Income Tax Appellate Tribunal - Delhi
M/S. Green Line (Punjab), New Delhi vs Ito (Tds), New Delhi on 16 May, 2018
INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "F": NEW DELHI
BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER
AND
SHRI O.P. KANT, ACCOUNTANT MEMBER
ITA No.:- 1273/Del/2016
Assessment Year: 2003-04
Green Line (Punjab) ITO (TDS)
1-25, Lajpat Nagar-III, Ward-50(5)
'New Delhi - 110 024 Vs. New Delhi.
PAN DELG04925E
(Appellant) (Respondent)
Assessee by: Shri K.R. Manjhi, Advocate
Respondent by : Shri Atiq Ahmed, Sr. DR
Date of Hearing 16/05/2018
Date of 16/05/2018
pronouncement
ORDER
PER AMIT SHUKLA, J.M.
The aforesaid appeal has been filed by the assessee against the impugned order dated 23.3.2015 passed by Ld. CIT(Appeals) 41, New Delhi in relation to order passed u/s 201(1)/201(1A) for the assessment year 2002-03 and 2003-04.
2. Before us assessee has challenged the tax liability u/s 201(1) and interest u/s 201(1A) of Rs. 38,520/- and Rs. 37,461/-, respectively for the relevant financial years 2001-02 & 2002-03. Before us, Ld. Counsel has also challenged the impugned order passed by the AO on the ground that it is barred by limitation as the proceedings u/s 201 have been initiated beyond the period of 4 years and in support he has strongly relied upon the decision of Hon'ble Delhi High Court in the case of Vodafone Essar Mobile Services vs. Union of India, reported in (2016) 385 ITR 436 wherein the Hon'ble High Court following its earlier judgments has held that any levy of tax liability and interest u/s 201(1) and 201(1)(1A) beyond the period of four years is barred by limitation.
2. The facts in brief are that the survey operation u/s 133A was carried on 17.3.2003 at the premises of assessee and from the perusal of Form No. 26C, it was revealed that assessee has deducted the tax on Rs. 15,90,000/-, but the profit and loss account does not reflect any such figure. After asking for the details of contract given and debited in the profit and loss account, assessee filed copy of ledger account under the head "purchases" which shows purchase of Rs. 32,07,861/- was shown, wherein amount debited to profit and loss also reflects maintenance charges of Rs. 18,25,620/- for which AO was of the opinion assessee should have deducted TDS u/s 194C and accordingly, he treated the amount of default u/s 201 of Rs. 38,520/- and interest u/s 201(1)(1A) of Rs. 37,461/-. However the order u/s 201(1)/201(1)(1A) was passed on 29.3.2011, i.e, almost at the fag end of seven years from the end of the relevant assessment year. Before the Ld. CIT(A) the assessee has strongly pleaded that the impugned order as well as the proceedings u/s 201 are time barred, however the Ld. CIT(A) rejected the said plea on the ground that though the survey was conducted in 17.3.2003 but notice for proceedings u/s 201(1)(1(A) was issued during the relevant financial year, hence Assessing Officer was competent to pass the order in this year.
24. We find that Hon'ble Delhi High Court, earlier in the case of CIT vs. NHK Japan Broadcasting Corporation 305 ITR 137 has held that action for treating the assessee as 'assessee in default' u/s 201(1) must be initiated within a reasonable period even though the section does not prescribe time limit. Their Lordships have held that reasonable time period should be four years which they have held after referring to the various provision and scheme of the Income Tax Act. This judgement has been reiterated again by the Hon'ble Delhi High Court in the case of CIT vs. Idea Cellular Ltd. 325 ITR 148 (Delhi) and also by Hon'ble Karnataka High Court in the case of Bharti Airtel Limited vs. DCIT (2015) 372 ITR 33. Later on, an amendment was brought u/s 201, by way of proviso below sub-section (3) to Section 201, whereby it was provided that any order for a financial year commencing on or before first day of April, 2007 may be passed at any time on or before 31st day of March, 2011. Such an amendment brought by the Finance (No.2) Bill 2009 was clarified by CBDT vide Circular No. 5 of 2011 explaining the said amendment which came into effect w.e.f 1st April, 2010. The amendment as well as the said CBDT circular had come up for consideration before the Hon'ble Delhi High Court in the case of Vodafone Essar Mobile Services vs. Union of India (supra) wherein Hon'ble High Court after detailed discussion referring to the catena of judgments held that CBDT Circular No. 5 of 2011, clarifying that the proviso to section 201(3) which was made to extend the time limit of completing the proceedings and passing orders in relation to the pending cases cannot be interpreted so as to enable the department to initiate proceedings for declaring assessee to be 'assessee in default' u/s 201 of the Act for a period earlier than four years prior to 31st March, 2011. Accordingly, their lordship held that the barred limit of four years which was earlier held by the Courts to be applicable in such 3 cases cannot be extended by said amendment. Thus, respectfully following the ratio laid down Hon'ble High Court, we hold that the initiation of proceedings u/s 201(1) and consequently passing of order u/s 201(1) / 201(1)(A) on 29.3.2011 is barred by limitation and accordingly, the tax liability in interest is quashed.
5. In the result appeal of the assessee is allowed.
Order was pronounced in the Open Court on 16th May, 2018.
sd/- sd/-
(O.P. KANT) (AMIT SHUKLA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 16/05/2018
Veena
Copy forwarded to
1. Applicant
2. Respondent
3. CIT
4. CIT (A)
5. DR:ITAT
ASSISTANT REGISTRAR
ITAT, New Delhi
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