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2021 (2) TMI 321 - AT - Income TaxValidity of Orders passed u/s 201(1) and 201(1A) - period of limitation - retrospective applicability of the provisions - TDS u/s 192 - non deduction of TDS on Cash medical benefit to employees - treating the assessee as, “assessee in default" - time limit for issue of notice u/s 201 - HELD THAT:- Applying principles laid down by Hon'ble Supreme Court in number of cases and TATA TELESERVICES VERSUS UNION OF INDIA & 1 [2016 (2) TMI 414 - GUJARAT HIGH COURT] and SODEXO SVC INDIA PVT. LTD. [2018 (4) TMI 316 - ITAT MUMBAI]Orders passed by Ld.AO under section 201(1) and 201(1A) for financial year 2010-11 (assessment year 2011-12) and 1st three quarters for financial year 2011-12 (assessment year 2012- 13), expired on 31/03/2014 under unamended section 201 (3)(i) of the Act. Such orders having been passed after expiry of two years from the financial year wherein TDS statements were filed by the assessee under section 200 of the Act, is therefore barred by limitation, hence, has to be declared as null and void. TDS on medical benefits - non deduction of TDS on bonafide belief - Under section 192(1), the assessee is expected to make an honest and fair estimate of income and deduct tax at source. For assessment year 2015-16 and 2016-17, clause (2D) was applicable, however in the absence of specific requirement under Rule 26C, assessee was not obliged to collect evidence/ proof from the employees for reimbursement of medical expenditure. The assessee has sought permission from CBDT vide letter dated 20/05/2002, regarding extending the exemption under Proviso(v) to Section 17(2) of the Act, based on satisfaction of the assessee. Assessee has been following this practice since the year 1991. Further the exemption at no time exceeded ₹ 15,000/- Stand of the assessee that the Cash medical benefit were only reimbursement of the expenditure incurred by the employees, and as such they could not form part of their income, could not be said to be without any basis. Therefore, the belief of the assessee on that point was bona fide. Since the estimate made by the assessee has been held to be honest and bona fide, the assessee could not be treated as “assessee in default” Therefore, the Ld.AO had no jurisdiction under section 201 to demand further tax from the assessee in respect of the short deduction made concerning Cash Medical Benefit for assessment year 2015-16 & 2016-17. As regards charging of interest under section 201(1A), since relief, as mentioned above, had been allowed, the Ld.AO is directed to modify the quantum of interest taking into consideration the said relief for assessment year 2015-16 & 2016-17.
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