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2019 (4) TMI 310 - AT - Income TaxDemand u/s 201(1)/201(1A) - whether demand within time limit allowed under section 201(3) - TDS u/s 194C on the reimbursement of the meal vouchers to the affiliates (restaurants/eating joints etc) by the assessee, which used by the employees of the assessee s customers for the purchase of food and non-alcoholic beverages - HELD THAT - As relying on assessee own case 2018 (4) TMI 316 - ITAT MUMBAI the order passed under section 201(1) and 201(1A) having been passed after expiry of two years from the financial year wherein the TDS statements were filed by the assessee u/s 200 is barred by limitation, hence, has to be declared as null and void. - Decided in favour of assessee
Issues Involved:
1. Whether the order passed under Section 201(1)/201(1A) of the Income Tax Act, 1961, was within the time limit allowed under Section 201(3) of the Act. 2. Whether the assessee was required to deduct TDS under Section 194C of the Act on the reimbursement of meal vouchers to affiliates. Detailed Analysis: Issue 1: Time Limit for Passing the Order under Section 201(1)/201(1A) The primary issue in these appeals revolves around whether the order passed by the Assessing Officer (AO) under Section 201(1)/201(1A) of the Act was within the time limit allowed under Section 201(3) of the Act. The assessee argued that the order was time-barred based on the provisions of Section 201(3) as it stood at the relevant time. The CIT(A) held that the order was within the time limit, noting that the time limit available with the AO is seven years in terms of the amendment carried out by the Finance Act (No.2), 2014, effective from 01.10.2014. The Tribunal examined the relevant statutory provisions and the amendments made over time. Initially, Section 201(3) provided a limitation period of two years for passing the order under Section 201(1) from the end of the financial year in which the TDS statement was filed. This was later extended to six years for cases where no statement was filed. The Finance Act, 2014, further amended this to a uniform limitation period of seven years from the end of the financial year in which the payment was made or credit was given. The Tribunal noted that the increased limitation period of seven years under Section 201(3), as amended by the Finance (No.2) Act, 2014, shall not apply retrospectively to orders which had become time-barred under the old time limit (two years/six years) set by the un-amended Section 201(3). The Tribunal relied on the decision of the Hon’ble Gujarat High Court in Tata Teleservices vs. Union of India, which held that the increased limitation period does not apply retrospectively. In this case, the assessee had filed the requisite TDS statements within the prescribed time. Therefore, the limitation period of two years as per the un-amended Section 201(3) applied. The Tribunal concluded that the proceedings initiated and the consequent order passed under Section 201(1)/201(1A) of the Act for the financial year 2009-10 relevant to assessment year 2010-11 were time-barred. Issue 2: Requirement to Deduct TDS under Section 194C The second issue was whether the assessee was required to deduct TDS under Section 194C of the Act on the reimbursement of meal vouchers to affiliates. The CIT(A) held that the assessee was required to deduct TDS on such reimbursements. However, the Tribunal did not delve into the merits of this issue, as it had already concluded that the order was barred by limitation. Therefore, the Tribunal did not need to address the substantive question of whether TDS was required on the reimbursements. Conclusion: The Tribunal allowed the appeals of the assessee, holding that the proceedings initiated and the consequent order under Section 201(1)/201(1A) of the Act were barred by limitation. The Tribunal did not address the merits of the TDS deduction issue due to its conclusion on the jurisdictional issue of limitation.
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