TMI Blog2018 (10) TMI 1404X X X X Extracts X X X X X X X X Extracts X X X X ..... d order passed under section 201(1)/201(1A) of the Act is invalid being barred by limitation. Hence the same is quashed. - ITA No. 397/JP/2017 - - - Dated:- 24-10-2018 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri Mahendra Gargieya and Shri Devang Gargieya (Advocates) For The Revenue : Shri J.C. Kulhari (JCIT) ORDER PER VIJAY PAL RAO, JM : This appeal by the assessee is directed against the order dated 1st March, 2017 of ld. CIT (A), Alwar for the assessment year 2008-09. The assessee has raised the following grounds :- 1. The impugned order passed u/s 201(1)/201(1A) of the Act is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence, the same kindly be deleted. 2. That the impugned order passed u/s 201(1)/201(1A) of the Act dated 27.03.2014, is barred by limitation and hence, the same kindly be quashed. 3. ₹ 59,603/-: The ld. ITO (TDS), Kota erred in law as well as on the facts of the case in raising demand of the alleged non deduction of TDS u/s 201(1) of the Act and the ld. CIT (A) also erred in confirming the same, which is completely con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as to why the assessee has not raised this issue before the authorities below, the additional ground raised by the assessee cannot be admitted at this stage. 5. We have considered the rival submissions as well as the relevant material on record. There is no dispute that the additional ground raised by the assessee involves a pure question of law. The limitation for passing the order under section 201(1)/201(1A) of the IT Act is purely legal issue and once the order passed by the AO on 27.03.2014 as well as the assessment year is not in dispute then for adjudication of the said legal issue no fresh investigation of facts or material is required but the ground can be adjudicated on the basis of the facts already available on record. Hence, once the legal plea raised by the assessee does not involve or require any finding of fact or investigation of facts, then there is no bar for raising such plea at this stage. Accordingly, in view of the decision of Hon ble Supreme Court in case of NTPC vs. CIT (supra), we admit the additional ground raised by the assessee. 6. On merits of the ground no. 2, the ld. A/R of the assessee has submitted that the AO has passed the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 206C or any other provisions of the Income Tax Act do not provide any limitation for passing the order by the Assessing Officer U/s 206C(6)/206C(7) of the Act holding the assessee in default due to failure to collect tax at source. However, non-providing the limitation in the statute would not confer the jurisdiction/powers to the Assessing Officer to pass order U/s 206C at any point of time disregarding the amount of time lapse from such default of collection of tax at source. If the contention of the revenue is accepted that the Assessing Officer is free to initiate the action and pass the order U/s 206C at any time depending upon the circumstances of the case, it would amount to give an unfettered powers to the Assessing Officer to take action at any point till an indefinite period. Therefore, such interpretation or inference would defy or defeat the very purpose and scheme of the statute and further the concept of finality of matters. Hence, in such a situation, a reasonable time period is allowed to the taxing authority for a particular action or an order to be passed otherwise it would lead to unregulated powers and authorities to the taxing authority. The law is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a series of decisions, some of which have been mentioned in the order which is under challenge before us, taken the view that four years would be a reasonable period of time for initiating action, in a case where no limitation is prescribed. 20. The rationale for this seems to be quite clear - if there is a time-limit for completing the assessment then the time-limit for initiating the proceedings must be the same if not less. Nevertheless, the Tribunal has given a greater period for commencement or initiation of proceedings. 21. We are not inclined to disturb the time-limit of four years prescribed by the Tribunal and are of the view that in terms of the decision of the Supreme Court in Bhatinda District Co-op. Mil (P.) Union Ltd. s case (supra) action must be initiated by the competent authority under the Income-tax Act where no limitation is prescribed as in section 201 of the Act within that period of four years. 22. Learned counsel for the revenue submitted that the Department came to know that the assessee was an assessee in default only in November, 1998 when a survey was conducted and it came to be known only then that when the assessee had not deducted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessment of the income of the deductee. The Hon'ble High Court was of the view that the time limit for completing the assessment as per Section 153(1)(a) is two years from the end of the assessment year in which the income was first assessable which was considered as reasonable period for passing the order U/s 201(1)/201(1A) of the Act. The Hon'ble High Court has turned down the contention of limitation provided U/s 147/148 of the Act and hence, it was observed that three years would be a reasonable period as prescribed by Section 153 for completion of proceedings. However, since the Tribunal in a series of decisions had taken a view that the period within which the order U/s 201(1)/201(1A) shall be passed would be four years and therefore, the Hon'ble High Court has refrained from disturbing the view taken by this Tribunal. Following the said decision, the Hon ble Delhi High Court in a subsequent decision in the case of Vodafone Essar Mobile Services Ltd. Vs Union of India ors. (supra) has reiterated the view taken in the case of CIT Vs NHK Japan Broadcasting (supra). The Hon ble Gujarat High Court in the case of Tata Teleservices Vs. Union of India Anr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t High Court in the case of CIT (TDS) Vs. Anagram Wellington Assets Management Co. Ltd. (supra) has again considered this issue and held in para 7 as under: 7. It is true that it is the duty of the assessee to deduct TDS and the question is whether it is likely to cause any loss to the revenue if it is not deducted in time. If TDS is not deducted, it is required to be paid in the first installment of advance tax, which is required to be paid within four months from the date of filing of return. Therefore, even if the contention of Mr. Bhatt is accepted, loss that may be caused to the revenue is only to the tune of interest of four months on delayed payment of tax. Not only that when the declaration about this is made in the return, it comes within the knowledge of the Assessing Officer even if the TDS is not deducted. Therefore, we are of the view that the period of four years is reasonable period and we concur with the view taken by the Delhi High Court. It is true that the Court cannot legislate the Act, however, the Assessing Officer also cannot be given unfettered powers, which he can exercise even beyond the reasonable period of four years. Therefore, in our view, per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this question remains only academic in nature. However, since the question would be relevant for the other assessment years (more particularly, assessment year 2004-05 and 2005-06), the appeals regarding which assessment years are also connected with this appeal, learned counsel for both the parties submitted that this question may also be considered and decided in this appeal, which would then govern the other appeals of the Revenue filed against the same assessee. 26. Sri K V Aravind, learned counsel for the Revenue has submitted that sub-section (1A) of Section 201 of the Act provides for payment of interest. The sub-section, as it stood at the relevant time, prior to 1.7.2010, reads as under: ( 1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that subsection does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest at 'one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Hon'ble High Courts on this issue. Though, subsequently an amendment vide Finance Act, 2014 was again brought in the said provisions of Section 201 enlarging the period of limitation, however, the said amendment is not retrospective. Accordingly, the liability of tax collected at source is also a vicarious liability of the assessee to assist the department in the measure to avoid any possibility of tax avoidance by the persons with whom the specific transactions have been entered into by the assessee. Therefore, in our considered opinion, the analogy and reasoning given in the decisions of various Hon'ble High Courts cited supra in respect of the limitation for passing the order U/s 201 of the Act, is also applicable for considering the reasonable time period for passing the order U/s 206C of the Act. The provisions of Section 201 and 206C of the Act are having same scheme and object being the measures against the avoidance of tax by the opposite parties with whom the assessee had the transactions. Hence, applying the reasonable period of limitation as four years within which the Assessing Officer could pass the order U/s 206C(6)/206C(7) of the Act, we hold that the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
