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2021 (7) TMI 21 - AT - Income TaxOrder u/s 201(1) read with section 201(1A) - time limit for the passing of the order - time limit for passing of an order u/s 201(1) - Period of limitation - HELD THAT - It emerges from a perusal of the proviso that an order for the financial year 2007-08 or an earlier year is obligated to be passed on or before 31.3.2011. The deadline for passing of an order has been linked with the relevant financial year and not when the AO takes up the proceedings. It is trite law that a proviso ordinarily makes exception to and takes something away from the main provision. When the proviso to section 201(3) is stipulating for passing of an order before 31.3.2011, which is a period of more than two years as per the sub-section (3), it naturally follows that the ordinary time limit for the passing of the order within the main provision is a period of two years from the end of the relevant financial year in which the TDS statement is filed and it has no relation with the time when the AO takes up the proceedings for passing of an order. Thus we hold that the order u/s 201(1) of the Act was passed beyond the period of two years from the end of financial year in which the last TDS statement was filed. The same is hereby quashed as time barred. In view of our decision on the legal ground setting aside the order of the AO passed u/s 201(1), there is no point in considering the issue on merits as well.
Issues:
Time-barred appeal against order passed by Assessing Officer under sections 201(1) and 201(1A) of the Income-tax Act, 1961 for A.Y. 2010-11. Detailed Analysis: 1. Issue of Time Barred Appeal: The appeal was directed against the order passed by the ld. CIT(A) affirming the Assessing Officer's order under sections 201(1) and 201(1A) of the Income-tax Act, 1961 for the assessment year 2010-11. The appeal was filed 101 days late, and a condonation application was submitted. The Tribunal accepted the reasons for the delay and admitted the appeal for disposal. 2. Factual Matrix and Anomalies Identified: The assessee, a bank, accepted deposits on which tax was deductible at source under section 194A of the Act. The Assessing Officer found anomalies in the TDS statements filed by the assessee for different quarters. Some cases had no tax deduction, while others had short deductions. The AO, in 2017, treated the assessee as in default and raised a demand. The assessee challenged this before the CIT(A), who dismissed the appeal on the grounds that the order was within the time limit specified under the Act. 3. Legal Provisions and Time Limit for Passing Order: The Tribunal examined the relevant provisions concerning the time limit for passing orders under section 201(1) of the Act. It noted the insertion of sub-section (3) by the Finance Act, 2009, which provided a two-year time limit from the end of the financial year in which the TDS statement was filed. The order in question was passed in 2017, beyond this two-year period. 4. Interpretation of Amended Provision: The Department argued that the order was within the time limit specified by the Finance Act, 2014, which extended the period to seven years. However, the Tribunal held that the amendment could not revive an already time-barred action. The law applicable at the time of filing the TDS statement governed the time limit for passing the order. 5. Clarification on Amendment's Impact: The Tribunal clarified that the amendment's effect was limited to cases where the time limit had not expired before the amendment's enactment. It emphasized that the time limit for passing the order should be determined concerning the law in force when the TDS statements were filed, not when the AO proceeded to pass the order. 6. Decision and Conclusion: The Tribunal quashed the order passed under section 201(1) as time-barred, holding that it was beyond the two-year limit specified in the Act. Consequently, the appeal was allowed, and the order was set aside. The Tribunal did not delve into the merits of the case, given the time-barred nature of the order. In conclusion, the Tribunal's decision focused on the interpretation of the time limits for passing orders under the Income-tax Act, emphasizing that subsequent amendments could not extend the time for actions already time-barred. The judgment clarified the importance of adhering to the statutory time limits prescribed by the law in force at the relevant time.
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