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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI MAHAVIR SINGH & SHRI M. BALAGANESH
आदेश / O R D E R
PER M. BALAGANESH, ACCOUNTANT MEMBER:
This appeal of the assessee arise out of the order of the Ld. Commissioner of Income Tax (Appeals)-16, Chennai vide proceedings in dated 09.08.2018 against the order passed by the DCIT, International Taxation-2(2), Chennai (AO) u/s. 201(1) & 201(1A) of the Income Tax Act, 1961
(A.Y 2010-11) M/s. Tenth Planet Technologies Pvt. Ltd. :- 2 -: (hereafter ‘the Act’) dated 31.03.2017 for the Assessment Year (A.Y)
2010-11.
We have heard the rival submissions and perused the material available on record. The Ld. AO framed the assessment u/s. 201(1) and 201(1A) of the Act on 31-3-2017 treating the assessee as ‘assessee in default’ for non deduction of tax at source in respect of payments made towards purchase of software in the sum of Rs. 24,95,136/- by treating the same as royalty. This order was upheld by the Ld. CIT(A).
We find that before us the Ld. AO raised a preliminary objection that the assessment framed by the Ld. AO u/s. 201(1) and 201(1A) of the Act for the A.Y 2010-11 on 31-3-2017 was barred by limitation.
To support his argument, the Ld. AR drew our attention to the pre- amended provisions of s. 201(3)(ii) of the Act, which stipulates that the order under sub s. (1) to s. 201(1) could be passed only within 6 years from the end of the financial year in which the payment was made. There is no dispute in the instant case that payment for purchase of software was made by the assessee during the financial year 2009-10 relevant to A.Y 2010-11. Hence, six years from the end of the financial year would expire on 31-03-2016, which would be the last date for framing the assessment u/s. 201(1) of the Act in terms of (A.Y 2010-11) M/s. Tenth Planet Technologies Pvt. Ltd. :- 3 -: pre-amended provisions of s. 201(3)(ii) of the Act. This section was later amended w.e.f 01-10-2014 substituting six years with seven years. We find that the the Ld. CIT(A) simply applied the amended provisions for the A.Y 2010-11 ignoring the fact that the said amendment is applicable only w.e.f 01-10 2014. Accordingly, we hold that the order passed by the Ld. AO u/s. 201(1) and 201(1A) of the Act on 31-03-2017 is barred by limitation and hence, the same is hereby quashed.
Since, the appeal of the assessee is decided on a technical issue, we refrain to give our opinion on the merits of the case.
Accordingly, the grounds raised by the assessee are allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced on 28th day of February, 2020 in Chennai.