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TMI Blog2019 (4) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... ing out of the orders of Commissioner of Income Tax (Appeals)-60, Mumbai [in short CIT(A)], in appeal No. 60/IT- 10160/DCIT/(TDS)-2(2)/2016-17 and No. 60/IT-10020/DCIT/(TDS)-2(2)/2016-17 dated 28.12.2018. The Assessments were framed by the DY. Commissioner of Income Tax (TDS)-2(2) dated 21.03.2016 under section 201(1)/201(1A) of the Income Tax Act, 1961 (hereinafter the Act ). 2. The first common issue in these two appeals of the assessee is against the order of the CIT(A) in holding that the order passed by the Assessing Officer under sect ion 201(1)/201(1A) of the Act is within the time limit allowed under sect ion 201(3) of the Act, For this, the assessee has raised the following three grounds for the assessment year 2010-11: 1. The Learned Commissioner of Income-Tax [Appeals} erred in holding that the Order passed under Section 201/201[1A} of Income-Tax Act, 1961 (the Act ) was within the time limit allowed under sub-section [3) to Section 201 of the Act. 2. On an identical position in facts and in law and in the circumstances, the Learned Commissioner of Income-Tan (Appeals) erred in not following the judgement of the ITAT, J Bench, Mumbai in case of the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in default for failure to deduct TDS under section 194C of the Act on the reimbursement of vouchers to various affiliates during the financial year 2010-11. In response to show cause notice, the assessee replied that the notice issued by Assessing Officer for financial year 2009-10 relevant to assessment year 2010-11 is barred by limitation but the Assessing Officer passed order under section 201(1)/201(1A) of the Act. Aggrieved, the assessee preferred appeal before the CIT(A). 6. Before the CIT(A), the assessee claimed that the issue under appeal is squarely covered by the decision of the Tribunal in assessee s own case for the assessment year 2012-13 in ITA No.980/Mum/2018 order dated 28.03.2018 but the CIT(A) noted that the assessee has filed correction statements even on 31.01.2018 and in view of the provisions of section 201(3), the time limit available with the Assessing Officer is seven years in terms of amendment carried out by the Finance Act (No.2), 2014 with effect from 01.10.2014 under the provisions of section 201(3) of the Act. The CIT(A) stated that the facts in assessment year 2012-13 and the relevant assessment year 2010-11 are different and distinguishable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iny if required All the operational sections as per legal provisions will be applied de novo on this correction statement Hence, for all purposes, the correction statement fled is as good as and equivalent to a statement filed u/s 200(3) of the Act. 6.3 The appellant s contention is that this proviso is effective from 01/10/2014 and thus does not apply to the return of the Assessment Year under consideration. It is the appellant's case, since it is effective from 01/10/2014, no correction returns can be filed for the prior year s However, it is seen that the appellant himself has filed not one but multiple correction returns for this year which was accepted by the CPC TDS and was also processed. The details of all such statements tiled u/s 200{3) are as follows . Sr No Financial Year Quarter Form Type Date of filing Remarks 1 2009-10 Q1 26Q 15-07-2009 REGULAR 2 2009-10 O2 26Q 14-10-2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt filed u/s 200(3) In all such cases the statements / correction statements are liable to be processed and scrutinized. In fact, all the proceedings on such correction statements filed will take place subsequently as is normally taken in cases where the original statement are filed. 6.5 On a comparative logic, the returns filed u/s 139 is compared with statements filed u/s 200(3) In case of returns of income filed u/s 139, there is a definite period after which it cannot be revised / filed There is a time barring period presented for filing a return u/s 139. After expiry of the prescribed date as per law, it is the responsibility of the AO to issue a notice u/s 146 calling for return of income. However, the situation is different in the case of filing of statements u/s 200(3). Though there is a limitation lime for passing assessment orders on statements filed as per sec 201(3). There is no bar on filing of correction statements u/s 200(3) In that event, it is obvious that the lime available to finalize a Statement will be reckoned from the date on which the recent statement has been filed under section 200{3) The natural legal logic will be that when a correction statement is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the impugned order for this year is covered by the order of the Hon'ble Tribunal is misplaced The assessee has last filed the last correction statement on 30/01/2016 and thus, the impugned order dated 21.3.2016 by the AO is not time barred. Aggrieved, now the assessee is in appeal before the Tribunal. 7. We have heard the rival contentions and gone through the facts and circumstances of the case. Before us, ld Counsel for the assessee Shri F.B. Andhyarujina, Sr. Counsel argued that the impugned proceedings initiated and consequent order passed under section 201(1)/201(1A) of the Act is time barred for the financial year 2009-10 relevant to assessment year 2010-2011 in view of section 201(3) of the Act as it stood at the relevant time. Ld Sr. Counsel before us, explained that the assessee has been regularly filing TDS statements as provided under section 200(3) of the Act and for the financial year 2009-2010 relevant to A.Y.2010-2011 TDS statements under section 200(3) were filed on the following dates: Fin. Year Quarter Date of f iling 2010-11 Qr.1 15.7.2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o orders which had become lime-barred under the old lime limit ( 2 years / 6 years ) set by the un-amended section 201(3). Hence, no order under section 201(1) of the Act, deeming the tax-deductor to be assessee-indefault could be passed, if limitation had already expired as on 1.10.2014. ln the present case, Sodexo has been filing the requisite TDS statements referred to in section 200 of the Act Therefore, clause (i) of erstwhile section 201 (3) will apply in the present case. 9. Ld Counsel for the assessee took us through the erstwhile sub-section (3) of section 201 which was substituted by the Finance (No.2) Act 2014 w. e. f 01.10.2014 and prior to this substitution sub-section(3) as amended by Finance (No.2) Act, 2012 with effect from 01.04.2010 reads as under: :3. No order shall be made under sub-section(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 fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 64the fact that wherever legislature wanted to give retrospective effect so specifically provided while amending section 201(3) (ii) of the Act as was amended by Finance Act, 2012 with retrospective effect from 1/4/2010, it is to be held that section 201(3), as amended by Finance Act No.2 of 2014 shall not be applicable retrospectively and therefore, no order under section 201(i) of the Act can be passed for which limitation had already expired prior to amended section 201(3) as amended by Finance Act No.2 of 2014. Under the circumstances, the impugned notices / summonses cannot be sustained and the same deserve to be quashed and set aside and writ of prohibition, as prayed for, deserves to be granted. 16.. In view of the above and for the reasons stated above, all these petitions succeed. The impugned notices / summonses are held to be invalid and the same are hereby quashed and set aside and the respondents herein are hereby restrained by writ of prohibition from proceedings with the impugned notices / summonses which are, as such, hereby quashed and set aside. Rule is made absolute accordingly in each of the petitions. In the facts and circumstances of the case, there shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in the case of Bhura Exports Ltd vs ITO, (2011) 13 taxmann.com 162(Calcutta) also relates to assessment year 2002-03 and also prior to amendment. We find that the first amendment bringing time limitation in the statute book was brought out by the Finance (No.2) Act 2012 with effect from 01.04.2010 and that also the condition of two years or six years as per the provisions of section 201(3)(ii) of the Act. Subsequently, the erstwhile sub-section(3) of section 201 was substituted by Finance (No.2) Act, 2014 w. e. f. 01.10.2014, wherein, sub-section(3) of section 201 was amended and time limitation of seven years from the end of the financial years in which the payment is made was brought in. The facts of the present case are that the assessee filed quarterly returns for F.Y. 2010-11 on 15.07.2010. For Qr. No.. on 13.10.2010. At this point of time, the erstwhile sub-section (3) of section 201 of the Act was enforced and as per section 201(3)(ii) of the Act, the condition of two years was applicable to the facts of the present case and hence, on the date of amendment i.e. amendment of sub-section(3) of section 201 by the Finance (No.2) Act 2014 with effect from 01.10.2014 has alread ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f substantial time in the absence of a time limit, the legislature through Finance Act, 2009, introduced sub section (3) to section 201 providing limitation period of two years for passing the order under section 201(1) from the end of the financial year in which statement of TDS is filed by the deductor and in a case where no statement is filed the limitation was extended to before expiry of four years from the end of financial year in which the payment was made or credit given. The aforesaid amendment was made effective from 1st April 2010. Subsequently, by Finance Act, 2012, sub section (3) of section 201 was again amended with retrospective effect from 1st April 2010. The aforesaid amended provision reads as under: (3) No order shall be made under sub section (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by referring to the objects for making such amendment and on the reasoning that the said provision being a machinery provision will apply retrospectively. However, on a careful perusal of the objects for introduction of the amended provision of sub section (3), we do not find any material to hold that the legislature intended to bring such amendment with retrospective effect. If the legislature intended to apply the amended provision of sub section (3) retrospectively it would definitely have provided such retrospective effect expressing in clear terms while making such amendment. This view gets support from the fact that while amending sub section (3) of section 201 by Finance Act, 2012, by extending the period of limitation under sub clause (ii) to six years, the legislature has given it retrospective effect from 1st April 2010. 11 Sodexo SVC India Pvt. Ltd. Since, no such retrospective effect was given by the legislature while amending sub section (3) by Finance Act, 2014, it has to be construed that the legislature intended the amendment made to sub section (3) to take effect from 1st October 2014, only and not prior to that. The Hon'ble Supreme Court in Vatika Township Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospective effect so specifically provided while amending section 201(3) (ii) of the Act as was amended by Finance Act, 2012 with retrospective effect from 1/4/2010, it is to be held that section 201(3), as amended by Finance Act No.2 of 2014 shall not be applicable retrospectively and therefore, no order under section 201(i) of the Act can be passed for which limitation had already expired prior to amended section 201(3) as amended by Finance Act No.2 of 2014. Under the circumstances, the impugned notices / summonses cannot be sustained and the same deserve to be quashed and set aside and writ of prohibition, as prayed for, deserves to be granted. 10. Following the aforesaid decision of the Hon'ble Gujarat High Court in Troykaa Pharmaceuticals Ltd. (supra) again expressed the same view. 7. Examining the facts of the present case in the light of the principles enunciated in the above decision, the present case relates to financial year 2008-2009. The petitioner had filed statements as required under section 200 of the Act. The limitation for initiating proceedings under section 201(1) of the Act would, therefore, be governed by section 201(3)(i) of the Act as it sto ..... X X X X Extracts X X X X X X X X Extracts X X X X
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