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2019 (9) TMI 307 - AT - Income TaxPeriod of limitations for passing an order u/s 201(1) / 201 (1A) - Treating the assessee as “assessee in default” - TDS u/s 194 - failure to deduct TDS on an amount lent by it to its shareholders which are covered under the provisions of sec. 2(22)(e) - default u/s 201(1)/201(1A) - HELD THAT:- The show-cause notice in the instant case was duly issued within the period of six years at which time the default in deduction of TDS was both committed as well as continuing and therefore the assessee, in our view, cannot seek immunity from the applicability of sec. 201(1) for alleged default where the order has been passed within seven years as provided in amended law. While holding so, we agree to the contentions raised on behalf of Revenue that CIT(A) has wrongly observed that the cause of action had ceased and the applicability of sec. 201(1) had already become time barred at the time of amendment and thus extended time limit could not be conferred on AO. The assessee has no where contended or demonstrated on facts that TDS return was filed and thus the case was not time barred as wrongly assumed. The reliance placed on behalf of assessee on the decision of Tata Teleservices [2016 (2) TMI 414 - GUJARAT HIGH COURT] in totally misplaced as right of the Revenue to pass order has already become time barred at time of amendment by Finance (No. 2) Act 2014 in that case. Thus, with the lapse of time a substantive right had already accrued to the assessee which could not be taken away by a subsequent amendment. The limitation already barred could not be revived by later amendment. This is not the factual situation in the instant case as noted earlier. The other decisions relied upon by assessee are also clearly distinguishable as the issue in the instant case relates to law of limitation which is procedural one. The ratio of decision of Hon’ble Supreme Court in Brij Mohan vs. CIT [1979 (8) TMI 2 - SUPREME COURT] is also not applicable as no return has been filed by the assessee in the instant case and the default is not merely committed in this case but is also continuing. The issue is thus decided against the assessee and in favour of the Revenue. The order of the CIT(A) therefore requires to be set aside on this score. We however note in the same vain that the CIT(A) has not adjudicated the issue on merits. The matter is accordingly remanded back to the CIT(A) for adjudication for applicability of sec. 2(22)(e); sec. 194 and consequent application of sec. 201(1) and s. 201(1A) on merits in accordance with law after taking note of the relevant facts on record
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