2024 (5) TMI 1026 - HC - Income Tax

Suit as barred by limitation - Appellant challenges the findings of the learned Single Judge regarding the limitation period for the suit - determination of period of limitation based on TDS certificate or the date of deposit of TDS - HELD THAT - Appellant in the present appeal has not disputed the findings in law returned by the learned Single Judge with respect to the effect of deposit of TDS leading to a fresh period of limitation from the date when the deposit of TDS was made, as contemplated under Section 19 of the Act of 1963. Instead, the Appellant has sought to raise a dispute of fact with respect to the issue whether the transaction of Rs. 13,96,886/- dated 30th September, 2015 reflected in the TDS certificate pertains to the transaction emanating from the Deed of Cancellation or not. Appellant has sought to contend that the said payment of Rs. 13,96,886/- pertains to a separate transaction between the parties. We are unable to accept this contention of the Appellant as it has no basis in the pleadings of the Appellant in the application seeking leave to defend. Since no such plea was raised before the learned Single Judge, the conclusion drawn by the learned Single Judge in the impugned judgment on the basis of the TDS certificate is in consonance with both the material on record and in law. We are therefore, unable to accept the plea of the Appellant that the issue of limitation ought to be left open to be adjudicated at the final disposal. The present appeal is accordingly dismissed along with pending applications.

Summary

Issues:
1. Whether the suit is barred by limitation based on the last payment date and subsequent TDS deposit?
2. Whether the deposit of TDS by the defendant extends the period of limitation under Section 19 of the Limitation Act, 1963?
3. Whether the TDS deposit pertains to the specific transaction from the Deed of Cancellation or other transactions between the parties?

Analysis:
Issue 1:
The Respondent filed a suit seeking recovery from the Appellant based on a Deed of Cancellation. The Appellant argued that the suit is time-barred as the last payment was made on 27th March 2015, and the suit was filed on 20th September 2018. The Appellant contended that the subsequent TDS deposit on 30th September 2015 does not extend the limitation period.

Issue 2:
The Court analyzed Section 19 of the Limitation Act, 1963, which states that a fresh period of limitation starts from the date of payment on account of debt. The Court considered the TDS deposit as income received by the Respondent, extending the limitation period. It was held that the TDS deposit, being made against the Cancellation Deed, extends the limitation period as per Section 19 of the Act.

Issue 3:
The Appellant disputed the TDS deposit pertained to the specific transaction from the Deed of Cancellation. However, the Court noted that the Appellant did not raise this argument in the initial pleadings. The Court found no basis to accept the contention that the payment pertained to a separate transaction. The Court upheld the Single Judge's decision based on the TDS certificate and the lack of supporting evidence from the Appellant.

Conclusion:
The High Court dismissed the appeal challenging the findings on limitation. The Court rejected the Appellant's plea to leave the issue of limitation open for further adjudication. The dismissal of the appeal did not affect another related appeal filed by the Respondent.