TMI Blog2019 (4) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... relates only to the payments made without deduction of tax to person resident in India. Where the payments are made to the entities/persons other than the persons specified in sub-section (3), the limitation period of one year from the end of financial year in which the proceedings u/s. 201 were initiated, as laid down in MAHINDRA & MAHINDRA LIMITED [2014 (7) TMI 265 - BOMBAY HIGH COURT]would apply. In the instant case, since, the order u/s. 201 has been passed much after the elapse of one year period from the end of financial year in which proceedings u/s. 201 were initiated, the order u/s. 201 in the impugned assessment years is void-ab-initio and hence, is liable to be quashed. - decided against revenue. - ITA Nos.1669, 1670 & 1671/PUN/2014, ITA Nos.1685 to 1688/PUN/2014, CO No.60/PUN/2018 - - - Dated:- 5-4-2019 - Shri R.S. Syal, Vice President And Shri Vikas Awasthy, Judicial Member For the Assessee : Shri R. Murlidhar For the Revenue : Shri Pankaj Garg ORDER PER BENCH : These cross appeals by the assessee and the Revenue are directed against the consolidated order of Commissioner of Income Tax (Appeals)- IT/TP, Pune dated 30-06-2014 for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for assessment years 2008-09 to 2011-12, respectively. The assessee has filed Cross Objections in CO No. 60/PUN/2018 for assessment year 2011-12. 4. The Cross Objections filed by the assessee are time barred by 878 days. The assessee has filed application supported by an affidavit seeking condonation of delay in filing of the Cross Objections. It has been contended that the appeal of assessee for assessment year 2011-12 was allowed in full by the First Appellate Authority and the assessee did not deem it fit to file further appeal. Subsequently, it transpired that the assessee has cause of action on legal issue. Hence, the Cross Objections were filed challenging the validity of order passed u/s. 201(1) and 201(1A) of the Act, as the order was passed much beyond the period of limitation, hence, void ab initio. The issue raised by the assessee in Cross Objections is purely legal which goes to the root of validity of order raising demand u/s. 201(1) and 201(1A) of the Act. 4.1 After examining the reasons for delay in filing of Cross Objections we are satisfied that the delay in filing of Cross Objections is unintentional and bonafide. The Hon ble Supreme Court of India in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal. Identical additional grounds of appeal have been raised by the assessee in ITA Nos. 1670 2671/PUN/2014 for assessment years 2009-10 and 2010-11, respectively. The Cross Objections for the assessment year 2011-12 are also on the same legal issue, challenging validity of order dated 06-02-2014 being passed beyond the period of one year from the end of financial year in which proceedings u/s. 201 of the Act were initiated. 6. Shri R. Murlidhar appearing on behalf of the assessee submitted that the additional grounds raised by the assessee are purely legal and no additional documents are required to be furnished for adjudication of the additional grounds. Hence, the same should be admitted in the light of decision of Hon ble Supreme Court of India in the case of NTPC Ltd. Vs. Commissioner of Income Tax reported as 229 ITR 383. 6.1 The ld. AR submitted that in the impugned assessment years show cause notice u/s. 201(1) and 201(1A) of the Act was issued on 27-01-2012. The order u/s. 201(1) and 201(1A) common for all the impugned assessment years was passed by the Assessing Officer on 06-02-2014. As per the decision of Special Bench of Tribunal in the case of Mahi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Vodafone Cellular Ltd. Vs. Deputy Commissioner of Income Tax (supra) was in respect of order passed u/s. 201(1) and 201(1A) in the absence of notice under the aforesaid provisions. Hence, the aforesaid decisions are distinguishable. 8. Controverting the submissions forwarded on behalf of the Revenue the ld. AR submitted that the provisions of sub-section (3) would not apply in the case of assessee. The provisions of sub-section (3) are attracted only where the assessee fails to deduct tax at source on the payments made to a person resident in India‟. Whereas, in the present case the payments which are subject matter of order u/s. 201(1) and 201(1A) are the payments made by the assessee to foreign entities. The ld. AR contended that this fact has been recorded by the Assessing Officer in para 2 and para 4 of the order dated 06-02-2014 passed u/s. 201(1) and 201(1A) of the Act. The payments in respect of which the provisions of section 201 have been invoked does not include any payments made to the persons resident in India. 8.1 The ld. AR submitted that if additional grounds raised by the assessee are allowed, the grounds of appeal raised by the assessee would become ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source by the payer chargeable to tax in the hands of the payee is equal to or more than one lakh rupees. If on the other hand such amount is less than ₹ 1 lakh then the lower period of four years as prescribed under s. 149(1)(a) from the end of the relevant assessment year is available for initiation of proceedings under s. 201(1). Going by the same logic and taking assistance from s. 153(2), the completion of proceedings under s. 201(1), that is the passing of the order under this sub-section, has to be within one year from the end of the financial year in which proceedings under s. 201(1) were initiated. Same time-limits for initiation and passing of orders will be valid for the passing of order under s. 201(1A) also. We hold accordingly. 11. The Department assailed the findings of Special Bench of Tribunal before the Hon ble Bombay High Court. The Hon ble Bombay High Court affirmed the findings of Special Bench. Thus, in the light of decision of Hon ble Jurisdictional High Court and the Special Bench of Tribunal, the period of limitation for passing the order u/s. 201 is one year from the end of the financial year in which the proceedings u/s. 201 of the Act are ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made to the entities/persons other than the persons specified in sub-section (3), the limitation period of one year from the end of financial year in which the proceedings u/s. 201 were initiated, as laid down by the Special Bench of Tribunal and affirmed by the Hon ble Jurisdictional High Court would apply. In the instant case, since, the order u/s. 201 has been passed much after the elapse of one year period from the end of financial year in which proceedings u/s. 201 were initiated, the order u/s. 201 in the impugned assessment years is void-ab-initio and hence, is liable to be quashed. We hold and direct accordingly. 15. In the result, the additional grounds raised in the appeals for assessment years 2008-09 to 2010-11 and Cross Objections for assessment year 2011-12 by the assessee are allowed. 16. As we have allowed the appeals of assessee on the legal issue, the grounds raised by the assessee challenging the additions on merits have become academic and hence, are not deliberated upon. 17. The Revenue in appeals for all the four assessment years i.e. assessment years 2008-09 to 2011-12 have challenged the order of Commissioner of Income Tax (Appeals) on merits. Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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