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2019 (4) TMI 564

resident/overseas entities - HELD THAT:- A bare perusal of sub-section (3) as it was inserted by the Finance Act, 2009 and subsequently amended by the Finance Act, 2014 would show that reference is to the payments made without deduction of tax at source to "person resident in India". The sub-section (3) is silent about the limitation period for passing the order u/s. 201 where the payments are made without deduction of tax at source to non-resident/overseas entities. In the present case as is evident from the impugned order, during the assessment years under appeal the payments have been made to the entities based in Canada, USA, UK, Belgium, Sweden, UAE and Hongkong. - The provisions of sub-section (3) to section 201 does not get attracted as it 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, th .....

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ome Tax (Appeals). The Commissioner of Income Tax (Appeals) vide impugned order confirmed the entire demand raised by the Assessing Officer; except (i) the demand raised towards payments made to the companies resident in countries other than Belgium for software maintenance charges and testing charges; and (ii) the demand raised towards payment of personal management fees. Against the aforesaid findings of Commissioner of Income Tax (Appeals), both, the assessee and the Revenue are in appeal before the Tribunal. 3. The assessee has filed appeal in ITA Nos. 1669 to 1671/PUN/2014 for assessment years 2008-09 to 2010-11, respectively. The Revenue has filed cross appeals in ITA Nos. 1685 to 1688/PUN/2014 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 asses .....

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(1A) of the Income-tax Act, 1961. 1 : 2 The Appellant submits that considering the facts and circumstances of the case and the law prevailing on the subject the Order passed u/s. 201(1) & 201(1A) of the Income-tax Act, 1961 is void-ab-initio being barred by limitation. 1 : 3 The Appellant submits the impugned Order passed u/s. 201(1) & 201(1A) of the Income-tax Act, 1961 be held as barred by limitation and consequently be struck down as null and void. 2 : 0 Re.: General 2 : 1 The Appellant craves leave to add, alter, amend, substitute and/or modify in any manner whatsoever all or any of the foregoing additional grounds of appeal at or before the hearing of the 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 additiona .....

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r credited or credit is given to the payee. The ld. AR contended that the Assessing Officer passed the order u/s. 201(1) and 201(1A) on 06-02-2014, the demand raised for the assessment years 2008-09 to 2011-12 u/s. 201 is within the period of limitation as specified in sub-section (3) of section 201 of the Act. The ld. DR contended that the case laws relied on by the assessee are distinguishable on facts. The Special Bench decision was rendered in 2009, whereas, the provisions of sub-section (3) of section 201 were inserted by the Finance (No. 2) Act, 2009 w.e.f. 01-04-2010. The ld. AR contended that the decision rendered by Pune Bench of Tribunal in the case 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 .....

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Bench of Tribunal after considering various provisions of the Act at length and after considering catena of judgments concluded as under : 17.10 …………………… As we have held above that the order under s. 201(1) is akin to assessment and further the assessment includes reassessment, naturally the reasonable time-limits for initiation and completion of action under s. 201(1) have to be similar to those available for assessment under s. 147. Accordingly we hold that proceedings under s. 201(1) can be initiated in the extended period of six years from the end of the relevant assessment year if the income by virtue of sum paid without deduction of tax at 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 .....

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source to person resident in India‟. The sub-section (3) is silent about the limitation period for passing the order u/s. 201 where the payments are made without deduction of tax at source to non-resident/overseas entities. In the present case as is evident from the impugned order, during the assessment years under appeal the payments have been made to the entities based in Canada, USA, UK, Belgium, Sweden, UAE and Hongkong. Thus, the provisions of sub-section (3) to section 201 does not get attracted as it relates only to the payments made without deduction of tax to person resident in India. 14. In our considered opinion, 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 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 y .....

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