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TMI Blog2019 (3) TMI 1453X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 2001-02. We further notice that the coordinate Bench has quashed the impugned order by following the judgment of Director of Income Tax (International taxation) vs. Mahindra and Mahindra Ltd. [2014 (7) TMI 265 - BOMBAY HIGH COURT]. Since, the facts of the case pertaining to the A.Y. 2003-04 are identical to the facts of the present case and the coordinate Bench has decided the identical issue in favour of the assessee, we respectfully following the decision of the coordinate Bench allow the legal ground raised by the assessee and quash the order passed by the AO u/s 201 (1) and 201 (IA) of the Act. - Decided in favour of assessee. - ITA No. 4048/MUM/2016, ITA No. 4049/MUM/2016 - - - Dated:- 3-12-2018 - Shri B.R. Baskaran (AM) And Shri Ram Lal Negi (JM) For the Assessee : Shri Nitesh Joshi Manoj Dixit (AR) For the Revenue : Shri Abi Rama Kartikiyan (DR) ORDER PER RAM LAL NEGI, JM The assessee has filed these appeals against the two orders dated 18.06.2014 and 29.05.2014 passed by the Commissioner of Income Tax (Appeals) (for short the CIT (A) )-14, Mumbai, for the assessment years 2001-02 and 2004-05 respectively, whereby the Ld. CIT (A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant submits that the order under section 201 (1) and 201 (1A) passed by the Assessing Officer beyond a period of one year from the end of the financial year in which proceedings under section 201 (1) were initiated was barred by limitation. The Appellant submits that even if no period of limitation is prescribed, the statutory powers must be exercised within a reasonable time. 2. Without prejudice to what stated above, the appellant submit that the order under sections 201 (1) and 201 (1A) passed by the Assessing beyond a period of four years from the end of financial was barred by limitation. The Appellant submits that even if no period of limitation is prescribed, the statutory powers must be exercised within a reasonable time. 3. (a) The appellant submits that the learned Commissioner of Income Tax (Appeals) erred in upholding the action of the learned Tax Recovery Officer (hereinafter referred to as the Assessing Officer) that payment for pay channel cost amounting to ₹ 69,55,258/- made to distributor of signal is a contract for work and liable for deduction under section 194C of the Act and accordingly erred in holding that the assessee is an assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee Company and Sh. Shyam PV, director of the assessee company stating the reason for delay in filing the present appeal. In the light of the said application the Ld. counsel for the assessee submitted before us that the impugned order passed by the Ld. CIT(A) was received in July, 2014. In May, 2016, while going through the files of assessment year 2001-02, it was noticed that the impugned order has already been received in July, 2014. Since during the period between July, 2014 to May, 2016 it went un-noticed that the appellate order has already been received, the present appeal could not be filed within the limitation period. This order was received by Sh. Pravin Kadam, Deputy Manager Taxation, who was working from 603, Hyde Park, Saki Vihar Road Andheri (E) during the period July 2014. The Ld. counsel further pointed out that Sh. Pravin Kadam has stated in his affidavit that inadvertently he did not forward the same to the registered office of the company and it was misplaced. The Ld. counsel further pointed out that the Mumbai Bench of the Tribunal has condoned the delay of 658 days in filing appeal against the appellate order passed by the Ld. CIT(A) confirming the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee, were already assailed by the assessee before the Income Tax Appellate Tribunal. That it is stated by the deponent that immediately on learning of the aforesaid order of the CIT(A) for AY: 2003-04, the counsel of the assessee was approached and briefed about the factual position. The assessee was informed by its counsel that the appeal involved a delay of 658 days. It is stated by the assessee that the aforesaid delay in filing of the appeal for the year under consideration, viz. A.Y 2003-04 with the Tribunal had occasioned on account of an inadvertent omission on the part of a member of the staff. It is stated by the deponent that in the backdrop of the facts leading to the delay in filing of the present appeal, the same in all fairness may be condoned, failing which a meritorious matter would be dismissed on account of technicalities. 7. That during the course of hearing of the aforesaid application seeking condonation of delay, it was submitted by the ld. Authorized Representative (for short A.R ) for the assessee that the delay involved in filing of the present appeal had crept in absolutely on account of a bonafide mistake on the part of the Mr. Pravin Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8223;ble Supreme Court in the case of Ramnath Sao (supra) was misconceived, as the said judgment was passed in the case of an individual, while for the present assessee was a private limited company which had at its disposal the assistance of the Chartered Accountants/ Lawyers. It was averred by the ld. D.R that the inordinate delay of 658 days in filing of the present appeal could not be said to be bonafide in nature, as it was beyond comprehension that as to how the assessee remained unaware of the order of the CIT(A) for such a long period. It was submitted by the ld. D.R that as the application filed by the assessee for condonation of delay did not merit acceptance, therefore, the appeal of the assessee was liable to be dismissed on the said count itself. The ld. A.R in his rejoinder submitted that the material fact which would prove the bonafides of the assessee as regards the delay involved in filing of the present appeal, could safely be gathered from the fact that on the same issue involved in the present appeal, the appeals of the assessee for the immediately two preceding years, viz. A.Y(s) 2001-02 and 2002-03 were already pending disposal before the Income Tax Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a sufficient cause for the purpose of condonation of delay should be interpreted with a view to do even ended justice on merits in preference to an approach which scuttles a decision on merits. We are not persuaded to be in agreement with the view of the ld. D.R that as the case before the Hon ble Supreme Court in the case of Ramnath Sao (supra) was that of an individual unlike that of the assessee which is case of a company having the advantage of assistance of the professionals, therefore, the same would not come to the assistance of the assessee. We are of the considered view that the revenue while raising the said contention had lost sight of the reason leading to the delay filing of the present appeal. The delay as explained by the assessee had admittedly occasioned on account of failure on the part of an individual employee to deliver the order passed by the CIT(A) to the Chartered Accountant. We are of the considered view that as the assessee had came forth with a bonafide explanation as regards the delay in filing of the appeal before us, therefore, the same merits acceptance on our part. We may herein observe that the ld. D.R had failed to place on record any material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon‟ble High Court had held that even though Sec. 201 does not prescribe any limitation period for an assessee to be declared as an assessee in default, yet the revenue is required to exercise the powers in that regard within a reasonable time. The Hon ble High Court in the backdrop of its aforesaid observations had upheld the order of the Tribunal by observing as under: 30 Our attention has also been invited to two judgments of the Honourable Delhi High Court which are on the same principle and as to whether in the absence of any time limit the proceedings under Sections 201 and 201(1A) of the Income Tax Act, 1961 could be initiated at any Income Tax v/s NHK Japan Broadcasting Corporation reported in (2008) 305 ITR 137 (Delhi), the Delhi High Court upheld the view of the Tribunal and dismissed the Revenue's Appeal [Commissioner of Income Tax v/s Hutchison Essar Telecome Ltd. reported in (2010) 323 ITR 230 (Delhi)]. 31 In the case of NHK Japan Broadcasting Corporation (supra), the Honourable Mr. Justice Madan b. Lokur (as His Lordship then was) speaking for the Bench answered the question directly posed before us in the following terms: There is no dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs by exercise of jurisdiction by the statutory authority. The Supreme Court held that exercise of jurisdiction must be within a reasonable period of time and considering the provisions of the Punjab General Sales Tax Act, 1948, it was held that a reasonable period of time for initiating proceedings would be five years. There is a qualitative difference between Bharat Steel Tubes Ltd. [1988] 70 STC 122 (SC) and Bhatinda District Coop. Milk Producers Union Ltd. (2007) 9 RC 637 : 11 SCC 363. In the former case, the question pertained to completion of proceedings, while in the latter case is pertained to initiation of proceedings. We are concerned with initiation of proceedings. Insofar as the Income Tax Act is concerned, our attention has been drawn to Section 153(1)(a) thereof which prescribes the time limit for completing the assessment, which is two years from the end of the assessment year in which the income was first assessable. It is well known that the assessment year follows the previous year and, therefore, the time limit would be three years from the end of the financial year. This seems to be a reasonable period as accepted under Section 153 of the Act, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ambit and scope of the proceedings under the special provision, namely, a Reference by the concerned workman under the Industrial Disputes Act, 1947. The judgment of the Honourable Supreme Court deals with a case where any provision in the nature of limitation or outer limit is prescribed for reference under the Industrial Disputes Act, 1947. The Honourable Supreme Court was not dealing with a case of exercise of powers enabling reopening of Assessment under the Income Tax Act, 1961 or any Taxing Statute. In fact, it was not deciding a case concerned with invoking of any suomotu powers or reopening of assessment finalized under the Tax Law. Therefore, this judgment is clearly distinguishable on facts. 33 If one carefully peruses Section 201(1) and 201(1A) of the Income Tax Act, 1961, then, the principle laid down in the Delhi High Court decisions in NHK Japan Broadcasting Corporation and Hutchison Essar Telecom (supra) would squarely apply. 34 The Section 201 of the Income Tax Act, 1961 reads as under: 201. Consequences of failure to deduct or pay: (1) Where any person, including the principal officer of a company, (a) who is required to deduct any sum in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sum credited to the account of a resident but is not deemed to be an assessee in default under the first proviso to subsection (1), the interest under clause (i) shall be payable from the date on which such tax was deductible to the date of furnishing of return of income by such resident.] (2) Where the tax has not been paid as aforesaid after it is deducted, the amount of the tax together with the amount of simple interest thereon referred to in sub section (1A) shall be a charge upon all the assets of the person, or the company, as the case may be, referred to in subsection (1). [(3) No order shall be made under subsection (1) deeming a person to be an assessee in default for failure to deduct the whole or any part of the tax from a person resident in India, at any time after the expiry of (i) two years from the end of the financial year in which the statement is filed in a case where the statement referred to in section 200 has been filed; (ii) [six years] from the end of the financial year in which payment is made or credit is given, in any other case: Provided that such order for a financial year commencing on or before the 1st day of April, 2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the aforementioned years, therefore, are of the considered view that the order passed by the A.O under Sec. 201(1A) as on 28.03.2011 being substantially beyond the period of one year from the end of the financial year in which the proceedings under Sec. 201(1)/201(1A) were initiated, therefore, the respective orders passed by the A.O U/ss. 201(1)/201(1A) are clearly barred by limitation. We thus in the backdrop of our aforesaid observations set aside the order of the CIT(A) and quash the order passed by the A.O U/ss. 201(1)/201A) of the Act. 11. In the present case, the Tax Recovery Officer passed the order u/s 201 and 201 (IA) of the Act on 28.03.2011, which is beyond the period of one year from the end of the financial year in which the proceedings were initiated as this appeal pertains to the assessment year 2001-02. We further notice that the coordinate Bench has quashed the impugned order by following the judgment of the Hon ble Bombay High Court in the case of Director of Income Tax (International taxation) vs. Mahindra and Mahindra Ltd. (2014) 635 ITR 560 (Bom). Since, the facts of the case pertaining to the A.Y. 2003-04 are identical to the facts of the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no question of any involvement of work . (c) The appellant submits that the payment made for procurement of signals are not to any broadcasters or telecasters and accordingly, the provisions of section 194C are not applicable and therefore no tax was required to be deducted at source. 4. (a) The learned Commissioner of Income Tax (Appeals) erred in upholding the action of the Assessing Officer of levying interest under section 201 (1A) of the Act amounting to ₹ 6,08,319/- on the ground that payment of interest is mandatory. (b) The learned Commissioner of Income Tax (Appeals) erred in law in holding that though the assessee should not be held to be an assessee in default, the appellant would be liable to interest under section 201 (1A) of the Act for the period commencing from the date on which tax was deducted to the date on which tax is actually paid. 5. The appellant submits that the Assessing Officer be directed: (i) Order under section 201 (1) and 201 (1A) passed beyond one year from the end of the financial year in which proceedings under section 201 (1) were initiated which is barred by limitation and same ought to be cancelled. (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X
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