2018 (7) TMI 587 - AT - Income Tax

TDS deposited delayed to the account of the Central Government - assessee in default u/s 201 - tax deducted was remitted beyond the respective due dates prescribed under Chapter XVII B of the Act read with relevant rules thereon - period of limtation - Held that - Hon ble Supreme Court in the case of Hindustan Coca Cola Beverages Ltd 2007 (8) TMI 12 - SUPREME COURT OF INDIA had held that if the payee had disclosed the subject mentioned transaction as his receipts and in his return, then the assessee payer should not be treated as assessee in default u/s 201 of the Act. Even in that scenario, the assessee would be eligible to be levied with interest u/s 201(1A) of the Act till the date of payment of taxes by the payee thereon. Hence when the assessee payer himself delays the remittance of TDS which has been deducted by it, there is no reason why the interest u/s 201(1A) of the Act should not be charged on it. Looking into the facts of the case from this angle and by placing reliance on the decision of the Hon ble Jurisdictional High Court in the case of Bhura Exports Ltd 2011 (8) TMI 449 - CALCUTTA HIGH COURT which is binding on us, we hold that when there is no time limit stipulated in the statute for passing an order u/s 201(1A) of the Act upto 31.3.2010. for all the assessment years falling prior to 31.3.2010, the order could be passed at any time by the ld AO . - Decided against assessee

Summary

Issues Involved:
- Interpretation of time limitation for passing order under section 201(1A) of the Income Tax Act, 1961.

Analysis:
1. The appeals by the Assessee were against the orders of the Commissioner of Income Tax(Appeals) regarding the levy of interest under section 201(1A) of the Income Tax Act for the Assessment Years 2003-04 and 2004-05. The main issue was whether the order passed by the Assessing Officer was time-barred.

2. The Assessee argued that the notice triggering the proceedings under section 201(1A) was issued beyond a reasonable period from the end of the relevant financial year. They contended that prior to 1.4.2010, there was no time limit specified in the statute for passing such orders. The revenue, however, relied on a High Court decision stating that in the absence of a prescribed time limit, there is no prohibition on the period for taking action under the statute.

3. The Assessee further argued that a reasonable period for passing such orders should be imported from other provisions of the Act, citing a Bombay High Court decision. They contended that the proceedings initiated in this case were beyond a reasonable period of 4 years from the end of the relevant financial year. However, the Tribunal did not agree with the retrospective application of the amendment introduced in 2010, emphasizing that substantive law should be construed prospectively.

4. The Tribunal held that in cases where there is no time limit prescribed in the statute, the action can be taken at any point by the revenue. They emphasized the principle of unjust enrichment, stating that interest under section 201(1A) is charged automatically in case of delayed remittance of tax deducted at source. Referring to a Supreme Court decision, the Tribunal upheld the Assessing Officer's order, stating that for assessment years prior to 31.3.2010, the order could be passed at any time.

5. Ultimately, the Tribunal dismissed the appeals of the Assessee, upholding the order of the Commissioner of Income Tax(Appeals) regarding the levy of interest under section 201(1A) of the Income Tax Act for the respective assessment years.

6. The judgment was pronounced on 06.07.2018 by the Appellate Tribunal ITAT Kolkata, with Hon'ble Shri M.Balaganesh and Hon'ble Shri S.S.Viswanethra Ravi presiding over the case. The Assessee was represented by Shri G. Banerjee, Advocate, while the Respondent was represented by Shri A. Bhattacharjee, Addl. CIT.