2013 (4) TMI 858 - AT - Income Tax

Summary

Issues involved:
The judgment involves issues related to non-deduction of TDS on interest paid by the assessee to its customers, as well as the time limitation for passing assessment orders u/s 201(1), 201(1A), and 206C(7) of the Income Tax Act.

Non-deduction of TDS on interest paid by the assessee:
The Revenue appealed against the order of the ld. CIT(A) regarding the non-deduction of TDS on interest paid by the assessee to its customers. The ld. CIT(A) allowed relief to the assessee based on Board's Circular No.3/2010 and the Ahmedabad Bench of the Tribunal's decision in the case of Bank of Maharashtra vs. ITO. It was held that the interest credited was for macro monitoring and not actual payment to depositors, hence section 194A was deemed not applicable.

Assessment orders u/s 201(1), 201(1A), and 206C(7) of the Income Tax Act:
The assessee appealed against the orders of the ld. CIT(A) upholding the Assessing Officer's orders u/s 201(1), 201(1A), and 206C(7) of the Income Tax Act. The assessee contended that the orders passed for assessment years 1997-98, 1998-99, and 1999-2000 were time-barred, citing the Mahindra and Mahindra Ltd. case and judgments of the Hon'ble High Court of Delhi. The Tribunal held that the orders were passed beyond the reasonable time limit of six years from the end of the assessment year, thus annulling the orders as they were beyond the limitation period.

Conclusion:
The Tribunal dismissed the appeals of the Revenue while allowing the appeals of the assessee. The orders under section 201(1), 201(1A), and 206C(7) of the Act were deemed to be passed beyond the reasonable time limit and were annulled. The judgment followed the decisions of the Hon'ble Delhi High Court and the Special Bench of the Tribunal, which favored the assessee.