2019 (7) TMI 1932 - AT - Income Tax

Validity of order passed u/s 201 and 201(1A) - period of limitation - Time limits of appeals for the assessment year 2009-10 - Filing of quarterly statement is in the financial years 2009-10 and 2010-11 - HELD THAT - Considering the date of filing of the statements of TDS for 4 quarter of the year the financial year involved is F.Y. 2009-10 2011-12. In that case the due date for passing of order under sub-section (3)(i) of section 201 of the Act is 2 years from the end of the financial year 2009-10 or 2011-12 as the case may be. Thus the Assessing Officer had time to pass an order for such appeals till 31st March 2012 and 31st March 2014 as the case may be. Whereas in these 3 appeals the Assessing Officer passed the order u/s 201(3)(i) of the Act only 30th March 2016 29th March 2016 and 29th March 2016 for the appeals respectively. From this point of interpretation of the Statute we are of the opinion the order passed by the Assessing Officer in these 3 appeals are without valid jurisdiction. The orders stand barred by limitation in these cases. Accordingly the legal issue raised by the assessee is allowed. Time limits of appeals for the A.Y. 2010-11 - Filing of quarterly statement is in the financial years 2009-10 and 2010-11 - There are 11 appeals in this group and they relates to the assessment year 2010-11. In this bunch of 11 appeals the financial year in which the TDS statements are filed covers the financial years 2009-10 and 2010-11. Considering the fact the last quarter of the statement is filed in the financial year 2010-11 the time limits available to the Assessing Officer to pass an order u/s 3(i) of section 201 of the Act is two years from the end of the said financial year 2010-11. Thus in that case the Assessing Officer is under obligation to pass an order in these circumstances by 31st March 2013. Whereas the Assessing Officer passed the order in these 11 appeals in the year 2016 and 2017 respectively i.e. subsequent to the due date specified in the Act. From this point of view and the interpretation of the Statute the orders passed by the Assessing Officer are without any valid jurisdiction. Accordingly the said relevant legal issue raised by the assessee in all the 11 appeals are allowed. Time limits for passing the order in respect of assessment year 2009-10 (2 appeals) of 11 group of cases where quarterly statements of TDS are not furnished for all the 4 quarters of the financial year - As for this bunch of two appeals pertaining to assessment year 2009-10 the last due date for passing the order u/s 201(3)(i) of the Act is 31st March 2013. In both the appeals the order passed by the Assessing Officer on 29.03.2016 commonly i.e. subsequent to the said due date. Accordingly this bunch of two appeals relating to assessment year 2009-10 has to be allowed on technical ground. Time limits for passing the order in respect of assessment year 2010-11 (9 appeals) of 11 group of cases where quarterly statements of TDS are not furnished for all the 4 quarters of the financial year - Considering the fact the last quarter of the statement is filed in the financial year 2011-12 the time limits available to the Assessing Officer to pass an order u/s 3(i) of section 201 of the Act is two years from the end of the financial year 2011-12 i.e. 31st March 2014. Assessing Officer passed orders in this bunch of 9 appeals in the month of 2016 and in the month of 2017 i.e. subsequent to the expiry of the said due date. In any case these orders were not passed before March 2014. Considering the above referred interpretation of the Statute as well as the facts available on record we are of the opinion the order passed by the Assessing Officer under sub-section 3(i) of section 201 of the Act is without any valid jurisdiction.

Summary

Issues Involved:
1. Limitation of time for passing the order under Section 201(1) & 201(1A) of the Income Tax Act.
2. Requirement of passing the order financial year-specific or quarter-specific for TDS statements.
3. Merits of treating the assessee as default under Section 201.

Detailed Analysis:

1. Limitation of Time for Passing the Order under Section 201(1) & 201(1A):

The primary issue involves whether the orders passed under Section 201(1) & 201(1A) are barred by limitation. The assessee contended that the orders should have been passed within two years from the end of the financial year in which the TDS statements were filed, as per Section 201(3). The orders were passed beyond this period, making them invalid. The CIT(A) dismissed this claim, relying on an amendment effective from 01.10.2014, which extended the limitation period to seven years. However, the Tribunal found that the amendment cannot retrospectively revive a time-barred order. Citing precedents like Troikaa Pharmaceuticals Ltd. v. UOI and Tata Teleservices v. UOI, the Tribunal held that orders passed after the original limitation period had expired are invalid.

2. Requirement of Passing the Order Financial Year-Specific or Quarter-Specific for TDS Statements:

The Tribunal examined whether the orders should be financial year-specific or quarter-specific. It was observed that the assessee had filed TDS statements for all quarters in some appeals and for fewer quarters in others. For the appeals where all quarterly statements were filed within the financial year, the Tribunal applied the two-year limitation from the end of the financial year. For the appeals where not all quarterly statements were filed, the Tribunal considered the financial year in which the last statement was filed and applied the two-year limitation from the end of that financial year. This approach resulted in several orders being deemed time-barred and invalid.

3. Merits of Treating the Assessee as Default under Section 201:

The Tribunal did not delve deeply into the merits of treating the assessee as default under Section 201, as the primary issue of limitation rendered these discussions academic. The Tribunal noted that the Assessing Officer had treated the assessee as default for not deducting TDS on interest payments based on incorrect Form 15G/15H filed by depositors. However, since the orders were found to be time-barred, these grounds were not adjudicated.

Conclusion:

The Tribunal concluded that the orders passed under Section 201(1) & 201(1A) were barred by limitation and thus invalid. Consequently, the other grounds raised by the assessee became academic and were dismissed as such. The appeals were partly allowed based on the limitation issue, rendering the orders without valid jurisdiction. The decision underscored the importance of adhering to statutory time limits for passing orders under Section 201.