2017 (7) TMI 694 - HC - Income Tax

Levy of interest under Sections 201 (1) and 201 (1A) - prescribed time limit for invoking provisions of Section 200 and Section 201 - default in non-deduction of TDS relates to A.Y. 1994-95 while ultimate order of demand was passed in March 2002 - period of limitation - Held that - The question whether any specific period of limitation like a statutory period can be applied in such a case when no time limit has been provided by legislature in a particular statute has been considered by this Court in detail in M/s Mass Awash Private Limited Vs. Commissioner of Income Tax (International Taxation) 2017 (7) TMI 664 - ALLAHABAD HIGH COURT . We find that both the substantial questions of law formulated above have to be answered in favour of Revenue and against Assessee. However delay occurred in passing order under Section 201(1) and 201(1A) of Act 1961 whether justified or not is a question of fact which has to be examined independently on the basis of facts of each individual case.In the present case this aspect has not been looked into by Tribunal in the light of judgment bove we therefore remand the matter to Tribunal and direct that it shall consider this aspect

Summary

Issues:
1. Justification of summarily dismissing the order sustaining levy of interest under Sections 201(1) and 201(1A) of Income Tax Act, 1961.
2. Application of limitation period in the case and quashing of the order under Section 201(1)/201(1A).
3. Examination of delay in passing the order under Section 201(1) and 201(1A) of the Act.

Analysis:
1. The appeal arose from a judgment related to Assessment Year 1994-95 concerning the non-deduction of TDS by the Assessee-IGCL, resulting in a demand for US Dollar 4,082,143. The CIT (A) allowed the appeal for de-novo consideration, leading to a fresh order in 2002. The Tribunal, based on the limitation period of four years, quashed the order as it related to the A.Y. 1994-95, which was beyond the limitation period citing Sahara Airlines Ltd. vs. Deputy Commissioner of Income Tax 2002 (83) ITD 11. The Tribunal's decision was challenged on the ground of limitation.

2. The High Court considered the absence of a prescribed time limit for invoking Sections 200 and 201 of the Act. Referring to a previous judgment, the Court found that the Tribunal's decision was correct in applying the limitation period. However, the Court emphasized that the delay in passing the order under Section 201(1) and 201(1A) needed independent examination based on the facts of each case. The Court remanded the matter to the Tribunal for a fresh order considering the justification of the delay.

3. In light of the Court's detailed examination in a previous case, the substantial questions of law were answered in favor of the Revenue and against the Assessee. The Court directed the Tribunal to reconsider the delay in passing the order under Section 201(1) and 201(1A) to determine if the delay was justified or if it vitiated the order. The appeal was allowed, setting aside the Tribunal's judgment and remanding the matter for further examination and a fresh order.