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Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: SH. N. K. BILLAIYA & SH. ANUBHAV SHARMA
PER N. K. BILLAIYA, AM: This appeal by the assessee is preferred against the order of the CIT(A)-38, Delhi dated 31.01.2020 pertaining to A.Y.2011-12.
The grievance of the assessee read as under :- 1. The impugned order under appeal is invalid and without jurisdiction as the same is passed beyond the period of limitation available to the department u/s 201(3)(i) of the Act then in force till 01.10.2014 therefore such order is void ab initio and liable to be quashed.
Without prejudice to above, the impugned order under appeal has erred both on facts and in law in setting aside the issue for verification of the tax paid and income declared by the deductee placing onus upon the appellant to get the information verified, ignoring the proposition of law that onus to verify the above fact squarely lay on the department and the assessee cannot be burdened in the matter. 3. The appellant craves leave to add, delete, modify/ modify / amend the above grounds of appeal with the permission of the Hon’ble appellate authority.
Briefly stated the facts of the case are that vide order dated 30.03.2018 framed u/s. 201(1)/201(1A) of the Act the Assessing Officer directed the assessee to pay the TDS on account of Rs.2,93,572/- u/s. 201 (1) of the Act and interest thereon u/s. 201 (1A) of the Act. The bone of contention was the TDS liability on CAM charges paid by the assessee on which the assessee has deducted at source @ 2% u/s. 194C of the Act whereas according to the AO CAM charges being part and parcel of the rent paid, therefore, the TDS ought to have been deducted @ 10% as per the provision of section 194I of the Act.
The assessment was challenged before the CIT(A) but without any success.
Before us the Counsel for the assessee vehemently stated that the order dated 30.03.2018 is barred by limitation as the impugned financial year is 2010-11 and period of limitation expires after two years from the end of the financial year which means that the order ought to have been framed on or before
31.03.2014 and as the order has been framed on 30.03.2018 it is barred by limitation.
Per contra the DR strongly supported the order of the AO.
We have carefully perused the orders of the authorities below. There is no dispute that the order was framed on 30.03.2018 and the impugned financial year 2010-11. It is true that amendments has been brought in the statue w.e.f. 01.10.2014 but in our considered opinion the said amendment is prospective as was held by the coordinate Bench in the case of Connaught Plaza Restaurants P. Ltd. in ITA No.993 and 1984/Del/2020 order dated 31.12.2021 is relevant findings of the coordinate Bench read as under :-
“9. After deliberating at length on the issue in question, we find substance in the claim of the Id. AR that the aforementioned order passed by the AO u/s. 201(1)/201(1A) of the Act, dated 29.03.2018 is barred by limitation. Admittedly, as per sub-section (3) to Section 201 of the Act, the time limit for passing an order under sub-section (1) to Section 201 i.e 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, in a case where the statement referred to in Section 200 was filed by the assessee prior to 01.10.2014, was 2 years from the end of the financial year in which such statement was filed. Accordingly, as stated by the ld. AR, and rightly so, the time limit for passing of an order under sub-
section (1) to Section 201 in the case of the assessee before us could have been done latest by 31.03.2014. Rebutting the aforesaid claim of the assessee, it is the case of the Revenue that as the amendment to sub-section (3) to Section 201 of the Act, that had been made available on the statute vide the Finance Act, 2014, w.e.f. therein enlarging the time limit for passing of an order under sub-section (1) to Section 201 to 7 years from the end of the financial year in which payment is made or credit is given, is clarificatory in nature, therefore, it would be applicable retrospectively and as a consequence thereto the order passed by the Assessing Officer in the case of the assessee u/ss. 201(1)/201(1A) of the Act, dated 29.03.2018 would be saved by limitation. We are unable to persuade ourselves to subscribe to the aforesaid claim of the revenue. As observed by us hereinabove, in the case of the assessee before us the order under sub-section (1) to Section 201 i.e deeming the assessee as an assessee-in-default for failure to deduct the whole or any part of the tax from a person resident in India could have been passed latest by 31.03.2014. On i.e., the date on which sub-section (3) to Section 201 of the Act was amended vide the Finance Act, 2014, the limitation to pass an order under sub-section (1) to Section 201 in the case of the assessee had already lapsed. As stated by the Id. AR, and rightly so, as per the settled position of law, an amendment enlarging the limitation cannot revive the limitation which had already expired prior to the date of such amendment, and as and where the legislature had intended to amend the enacted law with retrospective effect, it had expressly provided for a retrospective operation of the same. In
sum and substance, the proceedings which due to bar of limitation had attained finality under the existing law cannot be revived by referring to the enlarged period of limitation made available on the statute vide a subsequent amendment, unless the amended provision is clearly given a retrospective applicability. Our/aforesaid observation is supported by the judgment of the Hon’ble Supreme Court in the case of K.M. Sharma vs. ITO, 254 ITR 772 (SC). In its aforesaid order, the Hon’ble Apex Court while dealing with the scope and gamut of the amendment to sub-section (1) of Section 149 of the Act, had observed, that if it was to be held that the amendment to sub- section (1) of Section 149 would enable the authorities to reopen the assessments which had already attained finality due to bar of limitation prescribed u/s.149 as was applicable prior to 01.04.1989, then, it would amount to giving subsection (1) a retrospective operation which was neither expressly nor impliedly intended by the amendment so made available on the statute. In fact, we find that the issue before us is squarely covered by the judgment of the Hon’ble High Court of Gujarat in the case of Tata Teleservices vs. UOI, 385 ITR 497 (Guj). As in the case before us, the assessee before the Hon’ble High Court had received notices dated 09.10.2014 u/ss. 201(1)/201(1A) for Financial Years 2007-08 and 2008- 09. It was the claim of the assessee that as it was regularly filing its statements u/s 200 of the Act, therefore, the period of limitation for passing an order under sub-section (1) to Section 201 i.e a period of 2 years from the end of the financial year in which the statement was filed, as prescribed in sub-section (3) to Section 201, had already lapsed, therefore no order treating
it as an assessee-in default could validly be passed. However, the AO rejected the aforesaid claim of the assessee, and observed, that as the amendment to sub-section (3) of Section 201 of the Act that was made available on the statute vide the Finance Act, 2014, w.e.f. 01.10.2014 had extended the time limit for passing of the order under sub-section (1) to Section 201 to 7 years, therefore, the order to be passed in the case of the assessee was well within limitation. On a writ petition filed by the assessee, the Hon’ble High Court held that as the amended provisions were to apply prospectively, therefore no order u/s. 201(1) of the Act could have been passed, as the limitation for passing of such an order had already expired prior to the amendment that was made available on the statute vide the Finance Act, 2014 w.e.f. 01.10.2014. For the sake of clarity the relevant observations of the Hon4)le High Court are culled out as under:
“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.
In view of the above and for the reasons stated above, all these petitions succeed. The impugned notices /summonses are held to be invalid and the same are hereby quashed and set aside and the respondents herein are hereby restrained by writ of prohibition from proceedings with the impugned notices / summonses which are, as such, hereby quashed and set aside. Rule is mad absolute accordingly in each of the petitions. In the facts and circumstances the case, there shall be no order as to costs. ” (emphasis supplied)” 10. In the backdrop of our aforesaid observations read a/w the settled position of law, we are of the considered view, that as the time limitation for passing an order under sub-section (1) to Section 201 i.e deeming the present assessee before us, as an assessee-in-default under sub-section (1) to Section 201 of the Act could have validly been done within a period of 2 years from the end of the financial year in which the statement u/s. 200 was filed by the assessee, i.e., latest by 31.03.2014, as per the law as was then available on the statute, therefore, the
order passed by the AO u/ss. 201(1) /201(1A) of the Act, dated 29.03.2018 is clearly barred by limitation. We, thus, in terms of our aforesaid observations quash the order passed by the AO u/s.201(l)/201(lA), dated 29.03.2018 as barred by limitation. The Grounds of appeal Nos. 1 to 3 are allowed in terms of our aforesaid observations.”
Respectfully following the decision of the coordinate Bench (supra) we hold that the order dated 30.03.2018 is barred by limitation and is liable to be quashed.
Since we have quashed the order we do not find it necessary to dwell into the merits of the case appeal of the assessee is allowed.
Order pronounced in the open court on 31.05.2023.
Sd/- Sd/- [ANUBHAV SHARMA] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: .05.2023 *Neha* Copy forwarded to: 1. Appellant 2. Respondent 3. CITi 4. CIT(A) 5. DR
Asst. Registrar ITAT, New Delhi