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I.T.A No. 366/2017 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF AUGUST, 2022 PRESENT THE HON’BLE MR. JUSTICE P.S. DINESH KUMAR AND THE HON’BLE MRS. JUSTICE M.G. UMA I.T.A NO.366 OF 2017
BETWEEN:
THE COMMISSIONER OF
INCOME-TAX, TDS
NO.59, HMT BHAVAN
4TH FLOOR, BALLARI ROAD
GANGANAGAR
BENGALURU-560 032
THE DEPUTY COMMISSIONER
OF INCOME-TAX (TDS)
CIRCLE-18(2)
NO.59, HMT BHAVAN
4TH FLOOR, BALLARI ROAD
GANGANAGAR
BENGALURU-560 032 .…APPELLANTS
(BY SHRI. K.V. ARAVIND, ADVOCATE)
AND:
M/s UNITED SPIRITS LTD. (SUCCESSOR TO SHOW WALLACE & CO. LTD.) 6TH FLOOR, UB TOWERS UB CITY, 24, VITTAL MALLYA ROAD BENGALURU-560 001 PAN: AACCM 8043J
…RESPONDENT
(BY SHRI. SURYANARAYANA, SENIOR ADVOCATE FOR SHRI. T.S. SURESH, ADVOCATE AND SMT. TANMAYEE RAJKUMAR, ADVOCATE)
I.T.A No. 366/2017 2 THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED: 17/10/2016 PASSED IN ITA NO.1644/BANG/2013, FOR THE ASSESSMENT YEAR 2000-2001, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AND ETC.
THIS ITA, HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 25.07.2022, COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY, P.S.DINESH KUMAR J, PRONOUNCED THE FOLLOWING:-
JUDGMENT
This appeal by the Revenue is presented with following question of law: " Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside the order passed under section 201(1) and 201(1A) of the Act by holding that said orders are time barred by relying on the provision 153(2A) of the Act without appreciating that the provisions of section 153(2A) is applicable only in relation to passing of fresh assessments/re-assessments and not orders passed under section 201(1) and 201(1A) of the Act? "
Heard Shri. K.V. Aravind learned standing Counsel for the appellant/Revenue, Shri. T. Suryanarayana, learned Senior Advocate
I.T.A No. 366/2017 3 and Smt. Tanmayee Rajkumar, learned Advocate for the respondent.
Brief facts of the case are, assessee, a company in the business of breweries, did not deduct taxes at source. The Assessing Authority (TDS)1, observed that assessee had paid interest on advances but failed to deduct tax. Assessee claimed that the amount was “judgment debt” and therefore TDS was not liable to be made. The Assessing Authority (TDS) rejected the said claim and treated assessee as in default for non- deduction of tax under Section 194A of the Income Tax Act, 19612, for the financial year 1999-2000 and passed orders under Section 201(1) and 201(1A). The CIT(A)3 upheld Assessing Officer's
1 Deputy Commissioner of Income-Tax (TDS), Circle 18(2), Bangalore 2 ' IT Act' for short 3 Commissioner of Income-Tax (Appeals)-II, Bangalore
I.T.A No. 366/2017 4 order. On further appeal, the ITAT4, Kolkata, vide order dated November 16, 2006 remanded the matter to the Assessing Officer to pass fresh orders. The Assessing Officer has passed his order on March 30, 2011 and the same was challenged in appeal. The CIT(A) upheld the order passed by the Assessing Officer and dismissed the appeal vide order dated September 18, 2013. On further appeal, the ITAT, Bengaluru, vide impugned order has allowed the appeal.
Shri. K.V. Aravind, for the Revenue, submitted that the ITAT has erred in holding that the order passed by the Assessing Officer is beyond the period of limitation by relying on Commissioner of Income-Tax Vs. Jodhana Real Estate Development Corporation Pvt. Ltd5. He submitted that the period of one year prescribed under
4 The Income-Tax Appellate Tribunal, Bangalore Bench 'B' Bengaluru 5 (2005)273 ITR 195
I.T.A No. 366/2017 5 Section 153(2A) of the IT Act, 1961 is not applicable in respect of orders under Sections 201 and 201(1A) of the Act because, as on the date of the Assessing Officer's order namely 30.03.2011, as per Section 201(3), the Assessing Officer could pass the orders for the Financial Year commencing on or before 01.04.2007, provided such order was passed on or before 31.03.2011.
Opposing the appeal, Shri. Suryanarayana submitted that Assessing Officer has recorded in his order that ITAT, Kolkata had remanded the matter on 16.11.2006, but he did not choose to pass any order till 30.03.2011. It is settled that where no time is specified, the Statutory/Quasi judicial Authority is required to exercise its jurisdiction and pass orders within a reasonable period of time. In support of this contention, he relied upon State of
I.T.A No. 366/2017 6 Punjab and others Vs. Bhatinda District Co- operative Milk Producers Union Ltd6.
He next contended that this Court, in the case of Commissioner of Income-Tax, TDS Vs. Bharat Hotels Ltd.7, in similar circumstances has allowed the appeal and answered the question of law in favour of the assessee and against the Revenue. With these submissions, he prayed for dismissing this appeal.
We have carefully considered rival contentions and perused the records.
The ITAT placing reliance on Jodhana Real Estate and holding that Section 153(2)A of the Act was applicable to the case on hand has quashed the orders passed by the Assessing Authority under Section 201 and 201(1A) of the Act as time barred.
6 (2007)11 SCC 363 (paras 17 to 19) 7(2015) 64 Taxmann.com 325 (Kar) (paras 14 & 15)
I.T.A No. 366/2017 7
In Jodhana Real Estate, the orders under consideration were passed under Section 143(3) and Section 104 of the Act. In contradistinction, in the case on hand, orders have been passed by the Assessing Officer on 30.03.2011 under Section 201 and 201(A) of the Act. Section 201(3) of the Act, as it stood on the date of passing of the order, read as follows: " 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 proviso is unambiguous. For the financial year commencing before 01.04.2007, orders could be passed any time on or before 31.03.2011. Admittedly, the assessment year
I.T.A No. 366/2017 8 under consideration is for 1999-2000 and the same is prior to financial year before 01.04.2007. In view of the unambiguous language employed by the Legislature, no exception can be taken to the order passed by the Assessing Officer.
The authorities relied upon by the learned Senior Advocate for the assessee in support of his contention that the Assessing Officer ought to have passed the orders within a reasonable time do not lend any support to the assessee because, statute permitted the Assessing Officer to pass orders before 31.03.2011.
In view of the above, this appeal must succeed. Hence, the following:
I.T.A No. 366/2017 9 ORDER
(a) Appeal is allowed.
(b) The question of law raised by the Revenue in answered in favour of the Revenue and against the assessee.
(c) The common order dated 17.10.2016 passed by the ITAT is set-aside so far as it relates to A.Y. 1999-2000 and order dated 30.03.2011 passed by the Assessing Officer is restored.
Sd/- JUDGE
Sd/- JUDGE SPS