2022 (2) TMI 78 - AT - Income Tax

Validity of order u/s 201(1)/201(1A) - period of limitation - HELD THAT - We consider that the order u/s 201(1) of the Act ought to have been passed by 31st March, 2014 i.e within 2 years from the end of the financial year in which the statement was filed however, the impuged order has been passed to 26th March, 2018, therefore, the limitation period as per the pre-amended provision had already expired, therefore, we do not find any infirmity in the decision of the ld. CIT(A). Accordingly, the appeal of the revenue stand dismissed.

Summary

Issues Involved:
1. Extension of limitation period for passing order u/s 201(1) of the Act.
2. Correct classification of TDS on Common Area Maintenance charges under Sec. 194I or Sec. 194C.

Extension of Limitation Period:
The appeal addressed the issue of whether the amendment for extending the limitation period to 7 years from the end of the financial year, provided by the Finance Act, 2014, applied to the case at hand. The revenue contended that the assessee's case fell under the pre-amended provision of section 201(3) of the Act, requiring the order u/s 201 to be passed within 2 years from the end of the relevant financial year. The Tribunal examined the relevant provisions and judicial precedents, including the Tata Teleservices case, to determine the applicability of the amended limitation period. It was concluded that the order in question, passed on March 26, 2018, exceeded the limitation period under the pre-amended provision, thus upholding the CIT(A)'s decision that the order was time-barred.

Correct Classification of TDS:
The second issue revolved around the correct classification of TDS on Common Area Maintenance charges, whether it should be deducted under Sec. 194I or Sec. 194C of the Act. The assessee argued that the TDS was made in accordance with Sec. 194 of the Act, pertaining to maintenance expenses, rather than Sec. 194(i) related to rental activities. The Assessing Officer disagreed, asserting that the TDS should have been deducted at 10% under Sec. 194(1) instead of 2% under Sec. 194(C). The CIT(A) allowed the appeal of the assessee, leading to the Tribunal dismissing the revenue's appeal, thereby affirming the decision in favor of the assessee.

In conclusion, the Tribunal's judgment in the case addressed the issues of extension of limitation period for passing orders under section 201(1) of the Act and the correct classification of TDS on Common Area Maintenance charges. The decision was based on a thorough analysis of statutory provisions, judicial precedents, and the specific circumstances of the case, ultimately resulting in the dismissal of the revenue's appeal.