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ITO (TDS) -2 (4) , Mumbai Versus National Health & Education Society and Vica- Versus

2015 (8) TMI 1040 - ITAT MUMBAI

TDS liability - time limit for making assessment u/s 201(1) - assessee “deemed to be in default” - Held that:- We have also perused the facts of the present case as well as the orders of ITAT in case of the appellant for AY. S.2006-07 to 2010-11 and we are satisfied that issues covered in those appeals are identical to the facts and issues of the present appeals wherein find that the FAA has not given any direct finding. He had given direction to the AO to find out the details of filing of quart .....

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of section 201(ii) of the Act and the impugned order passed would be treated valid. In our opinion, the order of the FAA does not suffer from any legal infirmity. Provisions of section 201(3) were amended and word six years were substituted by words four years with retrospective effect from 1April 2010. Survey action carried out in October 2010 and the amendment had come on statute before six months. So, the FAA, in our opinion has rightly interpreted the section and the time limit.

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g the order dt.24th March 2011 for AY 2004-05 and AY 2005-06 of the CIT(A)-14, the Assessing Officer (AO) has raised various grounds of appeal with regard to the orders passed by the AO u/s. 201(1) and 201(1A) of the Act. The assessee has filed cross objection for the year under consideration ITA 4878/M/2013 for A Y 2004-05 u/s 201 (1) By Revenue a) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in quashing the order passed by the AO u/s. 201(1)/201(1A) by relying on .....

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.2010. Since the order is passed on 24.03.2011, the order passed by the AO is held by the CIT (A) to be beyond limitation period without appreciating the fact that as per the proviso to section 201(3), the order u/s. 201(1)/201 (1A) for a financial year commencing on or before the 151 day of April 2007 may be passed at any time on or before the 31st day of March 2011. The CBDT Circular NO.5 referred by the Ld. CIT (A) is only clarificatory and cannot over ride this statute. b) On the facts and i .....

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since section 201 (3) of the I. T. Act clearly provides that such order for a financial year commencing on or before the 15th day of April, 2007, may be passed at any time on or before the 3151 day of March. 2011 and hence, order passed u/s. 201 (1) dated 24.03.2011 is valid one c) On the facts and circumstances of the case and in law, the Ld. CIT(A) had erred in annulling the order passed by the A. O. u/s. 201 (1 )/201 (1A) by observing that the impugned order is statutorily beyond the period .....

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he fact that as per circular NO.5 of 2010 issued by CBDT wherein it was clarified that the A. O. can complete TDS proceedings for a financial beginning from 01.04.2007 and earlier year's by 31.03.2011. In other words by virtue of assessees filling incomplete TDS statements the survey and the proceedings u/s. 201(1 )/201(1A) are validly pending before the Income-tax Authorities. e) On the facts and circumstances of the case and in law , the Ld CIT (A) has erred in annulling the order passed b .....

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201(1A) by revenue 1. "The Ld. CIT (A) erred in quashing the order u/s 201(1A) whereby interest was charged on the short deduction determined u/s 201(1), by observing that the order u/s 201(1) had been annulled and also erred in not appreciating the facts that the order of the Ld. CIT (A) (annulling the short deduction u/s 201(1) had not been accepted by the department and appeal to ITAT had been filed". 2. The appellant craves leave to amend or alter any ground or add a new ground wh .....

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hat on the facts and in the circumstances of the case of the respondent and in law the respondent should not be deemed to be an assessee in default as held by ITO (TDS) in respect of the payments made to hospital based consultants. 3. The Learned CIT (A) has erred in not holding that on the facts and in the circumstances of the case of the respondent and in law the Respondent should not be deemed to be an assessee in default as held by ITO (TDS) in respect of the payments made to Hinduja Foundat .....

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barred by limitation. 2. The Learned CIT (A) has erred in not holding that on the facts and in the circumstances of the case of the respondent and in law the Respondent is not liable to any interest u/s 201(1A) of the act. ITA 4879/Mum/2013for AY 2005-06 by Revenue u/s 201(1) a) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in quashing the order passed by the AO u/s. 201(1)/201(1A) by relying on the CBDT Circular No. 5 of 2010 dated 3rd June, 2010 stating that the .....

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u/s. 201(1)/201 (1A) for a financial year commencing on or before the 151 day of April 2007 may be passed at any time on or before the 31st day of March 2011. The CBDT Circular NO.5 referred by the Ld. CIT (A) is only clarificatory and cannot over ride this statute. b) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) had erred in holding that the order passed by the A. O. u/s. 201(1) dated 24.03.2011 is beyond limitation period as per provision of section 201 (3) of t .....

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and hence, order passed u/s. 201 (1) dated 24.03.2011 is valid one c) On the facts and circumstances of the case and in law, the Ld. CIT(A) had erred in annulling the order passed by the A. O. u/s. 201 (1 )/201 (1A) by observing that the impugned order is statutorily beyond the period of limitation without appreciating the fact that the proceedings under the said section pursuant to survey stand valid for the reason that the assessee had filed incomplete TDS statements u/s. 200 as mandated unde .....

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er words by virtue of assessees filling incomplete TDS statements the survey and the proceedings u/s. 201(1 )/201(1A) are validly pending before the Income-tax Authorities. e) On the facts and circumstances of the case and in law , the Ld. CIT (A) has erred in not considering the true facts unearthed during survey proceedings u/s 133A dated 4. 10.2010 Withrespect to not to treat the hospital based consultants Dr Phulrenu H Chauhan as employee of the hospital and remuneration paid to him is not i .....

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muneration paid to the said person is salary subjected to TDS u/s 192 as against 194J of the acat. f) On the facts and in the circumstances of the case and in law , the LD CIT (A has erred in deleting the total tax demand of ₹ 2,71,928/- raised on account of payments made to Hinduja Foundation and non-deduction of tax on payment made on account of drug handling charges without appreciating the fact of the case came to light during survey proceedings on 4.10.2010 since taking in to account .....

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of the case came to light during survey proceedings on 4.10.2010 by taking in to account the same, an order u/s 201(1) was passed and TDS default was worked out and determine din terms of order dated 24.3.2011 ITA No 4972/M/2013 for AY 2004-05 U/s 201(1A) by revenue 1. "The Ld. CIT (A) erred in quashing the order u/s 201(1A) whereby interest was charged on the short deduction determined u/s 201(1), by observing that the order u/s 201(1) had been annulled and also erred in not appreciating .....

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1. The Learned CIT (A) has rightly held that the order u/s 201/201(1A) made by ITO (TDS ) in the case of respondent on 24th march 2011 in relation to assessment year 2005-06 is barred by limitation. 2. The Learned CIT (A) has erred in not holding that on the facts and in the circumstances of the case of the respondent and in law the respondent should not be deemed to be an assessee in default as held by ITO (TDS) in respect of the payments made to hospital based consultants. 3. The Learned CIT ( .....

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Drug handling Charges. CO No 192/M/2014 in Appeal No 4972/M/2013 A Y 2005-06 by Assessee 1. The Learned CIT (A) has rightly held that the order u/s 201(1A) made by ITO in the case of the respondent on 228th march 2011 in relation to A Y 2005-06 is barred by limitation. 2. The Learned CIT (A) has erred in not holding that on the facts and in the circumstances of the case of the respondent and in law the Respondent is not liable to any interest u/s 201(1A) of the act. 2. The assessee, a renowned .....

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Samant, director(Finance)was also recorded. As a result, proceedings under section 201 (1) of the Act were initiated and the assessee was required to show cause as to why it should not be treated to be an Assessee-in-default(A-I-D)in respect of certain payments. The assessee furnished its reply and various details as required by the AO. After considering the same, the AO passed the orders u/s.201(1) in respect of these assessment years, holding it to be an A-I D on certain counts and had accordi .....

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thority (FAA). Before him, it was submitted that the time limit for making assessment u/s 201(1) for the AY 2004-05 and onwards had expired. The assessee filed a chart in this regard and itread as under: Sr. No Assessment Year Alleged Short Deduction Rs. Year of Alleged Default Action U/s 201 4.10.10 U/s 201 * Law as on date of default will apply: Benett Coleman & Co. Ltd. v. V. P. Damle(1986) 157 ITR 812(Bom) 2004-05 04,92,61,089/- 31.03.04 *6years Time Limit for completion of Assessment ov .....

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nd 201(4) had been insertedin the statute by Finance Act 2009 w. E. F. 01.04.2010. He referred to the provisions of section 201(1) and section 153(3) (ii) and explanation 1. He held that time period of six years in clause-2 of the above section 201(3) had been substituted for four years with retrospective effect from 01.04.2010 by Finance Act, 2012, that section 201(3) and 201(4) had become part of the statute w. E. F. April 2010, that the survey action u/s. 133A was carried out on 04.10.2010, t .....

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Act, that if the assessee had filed TDS yearly return/ statement of the 4th quarter same would have been filed in May or June 2004 and April or May 2005 in the FY 2003-04 and 2004-05 respectively, that the limitation for passing of order u/s. 201(1) would be two years from the end of the said FY i. E. 31.03.2006 and 31.03. 2007 respectively, that impugned order had been passed on 24.03.2011, that same was beyond limitation period. He further mentioned that the assessee had not furnished any deta .....

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e (ii) of section 201(3) of the Act and the time period of 6 years from the end of the FY. Would be available with the AO and the orders passed by him would be valid orders. As stated earlier, he directed the AO to verify the facts and follow his instructions. 4. Before us, the Departmental Authority (DR) relied upon the order of the AO. Authorised Representative (AR) stated that order passed by the AO was beyond the prescribe time limit, that all the grounds of appeal in all the four appeals of .....

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the orders u/s.201(1)has already been decided in case of the assessee in Appeal No 4935/M/ 2013 and 4937/M/0213 for AY 2006-07 in para no 5 as under :- We find that the FAA has not given any direct finding. He had given direction to the AO to find out the details of filing of quarterly statements for the year considerationand to verify for his records as to whether the assessee had filed the necessary quarterly statements (or yearly TDS return) . He further held that if the quarterly statement .....

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years were substituted by words four years with retrospective effect from 1April 2010. Survey action carried out in October 2010 and the amendment had come on statute before six months. So, the FAA, in our opinion has rightly interpreted the section and the time limit. Here, it would be useful to refer to CBDT Circular dated 03.06. 2010 and same reads as under: "It has been provided that an Order U/s 201(1) for failure to deduct the whole or any part of the tax as required under this Act, i .....

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s can be completed by the 31.03.2011" As the circular has clarified the position about the time limit, soin our opinion now there is no scope for any ambiguity. Time limit depends upon the filing of quarterly/yearly statement. The FAA has emphasized the same point and has directed the AO to make verification, as stated earlier. In these circumstances, we are of the opinion that the order of the FAA does not suffer from any legal infirmity. ConfirmingConfirming his order, we decide effective .....

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refore ground no (e) to(g) of appeal no 4879/ M/ 2013 for AY 2005-06 by revenue do not survive and hence dismissed. ITA/4971/Mum/2013. AY 2004-05 and ITA/4972/M/2013-AY.2005-06 : 6. These appeals are preferred against order of FAA where the orders passed u/s 201 (1A) of the Act , where order u/s 201(1) has been annulled. Therefore, the orders charging interest u/s 201(1A)charging interest on shortfall in deduction of tax at sources also do not survive. Following our order passed u/s.201(1)of the .....

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