2024 (1) TMI 1064 - AT - Income Tax

Validity of Order u/s 201(1) and 201(1A) - period of limitation - deeming a person to be an assessee-in-default - Non deduction of TDS - bone of contention is the order u/s. 201(1) of the Act which is dated 31.10.2019. The TDS return was filed by the assessee on 07.05.2013, therefore, the contention of the assessee that the impugned order is barred by limitation as it expires after two years which means that the order ought to have been framed on or before 31.03.2015 and as the order has been framed on 31.10.2019 it is barred by limitation - HELD THAT - Similar issue was considered by this Tribunal in M/s. Cantabil Retail India Ltd. Versus ACIT Circle 73 (1) New Delhi 2023 (7) TMI 462 - ITAT DELHI as the time limitation for passing an order under sub-section (1) to Section 201 i.e deeming the present assessee before us, as an assessee-in-default under sub-section (1) to Section 201 of the Act could have validly been done within a period of 2 years from the end of the financial year in which the statement u/s. 200 was filed by the assessee, i.e., latest by 31.03.2014, as per the law as was then available on the statute, therefore, the order passed by the AO u/ss. 201(1) /201(1A) of the Act, dated 29.03.2018 is clearly barred by limitation. Appeal of assessee allowed.

Summary

Issues Involved:
1. Time limitation for passing order under section 201(1) of the Income Tax Act.
2. Validity of order passed by the Assessing Officer without giving opportunity of being heard.

Summary:
Issue 1: The appeal challenged the order passed by the learned commissioner of income tax (TDS) under section 250 of the act, contending that it was time-barred under section 201(3). The Tribunal held that the order dated 31.10.2019 was barred by limitation as it exceeded the two-year time frame from the end of the financial year in which the statement was filed, as per the law then available. The Tribunal referred to a previous decision and concluded that the order was clearly barred by limitation, thus quashing it.

Issue 2: The grievance of the assessee included the contention that the Assessing Officer erred in passing the order without giving any opportunity of being heard, which was against the principle of natural justice. The Tribunal, after finding the order to be barred by limitation, did not delve into the merits of the case, ultimately allowing the appeal of the assessee.

The Tribunal, in line with the decision of the coordinate Bench, held that the order dated 31.10.2019 was barred by limitation and therefore liable to be quashed. The Tribunal emphasized the importance of adhering to time limitations for passing orders under the Income Tax Act, ensuring procedural fairness and upholding the principles of natural justice.