2023 (5) TMI 120 - AT - Income Tax

Validity of order passed u/s. 201(1)/201(1A) - period of limitation - default of non deduction of taxes from LTC payments to the employees - HELD THAT - Hon'ble Jurisdictional High Court in the case of DIT(IT) vs. Mahindra and Mahindra Ltd 2014 (7) TMI 265 - BOMBAY HIGH COURT has held though section 201 of the Act has not prescribed any limitation period, declared the assessee to be an assessee in default, the Revenue will have to exercise the said powers within a reasonable time . This as per our understanding clearly undertakes that it applies to cases prior to 01.04.2010. The assessee s case will not come under the purview of this decision. Hence, we do not find any merit in the additional ground raised by the assessee. Therefore, the additional ground raised by the assessee is dismissed. Whether order u/s. 201(1) cannot be passed after the expiry of two years from the end of the financial year in which TDS statement was filed? - As pertinent to point out that the assessee has not filed its quarterly statement before us for the purpose of considering the limitation period u/s.201(3) of the Act which specified two years from the end of the financial year in which the statement is filed . In order to give a fair opportunity to the assessee, we hereby remand this issue back to the file of the ld. CIT(A) for adjudicating the issue that the impugned order was barred by limitation on the facts of the case. Hence, the appeal is set aside to the file of the ld. CIT(A). As we have not gone into the merits of the case, the other grounds of appeal raised by the assessee are kept open.

Summary

Issues Involved:
The judgment involves issues related to challenging the order of the learned Commissioner of Income Tax (Appeals) regarding Assessment Years 2013-14, 2012-13 to 2017-18, specifically focusing on the order passed under sections 201(1) and 201(1A) of the Income Tax Act, 1961.

ITA No. 2609/Mum/2022:
The assessee bank contested the order passed under sections 201(1) and 201(1A) of the Act concerning leave fare concession (LFC) or leave travel concession (LTC) reimbursement, highlighting that the order was beyond the reasonable time limit as per the decision in the case of Mahindra & Mahindra Ltd. vs. CIT. The Assessing Officer (A.O.) observed discrepancies in the treatment of LFC/LTC amounts, including foreign legs in travel, and non-deduction of TDS. The assessee argued that the exemptions under section 10(5) of the Act applied, emphasizing the permissible routes and conditions for LTC claims. The A.O. held the assessee in default for non-deduction and non-deposit of TDS, a decision upheld by the ld. CIT(A) based on precedent cases.

The assessee appealed the ld. CIT(A)'s decision, raising concerns about the order's timeliness based on the Mahindra & Mahindra Ltd. case. The ld. AR contended that the order exceeded the prescribed time limit, citing the decision's applicability to cases before 01.04.2010. However, the Tribunal found no merit in this argument, dismissing the additional ground raised by the assessee. The assessee also invoked section 201(3) of the Act, asserting that the order cannot be passed after two years from the TDS statement filing, a ground not addressed by the ld. CIT(A). The Tribunal remanded this issue back to the ld. CIT(A) for further consideration, setting aside the appeal for reevaluation.

ITA Nos. 2726 to 2728/Mum/2022:
These appeals mirrored the issues in ITA No. 2609/Mum/2022, with no additional grounds raised. Consequently, the Tribunal remanded these appeals to the ld. CIT(A) for reconsideration in line with the decision on ITA No. 2609/Mum/2022.

ITA Nos. 2729 to 2731/Mum/2022:
In these appeals, the assessee did not raise the issue of limitation under section 201(3) of the Act. The assessee cited a judgment by the Hon'ble Madras High Court regarding LTC with foreign legs, asserting non-deduction from employee salaries to avoid contempt proceedings. The ld. AR requested a remand to verify compliance with section 201(1) conditions. The Tribunal remanded the issues to the ld. A.O. for verification, leaving other grounds open for future adjudication, and allowed the appeals for statistical purposes.

In conclusion, the Tribunal addressed various issues concerning the timeliness of orders, compliance with tax provisions, and the treatment of LTC/LFC reimbursements, remanding certain aspects back to the ld. CIT(A) or ld. A.O. for further examination and decision.