2013 (7) TMI 378 - AT - Income Tax

Non deduction of TDS on Interest payment on unsecured loans, Payment of salary (AY 2001-02 only), Payment of professional fees & Payment to contractors - reopening of assessment - AO worked out the demand and interest payable on account of the defaults u/s 201(1) & 201(1A) - assessee contested against demand as barred by limitation - CIT(A) deleted the addition - Held that - CIT(A) in the appeals under consideration, orders u/s 201(1) and 201(1A) for the FY 2000-01 to 2002-03 to the assessment years 2001-02 to 2003-04 were passed on 28/02/2008 i.e. beyond a period of 4 years from the end of the respective financial years. Therefore no infirmity in the order of the CIT(A) in cancelling the orders passed by the AO u/s 201(1) and 201(1A) and deleting the demands raised consequentially. In favour of assessee.

Summary

Issues:
Appeal against common order of CIT(A)-II, Hyderabad for assessment years 2001-02, 2002-03 & 2003-04 - Whether orders u/s 201(1) & 201(1A) are barred by limitation - Admissibility of additional ground of appeal - Cancelling orders passed by AO u/s 201(1) and 201(1A) - Demand raised on account of defaults in TDS payments.

Analysis:
The appeals before the Appellate Tribunal ITAT Hyderabad involved challenges against a common order of CIT(A)-II, Hyderabad for assessment years 2001-02, 2002-03 & 2003-04. The appeals pertained to the issue of whether orders u/s 201(1) & 201(1A) were barred by limitation. The AO had raised demands against the assessee for defaults in TDS payments related to various types of payments made during the mentioned assessment years. The CIT(A) admitted an additional ground of appeal raised by the assessee, contending that the orders u/s 201(1) & 201(1A) could not be reopened as more than four years had passed since the end of the relevant financial years. The CIT(A) considered the recent decision of ITAT Hyderabad in the case of AP State Civil Supplies Corporation, which held that orders u/s 201(1) beyond four years were time-barred.

The CIT(A) analyzed the ITAT's decision in the AP State Civil Supplies Corporation case and concluded that the orders u/s 201(1) and 201(1A) for the relevant years were passed beyond the four-year limitation period. Consequently, the CIT(A) canceled the orders passed by the AO u/s 201(1) and 201(1A) and deleted the demands raised. The revenue appealed against the CIT(A)'s decision, arguing that the orders were not time-barred and cited various case laws to support their contention. However, the Appellate Tribunal upheld the CIT(A)'s order, noting that the issue was squarely covered by the decision in the AP State Civil Supplies Corporation case, where the orders were passed beyond the four-year limitation period.

In conclusion, the Appellate Tribunal dismissed all three appeals, affirming the CIT(A)'s decision to cancel the orders passed by the AO u/s 201(1) and 201(1A) and delete the demands raised due to the defaults in TDS payments. The Tribunal found no infirmity in the CIT(A)'s order and upheld it for all the assessment years under consideration.