2021 (12) TMI 453 - AT - Income Tax

Order passed under section 201(1)/201(1A) - Period of limitation - applicability of the amendment - HELD THAT - The assessee has made the payments on 18.05.2009 01.09.2009 and filed the statements in FY 2009-10 itself and accordingly the order under section 201 (1)/201 (1A) of the Act could not be passed beyond 31.3.2012 but however the order was passed on 29.12.2016 which is beyond the limitation date. Regarding the applicability of the amendment by Finance Act 2014 wherein the distinction between cases where statement has been filed and such statements was not filed was removed and the amendment prescribed a common period of limitation i.e. seven years from the end of financial year in which payment was made it is submitted that the said amendment is not from retrospective date nor does it specifically say that it is from retrospective effect as it was said at the time of amendment by Finance Act 2014. Therefore the said amendment as on 01/10/2014 is with prospective effect. With this view of the matter we are of the considered opinion that the impugned order passed under section 201(1)/201(1A) of the Act is barred by limitation. Since the assessee succeeds on technical ground any discussion on merits would only be academic and therefore we avoid the same. Appeal of assessee allowed.

Summary

Issues involved:
1. Interpretation of provisions related to limitation period for passing orders under section 201(1) & 201(1A) of the Income Tax Act.
2. Application of retrospective amendments made by Finance Acts to determine the limitation period.
3. Assessment of whether the order passed under section 201(1) & 201(1A) of the Act was within the prescribed limitation period.

Issue 1: Interpretation of provisions related to limitation period:
The case involved a private limited company engaged in power generation, supplying electricity to the Himachal Pradesh State Electricity Board. The assessee reimbursed operation and maintenance charges to the Board without deducting TDS, as it was considered a reimbursement of actual expenses. However, the Assessing Officer passed an order under section 201(1) & 201(1A) of the Act, demanding payment including interest on TDS not deducted. The dispute centered on whether this order was within the limitation period.

Issue 2: Application of retrospective amendments:
The appellant argued that successive Finance Acts, particularly the amendments made in 2009, 2012, and 2014, affected the limitation period for passing the order under section 201(1) & 201(1A) of the Act. Citing the decision of the Hon'ble Gujarat High Court and rulings by Tribunal benches, the appellant contended that the order was time-barred due to the retrospective nature of the amendments.

Issue 3: Assessment of order within the limitation period:
The Tribunal analyzed the relevant provisions introduced by Finance Acts in 2009, 2012, and 2014. It noted that the appellant had filed TDS statements for the relevant period, affecting the limitation period. Considering the retrospective and prospective nature of the amendments, the Tribunal concluded that the order passed on 29/12/2016 was beyond the limitation date. Consequently, the Tribunal directed the Assessing Officer to delete the demand raised under section 201(1) & 201(1A) of the Act, as the order was barred by limitation.

In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing that the order passed under section 201(1) & 201(1A) of the Act was beyond the limitation period prescribed by the relevant amendments. The decision highlighted the importance of understanding the retrospective and prospective effects of legislative changes in determining the validity of orders under the Income Tax Act.