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TMI Blog2018 (4) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 201/ 201(1A) of the Act to be bad in law though the same was passed beyond the time limit allowed u/s 201(3). 3. The Learned CIT(A) erred in confirming the demand raised by the DCIT (TDS) without adjudicating upon the Appellant's contention that once the payees (Affiliates) have included the receipt in their return of income and paid taxes thereon, no tax can be recovered from the Appellant. 4. The Learned CIT(A) erred in observing that the DCIT (TDS) should have calculated the amount of alleged TDS default at the rate prescribed under Section 206AA of the Act." 3. In ground no.2, the assessee has challenged the order passed under section 201(1) and 201(1A) to be barred by limitation. Since, the aforesaid issue raised by the assessee is a purely legal and jurisdictional issue going to the root of the matter, we proceed to deal with it at the very outset. 4. Brief facts are, the assessee an Indian company is engaged in the business of issuing meal, gift vouchers, smart cards, to its clients who wish to make benefit in kind for their employees. The employees use these vouchers / smart cards at affiliates of the assessee company acr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the first appellate authority, inter-alia, on the ground that the order passed under section 201(1) and 201(1A) is barred by limitation as per sub-section (3) of section 201 as was applicable for the relevant period. In the course of hearing of appeal before the first appellate authority, it was submitted by the assessee that as per the provisions contained in sub-section (3) of section 201 which existed prior to its amendment by Finance Act, 2014, w.e.f. 1st October 2014, in a case where the assessee has filed a statement in terms of section 200, no order under section 201(1) can be passed after expiry of two years from the end of financial year in which the statement is filed. Thus, it was contended, by the time the show cause notice under section 201 was issued to the assessee, already two years have expired from the end of relevant financial year wherein the statements were filed the proceedings are time barred. The learned Commissioner (Appeals), though, agreed that as per pre-amended provisions of sub- section (3) to section 201, the period of limitation prescribed for passing an order under section 201 is two years from the end of the relevant financial year wherein stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was effected by Finance Act, 2014, the limitation period as per the pre-amended provisions has already expired in case of the assessee. Therefore, the Assessing Officer could not have assumed jurisdiction for issuing a notice under section 201(1) and 201(1A). The learned Sr. Counsel submitted, the impugned order of the Assessing Officer passed under section 201(1) and 201(1A) being barred by limitation has to be declared as null and void. In support of his contentions, the learned Sr. Counsel relied upon the following decisions:- i) Tata Teleservice v/s Union of India and Anr., [2016] 385 ITR 497 (Guj.); ii) Troikaa Pharmaceuticals Ltd. v/s Union of India, [2016] SCC Online (Guj.) 4788; iii) CIT v/s Vatika Township Pvt. Ltd., [2014] 367 ITR 466 (SC); iv) Reliance Jute and Industries Ltd. v/s CIT, [1980] 1 SCC 139; v) CIT v/s Shah Sadiq & Sons, [1987] 3 SCC 516 (SC). 6. Learned Departmental Representative strongly relied upon the observations of the first appellate authority. 7. We have heard rival submissions and perused materials available on record in the light of the decisions cited. So far as the factual aspect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id provision, the only change which was effected from the earlier provision was the limitation period of four years in case of a deductor not filing TDS statement was extended to six years from four years. Whereas, in case of a person / deductor filing TDS statement, the limitation period of two years remained unchanged. The aforesaid sub-section (3) of section 201 was again amended by Finance Act, 2014, w.e.f. 1st October 2014 by substituting the earlier provision with the following:- "(3) No order shall be made under sub-section (1) 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, at any time after the expiry of seven years from the end of the financial year in which payment is made or credit is given." 9. Thus, as could be seen from the aforesaid amended provision a uniform limitation period of seven years from the end of relevant financial year wherein payments made or credit given was made applicable. The issue before us is, whether the un-amended sub-section (3) which existed before introduction of amended sub-section (3) by Finance Act, 2014, will apply to assessee's case or not. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t law should govern current activities. Law passed today cannot apply to the events of the past. The Hon'ble Court observed, legislations which modified accrued rights or which impose obligations or imposes new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect. It was observed, if a provision is not for the benefit of a community, but, imposes some burden or liability the presumption would be it will apply prospectively. The rule against retrospective operation is a fundamental rule of law that no statute shall be construed to have retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication. Similar view has been expressed in the case of Reliance Jute and Industries Ltd. (supra) as well as Shah Sadiq & Sons (surpa). In case of Tata Teleservices (supra), which is directly on the issue of retrospective application of the amended sub-section (3) of section 201, the Hon'ble Gujarat High Court, after extensively dealing on the issue of retrospective applicability of the provisions and applying the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 whereas the amendment in section 201 of the Act as amended by Finance Act No. 2 of 2014 came into force with effect from 28th May, 2012. The impugned notice, therefore, is clearly barred by limitation and, therefore, cannot be sustained. For the detailed reasons recorded in the judgment and order dated 5th February, 2016 rendered in the case of Tata Teleservices v. Union of India (supra), this petition also deserves to be allowed." 11. No contrary decision has been brought to our notice by the learned Departmental Representative. Therefore, considering the principle laid down by the Hon'ble Supreme Court in the decisions as well as the ratio laid down by the Hon'ble Gujarat High Court in the decisions referred to above which are directly on the issue, we hold that the order passed under section 201(1) and 201(1A) having been passed after expiry of two years from the financial year wherein the TDS statements were filed by the assessee under section 200 of the Act, is barred by limitation, hence, has to be declared as null and void. 12. Before parting, we must put it on record that since we have decided the appeal on the issue of limitation, we have consciousl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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