balance in the balance sheet as advances. Further, no claim for expense of commission has been claimed by the appellant. In fact, it has not claimed any expense but at the same has shown interest charged on such advance and has been offered as a part of taxable income and further paid tax on that. The assessee has regularly charged interest on the advance for the joint venture project until the project has been crystallized from the developers and this interest is included as a part of the profit in arriving at its taxable income by the3 assessee i.e. offered as income from other sources’ in the return of income and tax is paid on such income. In the relevant years, following has been shown:

Name of Party Interest AY 2009-10 Interest AY 2010-11 M/s Iraki Trading Rs. 51,36,329/- Rs. 50,48,371/-

8 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 Company M/s Tarun Enterprises Rs. 52,10,301/- Rs. 50,48,371/- Total Rs. 1,03,46,630/- Rs. 1,00,96,742/- The developers have also deducted TDS from the payment made to the appellant in regard to the interest charged from them on such advance by the appellant for the identification of potential joint-venture project. Further, the appellant submitted without prejudice that these payments were made in earlier years and not in the year under appeal. It is submitted that the amount in respect of which the Assessing Officer alleged the default of TDs by the appellant is incorrect. It is submitted that the amount of Rs./ 7,95,00,000/- in respect of both these parties represented advances given in the earlier years and no amount has been given in the year under consideration. a) The ledger account of M/s Iraki Trading Company enclosed herewith shows that the party had an opening balance of Rs. 4,84,72,437/-. Against the same, the appellant had received back Rs. 1,40,20,808/- as repayment of the said loan given. Further, the outstanding interest receivable was added to the account amounting to Rs. 50,48,371/-. The account thus shows a closing balance of Rs. 3,95,00,000/- as on 31.03.2010. b) In this similar manner, the ledger account of M/s Tarun Enterprises reflected an opening balance of Rs. 4,90,29,647/-. Against the same, the appellant had received back Rs. 1,41,24,536/- as repayment of the said loan given. The outstanding interest on the said loan was added to the account of Rs. 50,94,889/-. The account thus shows a closing balance of Rs. 4,00,00,000/- as on 31.03.2010. I have gone through these ledger account which exhibits that the advance were made by the appellant in the earlier years and that no advances were given during the year under consideration. Under these circumstances also, the provisions of Section 194H of the Act would not be applicable since there has been no transactions carried out during the year. In view of the same, the appellant should not be treated as assessee in default in respect of the amount of Rs. 7,95,00,000/-.

9 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 Thus, in absence of any agent-principal relationship between the appellant and the payee, the transaction cannot be called to be payment of commission as all the ingredients of commission payment is missing and hence the appellant cannot be treated as deemed defaulter on account of this transaction. Since, the payments made by the appellant is in the form of advances for identification of potential joint-venture projects and not commission, the provision of section 201 read with section 194H cannot be invoked and have wrongly been invoked by the AO. Accordingly, the appeal is allowed on these grounds.”

“I have gone though the facts of the case, grounds of appeal and the appellant’s factual as well as legal submission. The appellant has stated that it has not paid any rent to any land lord for any accommodation while making this payment. Further, the appellant has also not made any payment in 10 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 respect of lease/sub-lease or tenancy between the appellant and any of the slum dwellers. There is no relationship of land lord and tenant between the appellant and slum dwellers. The appellant’s role is only to provide concrete houses on the slum land and till the time such building/houses are ready, either provide any temporary accommodation to them or pay compensation so that such slum dwellers avail suitable accommodation for themselves. This compensation/payment cannot be compared with rent within the meaning of section 194-I of the Act. Further, the appellant has also cited two decisions of Hon’ble Mumai Tribunal namely

12 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 10. The assessee has filed CO No. 237/M/2019, challenging the findings of the Ld. CIT(A) by raising the following effective ground: 1. The Ld. CIT (A) has erred in law and in facts in not appreciating that order passed by Assessing Officer was invalid and void ab initio. 2. The Ld. CIT (A) erred in law and in facts in confirming the validity of the order passed by Assessing Officer without appreciating that the order passed by him was time barred and hence void ab initio.

13 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 TDS statement, the limitation period of two years remained unchanged. The aforesaid sub–section (3) of section 201 was again amended by Finance Act, 2014, w.e.f. 1st October 2014 by substituting the earlier provision with the following:– “(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 seven years from the end of the financial year in which payment is made or credit is given.” 9. Thus, as could be seen from the aforesaid amended provision a uniform limitation period of seven years from the end of relevant financial year wherein payments made or credit given was made applicable. The issue before us is, whether the un–amended sub– section (3) which existed before introduction of amended sub–section (3) by Finance Act, 2014, will apply to assessee’s case or not. It is the case of the assessee that, since, clause (i) of sub–section (3) of section 201 is applicable to the assessee and the limitation period of two years has expired by the time the provision was amended by Finance Act, 2014, the extended period of limitation of seven years as per the amended provision will not apply. Whereas, it is the case of the Department that the amended sub–section (3) brought into the statute by Finance Act, 2014, will apply retrospectively, hence, the impugned order passed by the Assessing Officer within the period of seven years is valid. It is a fact on record that by the time the amended provisions of sub–section (3) was introduced by Finance Act, 2014, the limitation period of two years as per clause (i) of sub– section (3) of section 201 (the un–amended provision) has already expired. The learned Commissioner (Appeals) has applied the amended provision of sub–section (3) of section 201 by referring to the objects for making such amendment and on the reasoning that the said provision being a machinery provision will apply retrospectively. However, on a careful perusal of the objects for introduction of the amended provision of sub– section (3), we do not find any material to hold that the legislature intended to bring such amendment with retrospective effect. If the legislature intended to apply the amended provision of sub–section (3) retrospectively it would definitely have provided such retrospective effect expressing in clear terms while making such amendment. This view gets

14 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 support from the fact that while amending sub–section (3) of section 201 by Finance Act, 2012, by extending the period of limitation under sub–clause (ii) to six years, the legislature has given it retrospective effect from 1st April 2010. Since, no such retrospective effect was given by the legislature while amending sub–section (3) by Finance Act, 2014, it has to be construed that the legislature intended the amendment made to sub–section (3) to take effect from 1st October 2014, only and not prior to that. The Hon'ble Supreme Court in Vatika Township Pvt. Ltd. (supra) while examining the principle concerning retrospectivity of an amendment brought to the statutory provisions has observed that unless a contrary intention appears, a legislation is presumed not to be intended to have retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. The Hon’ble Court observed, legislations which modified accrued rights or which impose obligations or imposes new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect. It was observed, if a provision is not for the benefit of a community, but, imposes some burden or liability the presumption would be it will apply prospectively. The rule against retrospective operation is a fundamental rule of law that no statute shall be construed to have retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication. Similar view has been expressed in the case of Reliance Jute and Industries Ltd. (supra) as well as Shah Sadiq & Sons (surpa). In case of Tata Teleservices (supra), which is directly on the issue of retrospective application of the amended sub– section (3) of section 201, the Hon’ble Gujarat High Court, after extensively dealing on the issue of retrospective applicability of the provisions and applying the principles laid down by the Hon'ble Supreme Court in a number of cases, held as under:– “15.00. 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.

15 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 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. Following the aforesaid decision of the Hon'ble Gujarat High Court in Troykaa Pharmaceuticals Ltd. (supra) again expressed the same view. “7. Examining the facts of the present case in the light of the principles enunciated in the above decision, the present case relates to financial year 2008-2009. The petitioner had filed statements as required under section 200 of the Act. The limitation for initiating proceedings under section 201(1) of the Act would, therefore, be governed by section 201(3)(i) of the Act as it stood at the relevant time which provided for a period of limitation of two years from the end of the financial year in which statement was filed in a case where the statement referred to in section 200 has been filed. The limitation for initiating action under section 201(1) of the Act, therefore, elapsed on 31st March, 2012 whereas the amendment in section 201 of the Act as amended by Finance Act No. 2 of 2014 came into force with effect from 28th May, 2012. The impugned notice, therefore, is clearly barred by limitation and, therefore, cannot be sustained. For the detailed reasons recorded in the judgment and order dated 5th February, 2016 rendered in the case of Tata Teleservices v. Union of India (supra), this petition also deserves to be allowed.”

16 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 11. No contrary decision has been brought to our notice by the learned Departmental Representative. Therefore, considering the principle laid down by the Hon'ble Supreme Court in the decisions as well as the ratio laid down by the Hon'ble Gujarat High Court in the decisions referred to above which are directly on the issue, we hold that the order passed under section 201(1) and 201(1A) having been passed after expiry of two years from the financial year wherein the TDS statements were filed by the assessee under section 200 of the Act, is barred by limitation, hence, has to be declared as null and void.” 14. In the said case, a survey u/s 133A (2A) was conducted in the business premises of the assessee in January, 2016. During the survey, it was found that the assessee had deducted tax at source in respect of payments made to caterers and no tax was deducted at source on payments made to other affiliates. Accordingly, the AO issued show cause to the assessee as to why it should not treated as assessee in default u/s 201 (1) of the Act for non deduction of tax at source on such payments. The AO rejecting the contention of the assessee passed order u/s 201 (1) and 201 (1A) of the Act raising demand of Rs. 36,97,34,000/- towards tax and Rs. 20,09,04,420/- towards interest holding the assessee as assessee in default for non deduction of tax at source on the payments made to affiliates. The assessee challenged the said order before the Ld. CIT (A) inter alia on the ground that the order passed u/s 201 (1) and 201 (1A) is illegal being barred by limitation. It was contended that since the case pertained to assessment year 2012-13, AO had no jurisdiction to pass order u/s 201 (1) after expiry of two years form end of the financial year in which the statement was filed. However, the Ld. CIT (A) confirmed the order passed by the AO holding that the amendment made to sub-section 3 of section 201 by Finance Act, 2014 being clarificatory in nature, will apply retrospectively. Therefore, the extended limitation period of seven years will apply to assessee’s case. In the further appeal, the coordinate Bench, after hearing both the sides, reversed the findings of the Ld. CIT (A) held that the order passed u/s 201 (1) and 201 (1A) having been passed after expiry of two

17 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 years from the financial year wherein the TDS statements were filed by the assessee, is barred by limitation. 15. The coordinate Bench has decided the identical issue in favour of the assessee in the aforesaid case. The said decision was followed by the “G” Bench of the Mumbai Tribunal in assessee’s appeals Sodexo SVC India Pvt. Ltd. vs. DCIT, (2019) 72 ITR (Trib.) 132 for the AY 2010-11 and 2011-12. Further, as pointed out by the Ld. counsel for the assessee, the “L” Bench of the Mumbai Bench of the Tribunal has decided the similar issue in favour of the assessee in the case of Tech Mahindra Limited vs. ITO (Mumbai) (2018) 96 taxman.com 357 (Mumbai Tribunal). Since, the issue is covered in favour of the assessee by the decision of the coordinate Benches, we find merit in the cross objection filed by the assessee. Hence, we decide the grounds raised by the assessee in its favour and allow the cross objection. CO No. 238/MUM/2019 (Assessment Year: 2011-2012) The facts of the present case are similar to the facts of the case of the assessee pertaining to the AY 2010-11 aforesaid except the amount of advance made to the parties for future projects and the amount of payment made to the tenants as compensation for alternative accommodation. 2. The revenue has challenged the impugned order passed by the Ld. CIT (A) on the following effective grounds:- “1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) was justified in holding that the payment made to four parties of Rs. 1,55,00,000/- was in nature of advance or loan given as strategic investment and therefore would not come under the ambit of commission/Brokerage, without appreciating the fact brought on record by the AO that the payment made to these parties were for identifying projects for investment and therefore their role was of an agent. Further as they were not owners of any property meant for purchase and therefore such payments are nothing but brokerage/commission in order to acquire suitable property/deal for future project irrespective of the fact that 18 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 that part of the amount was refunded and interest was paid which could be an afterthought.” 2. Whether on facts and in the circumstances of the case and in law, the Ld. CIT (A) was justified in deleting the addition of Rs. 75,98,56,975/- by holding that the assessee company has not entered into any lease or in relationship of tenant and landlord, without appreciating the fact the amount of compensation paid is in nature of rent and is meant for housing needs of the parties who had vacated the land meant for redevelopment and therefore liable to be covered u/s 1941 of the Act.” 3. We have decided the identical issue in favour of the assessee in assessee’s own case for the AY 2010-11. Since there is no material change of facts in the present case, consistent with our findings, we decide both the issues against the revenue and dismiss the revenues appeal. 4. The assessee has filed the cross objection against the impugned order on the following effective grounds: 1. The Ld. CIT (A) has erred in law and in facts in not appreciating that order passed by Assessing Officer was invalid and void ab initio. 2. The Ld. CIT (A) erred in law and in facts in confirming the validity of the order passed by Assessing Officer without appreciating that the order passed by him was time barred and hence void ab initio.” 5. The issues raised by the assessee in the present objection are identical to the issues raised in its objection pertaining to the assessment year 2010-11 discussed above. Since, we have decided the identical issues in favour of the assessee and allowed the cross objection in assessee’s own case pertaining to the AY 2010-11, consistent with our findings, we decide the issues raised by the assessee in the present CO in favour of the assessee and allow the same. CO No. 239/MUM/2019 (Assessment Year: 2012-2013) The facts of the present case are similar to the facts of the case of the assessee pertaining to the AY 2010-11 and 2011-12 aforesaid except the 19 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 amount of advance made to the parties for future projects and the amount of compensation paid to the tenants. 2. The revenue has challenged the impugned order passed by the Ld. CIT (A) on the following effective grounds:- “1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) was justified in holding that the payment made to two parties of Rs. 2,00,00,000/- was in nature of advance or loan given as strategic investment and therefore would not come under the ambit of commission/Brokerage, without appreciating the fact brought on record by the AO that the payment made to these parties were for identifying projects for investment and therefore their role was of an agent. Further as they were not owners of any property meant for purchase and therefore such payments are nothing but brokerage/commission in order to acquire suitable property/deal for future project irrespective of the fact that that part of the amount was refunded and interest was paid which could be an afterthought.” 2. Whether on facts and in the circumstances of the case and in law, the Ld. CIT (A) was justified in deleting the addition of Rs. 90,17,56,914/- by holding that the assessee company has not entered into any lease or in relationship of tenant and landlord, without appreciating the fact the amount of compensation paid is in nature of rent and is meant for housing needs of the parties who had vacated the land meant for redevelopment and therefore liable to be covered u/s 1941 of the Act.” 3. We have decided the identical issues in favour of the assessee in assessee’s own case for the AY 2010-11 and 2011-12. Since there is no change of facts in the present case, consistent with our findings, we decide both the issues in against the revenue and dismiss the revenues appeal 4. The assessee has filed the cross objection against the impugned order on the following effective grounds: 1. “The Ld. CIT (A) has erred in law and in facts in not appreciating that order passed by Assessing Officer was invalid and void ab initio.

20 ITA Nos. 6814 - 6816/MUM/2018 & CO 237-239/MUM/2019 Assessment Years: 2010-11, 2011-12 & 2012-13 2. The Ld. CIT (A) erred in law and in facts in confirming the validity of the order passed by Assessing Officer without appreciating that the order passed by him was time barred and hence void ab initio.” 5. The issues raised by the assessee in the present Cross objection are identical to the issue raised in its objection pertaining to the assessment year 2010-11 and 2011-12 discussed above. Since, we have decided the identical issues in favour of the assessee and allowed the cross objection in assessee’s own cases pertaining to the AY 2010-11and 2011-12, consistent with our findings, we decide the issues raised by the assessee in the present CO in favour of the assessee and allow the cross objection. In the result, appeals filed by the revenue are dismissed and the Cross Objections filed by the assessee are allowed. Order pronounced on 20th April 2020 under Rule 34(4) of the Income Tax Appellate Tribunal Rules, 1963. (RAJESH KUMAR) ACCOUNTANT MEMBER म ुंबई Mumbai; दिन ुंक Dated: 20/04/2020 Alindra PS आदेश प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त(अपील) / The CIT(A)- 4. आयकर आय क्त / CIT 5. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file.

आदेशानुसार/ BY ORDER, सत्य दपि प्रदि //// उि/सहायक िंजीकार (Dy./Asstt.