2008 (2) TMI 461 - AT - Income Tax

Summary

Issues:
Appeal against order canceling section 201(1) & 201(1A) orders and tax on perquisite under rule 3(e) of Income-tax Rules, 1962.

Analysis:
1. The revenue appealed against the cancellation of orders passed under section 201(1) and section 201(1A) of the Act, along with the issue of taxing perquisite under rule 3(e) of the Income-tax Rules, 1962. The Assessing Officer found that tax was not deducted at source for free educational facilities provided to teachers' and staff members' wards, leading to demands totaling Rs. 79,95,789 for two financial years. The CIT(A) held that no perquisite was taxable as the assessee did not incur expenses on the educational facilities for all employees, thus dismissing the revenue's contentions.

2. The revenue argued that no limitation applies to section 201(1) orders, citing the Prakash Nath Khanna case and the Aztec Software case, emphasizing clear statutory language interpretation. The assessee invoked the limitation plea before the CIT(A) and the ITAT, referring to the Raymond Woollen Mills case for a reasonable four-year period for interest levy under section 201(1A). The ITAT upheld the limitation argument, following precedents in the Sahara Airlines case and the Raymond Woollen Mills case, emphasizing timely action by the Assessing Officer and lack of cooperation from the assessee.

3. The ITAT concluded that orders under section 201(1) and 201(1A) were time-barred, aligning with the Raymond Woollen Mills and Sahara Airlines cases, as per the Sub-Inspector Rooplal directive. The NHK Japan Broadcasting case's non-referral to a Larger Bench affirmed the consistency in decisions, warranting adherence to established precedents. Consequently, the appeals of the revenue were dismissed based on the limitation aspect, without delving into the merits of the orders.

In summary, the ITAT upheld the dismissal of the revenue's appeals, emphasizing the time-barred nature of the orders under section 201(1) and 201(1A) based on established precedents and statutory interpretation principles, thereby highlighting the importance of adherence to legal precedents in tax matters.