Branch Manager, The Muzaffarpur Central Co,op. Bank Ltd, V. I.T.O. (TDS),

ITA 111/PAT/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93636 (ITAT-PATNA)
• Duration Of Justice: 2 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 13-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KR MISHRA J R S C
• Assessee Lawyers: SANJEEV KR ANWAR
• Keywords: Recovery proceedings
• Section: 201(1)

Judgement Text

, PATNA IN THE INCOME TAX APPELLATE TRIBUNAL , PATNA BENCH, PATNA . . , , BEFORE SHRI A.D. JAIN (JM) AND SHRI SANJAY ARORA (AM) ./ I.T. A. NO S . 111 TO 114 /PAT/201 2 ( / ASSESSMENT YEARS: 200 1 - 0 2 TO 200 4 - 0 5 ) BRANCH MANAGER , THE MUZAFFARPUR CENTRAL C O - OPERATIVE BANK LTD. , SADAR HOSPITAL ROAD, MUZAFFARPUR. / VS. IT O (TDS), MUZAFFARPUR - 842 001 ./ ./ PAN/GIR NO. : PTNB03037G ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SANJEEV KR. ANWAR, ADV. / RESPONDENT BY : S HRI. SUMAN KR. MISHRA, J R.S.C. / DATE OF HEAR ING : 2 2 /4/2015 / DATE OF PRONOUNCEMENT : 22 / 7 /2015 / O R D E R PER SANJAY ARORA, AM: THIS IS A SET OF FOUR A PPEAL S BY THE ASSESSEE ARISING OUT OF A COMMON O RDER DATED 29.05.2012 FOR THE ASSESSMENT YEAR S (A.Y S .) 2001 - 02 TO 200 4 - 0 5 (EVEN AS ONLY THE FIRST FOUR YEARS WERE POSTED FOR HEARING AND, ACCORDINGLY, HEARD) BY THE COMMISSIONER OF INCOME TAX (APPEALS) - I , PATNA (CIT(A) FOR SHORT) . THE SAME RAISING COMMON ISSUES, WERE HEARD TOGETHER , AND ARE BEING DISPOSED OF PER A COMMON, CONSOLIDATED ORDER, I.E., AS WAS THE CASE B Y THE FIRST APPELLATE AUTHORITY. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THERE WAS A SURVEY U/S.133A OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) AT THE ASSESSEES BUSINESS PREMISES ON 0 6.02.2008, 2 ITA NOS. 111 TO 114/PAT/2012 (A.YS. 2001 - 02 TO 200 4 - 0 5 ) BRANCH MANAGER, THE MUZAFFARPUR CENTRAL C O - OP . BANK LTD. VS.ITO (TDS) CONTINUING UP TO 07.02.20 08. IT WAS DURING THE COURSE THEREOF FOUND THAT TAX AT SOURCE HAD NOT BEEN , AS REQUIRED U/S.194A, DEDUCTED ON THE INTEREST CREDIT ED /PAID BY THE ASSESSEE TO THE S O ME DEPOSITORS, I.E., FOR THE RELEVANT YEARS. FORM 15H, I.E ., A DECLARATION BY THE DEPOSITOR THAT NO TAX IS PAYABLE IN RESPECT OF THE INTEREST ALLOWED, PRECLUD ING DEDUCTION OF TAX AT SOURCE (TDS) , HAD NOT BEEN OBTAINED FROM THE DEDUCTEES, NOR FILED, AS REQUIRED, WITH THE OFFICE OF THE CONCERNED C OMMISSIONER OF I NC OME T AX , MUCH LESS WITHIN THE TIME STIPULATED THERE - FOR. THERE WERE IN FACT SEVERAL DEFICIENCIES THEREIN, RENDERING THEM UNACCEPTABLE, VIZ. NOT DATED; NOT VERIFIED; DATE OF SUBMISSION NOT FILLED UP, ETC. HE, ACCORDINGLY, WORKED OUT THE ASSESSEES LIABILITY TOWARD TDS (U/S. 201(1)) AND TOWARD INTEREST FOR THE NON DEPOSIT OF THE TDS TO THE CREDIT OF THE CENTRAL GOVERNMENT ( U/S. 201(1A) ) , RECKONING THE LATTER FROM THE DAY FOLLOWING THE EXPIRY OF THE RELEVANT PREVIOUS YEAR TO JULY, 2008, I.E., AS UNDER , VIDE OR DER S U/S S .201(1) AND 201(1A) DATED 31.07.2008: F.Y. AMOUNT OF INTEREST CREDIT/PAID WHICHEVER IS EARLIER ( `) RATE OF TDS INCOME TAX DEDU C TIBLE AT SOURCE U/S.194A AMOUNT OF INTEREST U/S. 201(1A) PERIOD OF DEFAULT (MONTHS) FROM 1 ST APRIL TO JULY08 TOTAL AMO UNT 2000 - 01 5,22,985 10% 52,299 57,529 88 1 ST APRIL 01 1,09,828 2001 - 02 6,96,021 10 69,602 66,122 76 1 ST APRIL 02 1,35,724 2002 - 03 8,95,621 10 89,562 58,663 64 1 ST APRIL 03 1,48,225 2003 - 04 8,21,243 10 82,124 42,704 52 1 ST APRIL 04 1,24,828 TOTAL 2,93,587 2,25,018 5,18,605 THE LD. CIT(A), IN APPEAL, HELD THAT THERE IS NO BAR IN TERMS OF TIME LIMIT FOR THE LEVY OF TAX U/S.201(1) OR FOR THE CHARGE OF INTEREST U/S.201(1A) UNDER THE ACT. IMPOSING A TIME LIMIT OF FOUR YEARS OR SIX YEARS, AS HA D BEEN DONE BY THE T RIBUNAL OR THE HONBLE HIGH COURTS PER THE SEVERAL DECISIONS CITED BEFORE HIM, WOULD NOT BE PROPER CONSIDERING THAT THE LAW HAD CAST A SPECIFIC OBLIGATION ON THE PAYER OF INCOME AND , FURTHER, CONSCIOUSLY NOT PROVIDED FOR ANY TIME LIMIT IN ITS RESPECT. HE, ACCORDINGLY, HELD AS UNDER: - AFTER CONSIDERING THE FACTS, IT IS. OBSERVED THAT IN THE CASE OF CIT VS M/S ELL LILLY AND COMPANY (INDIA) (P) LTD ., 178 TAXMAN 505, THE APEX COURT HAS OBSERVED THAT SUB - SECTION 1 AND SUB - SECTION 1 A OF SECTI ON 201 OF THE I.T. ACT, OPERATE IN INDEPENDENT SPHERES AND ONE IS NOT DEPENDENT 3 ITA NOS. 111 TO 114/PAT/2012 (A.YS. 2001 - 02 TO 200 4 - 0 5 ) BRANCH MANAGER, THE MUZAFFARPUR CENTRAL C O - OP . BANK LTD. VS.ITO (TDS) UPON THE OTHER I.E. PROVISIONS OF ONE SUB SECTION CAN BE APPLIED IRRESPECTIVE OF THE OTHER SUB SECTION. IN VIEW OF THIS DECISION AND DECISION IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE 293 ITR 226 (SUPREME COURT), IT IS DIRECTED THAT DEMAND OF TAX SHALL NOT BE RAISED AGAINST THE APPELLANT IN THOSE CASES WHERE THE APPELLANT FURNISHES INFORMATION BEFORE THE A.D. REGARDING FILING OF RETURNS AND PAYMENTS OF TAXES BY SUCH DEDUCTEES. THE A.D. SHALL NOT HOLD THE APPELLANT AS ASSESSEE IN DEFAULT IN RESPECT OF PAYMENTS MADE TO THESE CONCERNS OR DISCOUNTS ALLOWED IN RESPECT OF TAX REQUIRED TO BE DEDUCTED. HOWEVER, INTEREST UNDER SECTION 201( 1 A) OF THE I.T. ACT, 1961 SHALL BE CHAR G ED FROM THE DUE DATE OF PAYMENT OF TDS TILL THE DATE OF PAYMENTS OF TAXES BY SUCH DEDUCT O RS/DATE OF FILING OF RETURNS BY SUCH DEDUCTEES. ACCORDINGLY, THIS GROUND OF THE APPEAL OF THE APPELLANT IS PARTLY ALLOWED AS ABOVE. 3. BEFORE US, THE ASSESSEE CITED DECISION S BY THE HONBLE HIGH COURT, AS UNDER, WHILE THE REVENUE RELIED ON THE DECISION IN CIT VS. H. M. T. LTD. [2012] 340 ITR 219 (P & H), BOTH THE PARTIES LIMITING THEIR ARGUMENTS TO THE LEGAL ISSUE OF THE APPLICATION OR OTHERWISE OF THE TIME LIMIT FOR FRAMING A SSESSMENT , I.E., FOR WANT OF A MORE APPROPRIATE WORD, U/ S S. 201(1) AND 201(1A) , I.E., IN TERMS OF A REASONABLE PERIOD, CONSIDERING THAT NO TIME LIMIT HAD BEEN PROVIDED BY THE STATUTE : I. CIT VS. NHK JAPAN BROADCASTING CORPORATION LTD. [2008] 305 ITR 137 (DE L); II. CIT VS. HUTCHISON ESSAR TELECOM LTD. [2010] 323 ITR 230 (DEL.); AND III. CIT VS. SUTLEJ J AL VIDYUT NIGAM LTD. [2012] 345 ITR 552 (HP). ON THE B ENCH SPECIFICALLY REQUIRING THE PARTIES TO SPELL OUT THE DIFFERENCE BETWEEN THE TWO SET OF DECISIONS, BOTH REN DER ED RELYING ON THE DECISION S BY THE HONBLE A PEX C OURT, IT WAS POINTED OUT BY THEM THAT THE DECISION IN H. M. T. LTD. (SUPRA) WAS FOLLOWING THE DECISION IN HINDUSTAN TIMES LTD . VS. UNION OF INDIA [1998] AIR 1998 SC 688 , WHICH IS QUA RECOVERY UNDER THE E MPLOYE E S P ROVIDENT F UND, WHILE THE DECISIONS IN FAVOUR OF THE ASSESSEE ARE BASED ON THE DECISION S RENDERED UNDER THE TAXING STATUTE S . THE BENCH, AT THIS STAGE, POINTED OUT THAT THE RELEVANT PROVISIONS FALL UNDER CHAPTER XVII OF THE ACT, TITLED C OLLECTION AND R ECOVERY OF TAX . FURTHER, THE VERY FACT THAT THE HONBLE COURTS HAD 4 ITA NOS. 111 TO 114/PAT/2012 (A.YS. 2001 - 02 TO 200 4 - 0 5 ) BRANCH MANAGER, THE MUZAFFARPUR CENTRAL C O - OP . BANK LTD. VS.ITO (TDS) APPLIED THESE DECISIONS IN THE CONTEXT OF TIME LIMIT FOR INITIATING PROCEEDINGS U/SS. 201(1) AND 201(1A) UNDER THE ACT , ITSELF IMPLIES THE APPLICABILITY OF THE PRINCIPLES INVOLVED. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD, GIVING OUR CAREFUL CONSIDERATION TO THE MATTER. 4.1 WE MAY, AT THE OUTSET , CLARIFY THAT THE REVENUE HAD ALSO FILED APPEALS FOR THE RELEVANT YEARS AGAINST THE IMPUGNED ORDER (IN ITA NOS. 121 T O 124/PAT/2012) , WHICH STAND DECIDED BY US VIDE ORDER DATED 24.04.2015 (COPY ON RECORD). THIS , THOUGH ADMITTEDLY NOT THE PROPER COURSE, SO THAT CROSS APPEALS OUGHT TO HAVE BEEN HEARD TOGETHER, WE MAY EMPHATICALLY CLARIFY IS DUE TO THE FACTUM OF THESE BEING CROSS APPEALS BEING NOT BROUGHT TO THE NOTICE OF THE BENCH DURING HEARING. THE TRIBUNAL DECIDED THE MATTER; THE REVENUE CHALLENGING THE DECISION BY THE LD. CIT(A) ON MERITS; THUS: 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIA L AVAILABLE ON RECORD, WE FIND THE ORDER OF THE ID CIT(A) TO BE ON ALL FOURS INASMUCH AS WHILE ISSUING THESE DIRECTIONS, THE ID CIT(A) HAS FOLLOWED THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE , 293 ITR 22 6 (SC) AN D THAT IN THE CASE OF CIT VS. LLI LILLY AND COMPANY (INDIA) (P) LTD. , 178 TAXMAN (SC) 505. THE HON'BLE SUPREME COURT HAS HELD THAT SECTIONS 201 (1) AND 201( 1 A) OF THE I.T. ACT, 1961 OPERATE IN INDEPENDENT SPHERES AND THE ONE IS NOT DEPENDANT UPON THE OTH ER AND THE PROVISIONS OF ONE SUB - SECTION CAN BE APPLIED IRRESPECTIVE OF THE OTHER SUB - SECTION. IT IS THIS LAW, AS SETTLED BY THE HON BLE S UPREME COURT, WHICH STANDS IRREFUTED BY THE DEPARTMENT. THEREFORE, TH E GRIEVANCE OF THE DEPARTMENT IS REJECTED AND THE ORDER OF THE L D . CIT(A) IS CONFIRMED. 7. OUR ABOVE OBSERVATIONS SHALL APPLY EQUAL TO ALL OTHER CASES, THE FACTS AND CIRCUMSTANCES IN ALL THESE CASES BEING, MUTATIS MUTANDIS, IN PARIMATERIA. THE DECISION BY THE TRIBUNAL, AS CAN THUS BE READILY SEEN, I S ON THE MERITS OF THE IMPUGNED DEMAND , RAIS ED PER ORDERS U/ S S . 201(1) AND 201(1A). I T WAS, THEREFORE, ALL THE MORE INCUMBENT ON THE PARTIES, PARTICULARLY THE ASSESSEE, WHO HAD PREFERRED APPEALS BEFORE THE TRIBUNAL RAISING A LEGAL ISSUE, TO HAVE BROUGHT TH E FACT OF IT BEING IN APPEAL TO THE NOTICE OF THE BENCH, AS THE DEMAND/S UNDER REFERENCE WOULD NOT SURVIVE IF THE ORDERS, 5 ITA NOS. 111 TO 114/PAT/2012 (A.YS. 2001 - 02 TO 200 4 - 0 5 ) BRANCH MANAGER, THE MUZAFFARPUR CENTRAL C O - OP . BANK LTD. VS.ITO (TDS) IN PURSUANCE TO WHICH IT IS MADE, ARE HELD AS TIME BARRED, AS CONTENDE D AND, THUS, LEGALLY NOT VALID. 4.2 WE SHALL BEGIN BY REVI EW ING THE JUDICIAL PR ECEDENTS, WITH A VIEW TO ASCERTAIN OR CUL L OUT THE IR RATIO OR THE LEGAL PR INCIPLE/S UNDERLYING THE SAME. THIS IS AS THE APPLICABILITY OR OTHERWISE OF A PARTICULAR DECISION COULD BE DETERMINED ONLY AFTER ASCERTAINING ITS RATIO, WHICH ALONE HAS PRECEDENT VALUE. THIS IS PARTICULARLY CONSIDERING THAT THE DECISIONS RELIED UPON ARE BASED ON THE DECISIONS BY THE A PEX C OURT. FURTHER, WHERE FACED WITH CONTRARY DECISIONS BY THE HONBLE HIGH COURTS , NONE OF WHICH IS BY THE JURISDICTIONAL HIGH COURT, T HE TRIBUNAL IS BOUND TO ACT IN ACCORDANCE WITH ITS JUDICIAL C ONSCIOUS [ CIT VS. THAN A ELECT RICITY SUPPLY LTD. [1994] 206 ITR 727 (BOM) AND MAHINDRA & MAHINDRA LTD. VS. DCIT [2009] 313 ITR (AT) 263 (MUM)(SB)] . 4.3 WE MAY SPELL OUT THE RATIO OF THE CITED D ECISION S , AS UNDER: ( 1) NHK JAPAN BROADCASTING CORPORATION LTD. (SUPRA): A) T HE CONCEPT (OR DATE) OF KNOWLEDGE (BY THE DEPARTMENT) CANNOT BE IMPORTED UNDER THE SCHEME OF THE ACT , AND IS OF NO CONSEQUENCE; B) T HE A DMISSION OF LIABILITY DOES NOT RESTORE LEGAL ITY TO T HE PROCEEDINGS OR CONFER JURISDICTION, WHICH HAS TO BE AS PER THE LAW. IT CANNOT , AT ANY RATE , PUT THE ASSESSEE IN A CONDITION WORSE THAN HE WOULD BE IF HE HAD CHOSEN TO CONTEST THE LIABILITY; C) F OR THE PURPOSE OF SECTIONS 201(1) AND 201(1A), IT IS THE DATE OF THE INITIATION OF THE PROCEEDINGS, OR THE EXERCISE OF THE JURISDICTION , THAT IS RELEVANT, AND NOT OF COMPLETION OF THE SAID PROCEEDINGS, SO THAT THE DECISION IN THE CASE OF BHARAT STEEL TUBES LTD. VS. STATE OF HARYANA [1988] 70 STC 122 (SC) , WHICH IS I N RESPECT OF COMPLETION OF ASSESSMENT UNDER THE PUNJAB GENERAL SALES TAX ACT, 1948/ HARYANA GENERAL SALES TAX ACT, 1973, WHICH DOES NOT PRESCRIBE ANY TIME LIMITATION FOR THE PURPOSE, WOULD NOT APPLY ; D) A REASONABLE TIME PERIOD, WHICH THEREFORE OUGHT TO O P E R A T E , IN - AS - MUCH AS THE LIABILITY CANNOT BE ALLOWED TO HANG ON THE HEAD FOR ALL THE TIME, IS TO BE PRESCRIBED CONSIDERING THE PROVISIONS OF THE RELEVANT ACT, I.E., THE NATURE OF THE ST A T UTE , THE R IGHTS AND LIABILIT IES THERE - UNDER AND OTHER RELEVANT FACTORS, AS 6 ITA NOS. 111 TO 114/PAT/2012 (A.YS. 2001 - 02 TO 200 4 - 0 5 ) BRANCH MANAGER, THE MUZAFFARPUR CENTRAL C O - OP . BANK LTD. VS.ITO (TDS) HELD BY THE A PEX C OURT IN STATE OF PUNJAB VS. BHATINDA DISTRICT CO - OP. MILK P RODUCER UNION LTD. [2007] 9 RC 637 (11 SC 363) . THE HONBLE HIGH COURT, ACCORDINGLY, UPHELD A TIME LIMIT OF FOUR YEARS, I.E., AS STIPULATED BY THE TRIBUNAL, EVEN AS IN ITS V IEW A PERIOD OF THREE YEARS (FROM THE END OF THE RELEVANT PREVIOUS YEAR), WAS A REASONABLE PERIOD. (2) HUTCHISON ESSAR TELECOM LTD. (SUPRA) AND SUTLEJ J AL VIDYUT NIGAM LTD. (SUPRA): THE HONBLE HIGH COURT S, PER THESE DECISIONS , ENDORSE D , FOLLOWING THE DE CISION IN NHK JAPAN BROADCASTING CORPORATION LTD. (SUPRA) , THE CONCEPT OF EXERCISE OF THE STATUTORY POWER WITHIN A REASONABLE PERIOD, I.E., AS ADVOCATED BY THE A PEX C OURT IN BHATINDA DISTRICT CO - OP. MILK PRODUCER UNION LTD. (SUPRA). (3) H. M. T. LTD. (SUPR A): APPLYING THE PRINCIPLES LAID DOWN IN HINDUSTAN TIMES LTD. (SUPRA), THE HONBLE HIGH COURT HELD THAT THE DELAY AND LACHES CANNOT ANNUL THE PROCEEDINGS WHERE NO TIME LIMITATION IN THEIR RESPECT WAS C ONSCIOUSLY PROVIDED BY THE ACT, NOTING OMISSION OF SEC TION 231 OF THE ACT, WHICH SPECIFICALLY PROVIDE D FOR A TIME LIMIT FOR THE COMMENCEMENT OF THE RECOVERY PROCEEDINGS UND ER CHAPTER XVII OF THE ACT (BY D IRECT T AX LAW S (AMENDMENT) ACT, 1987, W.E.F. 01.04.1989 ) . SUPPORT WAS ALSO DRAWN BY IT FROM THE OTHER DECI SIONS BY THE A PEX C OURT. THE DEMAND RAISE D IN THE CASE OF HINDUSTAN TIMES LTD. CASE (SUPRA) WAS QUA THE E MPLOYEES P ROVIDENT F UND (EPF) , FOR WHICH NO TIME LIMIT HAS C ONSCIOUSLY BEEN PROVIDED BY LAW, EVEN AS THE L EGISLATURE HAD, IT WAS NOTED BY THE H ONBLE C OURT, MADE SEVERAL AMENDMENTS TO THE EMPLOYEES PROVIDENT FUND A ND MISCELLANEOUS PROVISIONS ACT, 1952 OVER A PERIOD OF 30 YEARS (REFER PG. 222 OF THE REPORTS). THERE WAS, ACCORDINGLY, NO TIME LIMITATION FOR RECOVERY OF ARREARS. THE RECOVERY IS NOT BY SUIT, SO THAT THE PROVISIONS OF THE INDIAN LIMITATION ACT, 1963 ARE NOT ATTRACTED. THE DEFAULTER HELD THE FUNDS IN TR U ST, WHICH ARE DUE TO A TRUST FUND. THE LEGAL PRINCIPLE S IN THE MATTER ARE , TH US , AS CAN BE READILY SEEN, STATED BY THE A PEX C OURT IN BHAR AT STEEL TUBES LTD. (SUPRA); BHATINDA DISTRICT CO - OP. MILK PRODUCER UNION LTD. (SUPRA); AND HINDUSTAN TIMES LTD . (SUPRA) . A REASONABLE PERIOD SHALL GOVERN THE EXERCISE OF THE STATUTORY POWER. WHAT IS REASONABLE WOULD DEPEND ON THE FACTS OF THE CASE, WHICH HAS BEEN FURTHER CLARIFIED AS DEPENDING UPON THE NATURE OF THE STATUTE, THE 7 ITA NOS. 111 TO 114/PAT/2012 (A.YS. 2001 - 02 TO 200 4 - 0 5 ) BRANCH MANAGER, THE MUZAFFARPUR CENTRAL C O - OP . BANK LTD. VS.ITO (TDS) RIGHTS AND LIABILITIES THERE - UNDER, AND OTHER RELEVANT FACTORS. THE L EGISLATURE HAS HOWEVER C ONSCIOUSLY OMITTED SECTION 231, WHICH SPECIFICALLY PROVIDE D FOR A TIME PERIOD FOR THE COMMENCEMENT OF RECOVERY PROCEEDINGS , SO THAT THERE IS A C ONSCIOUS ATTEMPT ON ITS PART TO REMOVE ANY LEGAL BAR AS TO TIME , AND WHICH THEREFORE HAS TO BE RES P EC TED. THE SAID REMOVAL, OR THE ABSENCE OF THE PROVISION STIPULAT ING A TIME LIMIT FOR THE PERIOD OF RECOVERY, I.E., THE COMMENCEMENT OF RECOVERY PROCEEDINGS UNDER THE ACT, IS , THUS, IN AGREEMENT WITH THE CLEAR AND SETTLED PRINCIPLE OF LAW ENUNCIATED BY THE A PEX C OURT PER ITS VARIOUS DECISIONS REFERRED TO IN HMT LTD. (SUPRA) , INCLUDING AND NOT LIMITED TO HINDUSTAN TIMES LTD. (SUPRA) . EVEN OTHERWISE, THE PRINCIPLE OF CASUS OMISS US CANNOT BE L IGHTLY INFERRED, AS EXPLAIN ED IN , AMONG OTHERS, PADMASUNDARA RAO (DECD.) VS. STATE OF TAMIL NADU [2002] 255 ITR 147 (SC). CONTINUING FURTHER, AGAIN, WITHOUT DOUBT, TH E CHARGE OF TAX AND THE CRYSTALLIZATION OF THE TAX LIABILITY IN ITS RESPECT IS UPON OCCURRING OF THE TAXABLE EVENT , AND HAS NOTHING TO DO WITH I T S SUBSEQUENT ASSESSMENT FOLLOWING THE PRESCRIBED PROCEDURE, AS EXPLAINED BY THE HONBLE APEX COURT IN MA N Y A DE CISION , VIZ. CIT VS. SHE LLY PRODUCT S [2003] 261 ITR 367 (SC). THE CHARGE IN RESPECT OF TAX DEDUCTIB LE AT SOURCE IS ATTRACTED U/S.4(2) OF THE A CT, UPON OCCURRING OF THE TAXABLE EVENT, I.E., THE PAYMENT OR CREDIT, AS THE CASE MAY BE, OF ANY SUM SPECIFIED IN CHAPTER XVII - B ( S ECTIONS 194A TO 196D). T HE SAID CHARGE OF TAX WOULD, THUS, NOT ABATE WITH TIME, AND THE TAX DUE (WHICH BECOMES PAYABLE WITHIN A DEFINED PERIOD OF THE TAXABLE EVENT) , CANNOT BE HELD AS NOT PAYABLE OR RE COVER ABLE BY THE CENTRAL GOVERNMENT, T O WHOSE CREDIT THE SAME IS TO BE PAID, UPON NON ACTION BY IT TOWARD RECOVERY, I.E., FOR A PARTICULAR PERIOD OF TIME. IN OTHER WORDS, THE TAX LIABILITY ( QUA TDS) SHALL NOT GET EXTINGUISHED UPON LA PSE OF CERTAIN PERIOD OF TIME, WHICH MAY BE CONSIDERED AS RE ASONABLE . THERE IS NO DEBTOR - CREDITOR RELATIONSHIP BETWEEN THE S TATE AND THE SU BJECT QUA A TAX LIABILITY , FOR THE LIMITATION ACT TO APPLY, I.E., IN THE ABSENCE OF ANY PROVISION AS TO TIME LIMIT IN RESPECT OF A PARTICULAR SUM PER THE ACT ITSELF, WHICH , IN FACT, STANDS SPECIFICALLY REMOVED, AND WHICH POSITION HAS BEEN ALLOWED TO OBTAIN EVEN AFTER OVER TWO DECADES. NO TIME LIMITATION WOULD, THUS, ORDINARILY OBTAIN. THE R ECOVERY OF WHAT IS DUE OR STANDS CRYSTALLIZED COULD BE AFFECTED AT 8 ITA NOS. 111 TO 114/PAT/2012 (A.YS. 2001 - 02 TO 200 4 - 0 5 ) BRANCH MANAGER, THE MUZAFFARPUR CENTRAL C O - OP . BANK LTD. VS.ITO (TDS) ANY TIME , WHERE THERE I S NO TIME LIMIT STATUTORILY PROVIDED. THERE COULD, THUS, BE NO TIME LIMITATION, WHERE NONE STANDS PROVIDED, TOWARD RECOVERY AS PER TDS PROVISIONS UNDER CHAPTER XVII - B. SECTION 201(1), IT MAY BE APPRECIATED, IS NOT A CHARGING SECTION OR TOWARD A LEVY OF TAX WHICH IS IN THE INSTANT CASE PER SECTIONS 4(2) R/W SECTION 194A, BUT ONLY QUA ITS RECOVERY. AT THE SAME TIME, WE CANNOT BUT HEL P NOTICE THAT THE TDS LIABILITY OF THE DEDUCTOR, THOUGH RECOVERABLE FROM HIM AND IN RESPECT OF WHICH HE CAN BE, FOLLOWING THE DUE PROCESS OF LAW, DEEMED TO BE IN DEFAULT, IS NOT TO HIS OWN ACCOUNT, BUT I S ONLY TOWARD THE TAX LIABILITY OF THE DEDUCTEE , AND HAS TO BE NECESSARILY ADJUSTED AGAINST THE LATTERS TAX LIABILITY. THAT THE SAME IS WITHOUT PREJUDICE TO THE CHARGE OF TAX ON HIS (DEDUCTEE S) INCOME, WHO IS IN ANY CASE LIABLE TOWARD THE SAME AND OBLIGED THEREFORE TO MAKE DIRECT PAYMENT IN THE EVENT OF FAILURE TO DEDUCT AND / OR DEPOSIT TDS BY THE PAYER, IS P ATENT FROM THE COMBINED READING OF SECTIONS 4(1), 190 AND 191 OF THE ACT. THIS INTRODUCES A COMPLEXITY TO THE MATTER. THE TAX , UNDER ARTICLE 265 OF THE CONSTITUTION OF INDIA , CAN ONLY BE LEVIED OR RECOVERED UNDER THE AUTHORITY OF LAW. THE TAX IN THE FORM OF TDS, SO COLLECTED, IS THAT LEVIED ( BY LAW) ON THE DEDUCTEE. THAT IS, CO LLECTION OF TAX COULD ONLY BE OF THAT LEVIED, WHICH, WHERE OF TDS, IS OF ANOTHER, I.E., THE DEDUCTEE. COLLECTION OF TAX CAN EVEN OTHERWISE B E NEITHER I N VACUUM NOR INDEPENDENT OR DE HORS THAT LEVIED, I.E., IS RENDERED WITHOUT ANY LEGAL BASIS IN THE ABSENCE OF THE LAT T ER. THE CONCEPT OF KNOWLEDGE CANNOT BE EITHER A LIMITING OR A FACILITATION FACTOR, I.E., OF ANY RELEVANCE. WE, ACCORDINGLY, OBSERVE NO DICHOTOMY BETWEEN THE TWO DIFFERENT DECISIONS RELIED UPON BY THE OPPOSING SIDES, NOTWITHSTANDING THERE BEING PRESENTED AS SO BEFORE US. THE QUESTION, THEREFORE, BOILS DOWN TO AS TO WHICH OF THE TWO PRINCIPLES IS VALIDLY APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4.4 THE LEVY OF TAX UNDER THE ACT IS U/S.4 THEREOF. THE SAME REQUIRES DETERMINATION OF IN COME, WHICH IS TO BE IN TERMS OF THE RELEVANT PROVISIONS OF THE LAW, AND FOLLOWING THE PROCEDURE OF ASSESSMENT LAID DOWN UNDER CHAPTER XIV OF THE ACT. THE SAME , PER SECTION 9 ITA NOS. 111 TO 114/PAT/2012 (A.YS. 2001 - 02 TO 200 4 - 0 5 ) BRANCH MANAGER, THE MUZAFFARPUR CENTRAL C O - OP . BANK LTD. VS.ITO (TDS) 139, REQUIRES THE DEDUCTEE TO FURNISH THE RETURN OF INCOME , AND V IDE SECTION 140A T O PAY SELF - ASSESSMENT TAX ALONG WITH, RECKONING THE SAME BY TAKING INTO ACCOUNT ALL THE TAXES ALREADY PAID, INCLUDING THE TAX DEDUCTED AT SOURCE. THE ASSESSEES RETURN IS, THOUGH, NOT BINDING ON THE REVENUE, WHICH MAY SUBJECT IT TO VERIFICATION AND ASSESS HIS INCOME IN ACCORDANCE WITH THE LAW , FOLLOWING THE PRESCRIBED PROCEDURE. AS SUCH, IT IS ONLY WHERE THE DETERMINATION HAS , FOLLOWING THE SAID PROCEDURE, BEEN ALREADY MADE AND, FURTHER, FOUND PAYABLE, UPON CONSIDERING THE PAYMENT U/S. 140A , RAISING NOTICE O F DEMAND U/S. 156, WHICH OUTSTANDS FOR RECOVERY, THAT TDS TO THAT EXTENT, COULD BE COLLECTED OR RECOVERED BY THE REVENUE FROM THE DEDUCTOR, I.E., AT ANY TIME , ADJUSTING THE SAME AGAINST THE DEDUCTEES TAX LIABILITY (TO THAT EXTENT). THE REVENUE IS IN SUC H A CASE REQUIRED TO SHOW THAT SOME DETERMINED TAX IS PAYABLE BY THE DEDUCTEE ON INCOME ASSESSABLE FOR THE YEAR, TAX AT SOURCE ON WHICH HA S NOT BEEN DEDUCTED, OR AFTER DEDUCTION, PAID (ALSO SEE SECTION 199). THE INTEREST LIABILITY O N TD S , WHICH IS SOUGHT T O BE COLLECTED PER SECTION 201(1A) FOLLOWS , BEING COMPENSATORY, I.E., IS CONSEQUENTIAL OR CONCOMITANT . HOWEVER, WHERE THERE IS NO SUCH OUTSTANDING DEMAND, I.E., OF DETERMINED TAX LIABILITY OF THE DEDUCTEE, IT IS NOT POSSIBLE TO SUBSCRIBE TO THE VIEW THAT TDS COU LD BE COLLECTED OR RECOVERED AT ANY TIME, I.E., WITHOUT ANY TIME LIMITATION. THIS IS AS THE RECOVERY THROUGH TDS IS ONLY TOWARD THE DEDUCTEE S TAX LIABILITY, WHICH COULD BE RECOVERED ONLY UPON DETERMINATION FOLLOWING THE PROCESS OF LAW. THE LAW, PER SECTIO N 149, PROVIDES FOR A TIME LIMIT FOR THE ISSUE OF NOTICE U/S.148, TOWARD BRINGING ANY INCOME THAT HA S ESCAPED ASSESSMENT, TO TAX. THE SAME , FOR THE YEARS UNDER REFERENCE , IS S ET AT A MAXIMUM OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THIS, THEN, WOULD BECOME A REASONABLE PERIOD UP TO WHICH TAX RECOVERY PROCEEDINGS QUA TDS COULD BE INITIATED, I.E., WHERE THERE IS NO OUTSTANDING TAX DEMAND AGAINST THE DEDUCTEE FOR THE RELEVANT YEAR. THIS IS AS THE PROCEEDINGS IN THE CASE OF THE DEDUCTEE, AGAIN ST WHOSE TAX LIABILITY THE SAID TDS WOULD STAND TO BE ADJUSTED, COULD IN LAW BE INITIATED ONLY UP TO THAT TIME LIMIT. TWO, AS AFORE - DISCUSSED, I.E., THE TAX DEDUCTION IN THE CASE OF THE DEDUCTOR AND THE TAX LIABILITY IN THE CASE OF THE DEDUCTEE , ARE NOT IN DEPENDENT OF EACH OTHER AND, IN FACT, 10 ITA NOS. 111 TO 114/PAT/2012 (A.YS. 2001 - 02 TO 200 4 - 0 5 ) BRANCH MANAGER, THE MUZAFFARPUR CENTRAL C O - OP . BANK LTD. VS.ITO (TDS) GO HAND IN HAND. TAX COLLECTION/RECOVERY COULD ONLY BE OF THAT LEVIED/ L E V I ABLE . THE PRINCIPLE STANDS ALSO EXPLAINED AND IS WELL SETTLED PER THE DECISIONS BY THE A PEX C OURT, AS IN THE CASE OF HINDUSTA N COCA C OLA BEVERAG E P. LTD. VS. CIT [ 2007 ] 293 ITR 226 (SC) . HOWEVER, IT IS OPEN FOR THE DEDUCTOR TO EXHIBIT THAT, NOTWITHSTANDING TH E NON - DEDUCTION OF TAX AT SOURCE ON THE INCOME CHARGEABLE TO TAX FOR THE YEAR, THE SAME CAN YET NOT BE RECOVERED IN VIEW OF THE TAX ON THE RE LEVANT INCOME HAVING BEEN PAID OR OTHERWISE RECOVERED BY THE REVENUE. THAT IS, THOUGH THE ORDERS U/SS. 201(1) AND 201(1A) WOULD IN SUCH A CASE, I.E., INITIATION OF PROCEEDINGS IN ITS RESPECT WITHIN SIX YEARS FROM THE RELEVANT ASSESSMENT YEAR, IS VALID, ACT UAL RECOVER Y SHALL ABATE ON THE SATISFACTION OF THE TAX LIABILITY ON THE CORRESPONDING INCOME. DECISION 5. IN SUM, WE FIND THAT THERE IS NO CONTRADICTION AND, RATHER, SCOPE FOR APPLICATION OF BOTH THE SET OF DECISIONS RELIED UPON BY THE OPPOSING SIDES BE FORE US, I.E., DEPENDING ON THE FACTS OF THE CASE, PROVING, AS IT WERE, THE DICTA BY THE APEX COURT IN BHARAT STEEL TUBES LTD. (SUPRA) THAT IT ALL DEPENDS ON THE FACTS OF THE CASE AND, FURTHER, TOWARD WHICH THEREFORE THE SCHEME OF THE RELEVANT STATUTE, THE RIGHTS AND LIABILITIES THERE - UNDER AND OTHER RELEVANT FACTORS ARE TO BE CONSIDERED, AS EXPLAINED BY IT IN BHATINDA DISTRICT CO - OP. MILK PRODUCER UNION LTD. (SUPRA). ORDER U/S. 201(1) IS NOT TOWARD LEVY OF ANY TAX, BUT ONLY TOWARD ITS RECOVERY, WITH THE I NTEREST U/S. 201(1A) BEING, AS IS WELL SETTLED, COMPENSATORY. IN OUR VIEW, THEREFORE, WHERE THE TAX STANDS DETERMINED AND IS OUTSTANDING AGAINST THE DEDUCTEE, I.E., AGAINST WHOSE TAX LIABILITY THE TAX DEDUCTIBLE IS TO BE ADJUSTED, THE SAME IS ONLY A RECOVE RY OF THE TAX LEVIED AND NO TIME LIMIT, IN VIEW OF THE CONSCIOUS OMISSION OF ANY TIME LIMIT BEING PRESCRIBED IN ITS RESPECT BY THE ACT, WOULD OBTAIN. WHERE NOT SO, THE RECOVERY WOULD BE SUBJECT TO IT BEING INITIATED WITHIN A REASONABLE PERIOD WHICH, IN OUR VIEW, IS A PERIOD UP TO WHICH THE TAX COULD BE ASSESSED IN THE HANDS OF THE DEDUCTEE THE TAX DEDUCTIBLE BEING ONLY ON HIS BEHALF AND AGAINST HIS TAX LIABILITY. THE SAME, ACCORDINGLY, IS FIXED AT SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, I . E., UP T O 11 ITA NOS. 111 TO 114/PAT/2012 (A.YS. 2001 - 02 TO 200 4 - 0 5 ) BRANCH MANAGER, THE MUZAFFARPUR CENTRAL C O - OP . BANK LTD. VS.ITO (TDS) WHICH TIME ASSESSMENT PROCEEDINGS COULD UNDER LAW BE INITIATED AGAINST THE IMPUGNED INCOME. THE ASSESSEE IS THOUGH, AT ANY RATE, ENTITLED TO SHOW THAT NO TAX LIABILITY AGAINST THE CORRESPONDING INCOME IS OUTSTANDING, SO THAT THE TAX COULD NOT BE RECOVERED. THIS WOULD ALSO HARMONIZE THE TWO SETS OF DECISION. WE MAY, FURTHER, CLARIFY THAT WE HAVE CONSCIOUSLY LIMITED OUR DISCUSSION TO THE DECISIONS BY THE HIGHER COURTS OF LAW, IN PREFERENCE TO THAT BY THE TRIBUNAL, ALSO RELIED UPON BEFORE US, IN VIEW OF THE ISSUE BEING LEGAL, SO THAT THE FORMER WOULD IN ANY CASE PREVAIL. IN FACT, THE DECISIONS BY THE TRIBUNAL ARE IN TURN BASED ON THE DECISIONS BY THE HONBLE APEX COURT AND HIGH COURTS, WHICH STAND CONSIDERED AND REFERRED TO BY US. FURTHER, THE DECISIO N IN THE CASE OF STATE OF GUJARAT VS. PATIL RAGHAV NATHA [1969] 2 SCC 187, WHICH HAS ALSO BEEN RELIED UPON BY THE TRIBUNAL IN SOME CASES, STANDS ALSO CONSIDERED BY THE HONBLE HIGH COURT IN HMT LTD . (SUPRA). COMING BACK TO THE FACTS OF THE PRESENT CASE, THE REVENUE HAS NOT BROUGHT ON RECORD ANY OUTSTANDING DEMAND ON THE DEDUCTEE/S, SO THAT TIME LIMITATION OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR SHALL OBTAIN, I.E., FOR THE PURPOSE OF INITIATION OF RECOVERY PROCEEDINGS. FURTHER, FOR ALL TH E YEARS, THE PROCEEDINGS WERE INITIATED ON 15.02.2008, FOLLOWING A SURVEY U/S.133A CONCLUDING ON 07.02.2008, BY EXTENDING OPPORTUNITY TO THE ASSESSEE TO EXPLAIN ITS CASE QUA NON DEDUCTION OF TAX AT SOURCE, WHICH WAS IN FACT FOLLOWED BY SIMILAR OPPORTUNITY ON 22.02.2008, 27.02.2008, 03.03.2008 AND 07.03.2008 (REFER PARA 1 OF THE ORDER U/S.201(1) AND 201(1A) OF THE ACT DATED 31.07.2008 FOR ALL THE YEARS). THESE DATES FALL WITHIN A PERIOD OF SIX YEARS FROM THE END OF THE RELEVANT YEAR FOR ALL THE YEAR S UNDER R EFERENCE. ACCORDINGLY, NONE OF THE IMPUGNED INITIATION S SUFFERS FROM THE LEGAL INFIRMITY OF BEING BARRED BY TIME. T HE ASSESSEES CASE, ACCORDINGLY, FA I LS FOR ALL THE YEARS. ON THE MERITS OF THE DEMAND RAISED, ON WHICH NO ARGUMENTS WERE MADE AND, CONSEQUENT LY , NOT URGED OR RESPONDED TO BY THE OTHER SIDE AS WELL, THE MATTER STANDS SQUA R E LY COVERED BY THE DECISION BY THE CO - ORDINATE BENCH IN THE ASSESSEES CASE (TO WHICH BOTH OF US ARE INCIDENTALLY A PARTY) , CONFIRMING THE IMPUGNED ORDER. IT IS, HOWEVER, AS AF ORE - STATED, OPEN FOR THE ASSESSEE TO LEAD EVIDENCE BEFORE THE ASSESSING 12 ITA NOS. 111 TO 114/PAT/2012 (A.YS. 2001 - 02 TO 200 4 - 0 5 ) BRANCH MANAGER, THE MUZAFFARPUR CENTRAL C O - OP . BANK LTD. VS.ITO (TDS) OFFICER (A.O.) AS TO THE SATISFACTION OF THE TAX DEMAND ON THE INTEREST INCOME IN THE HANDS OF THE DEDUCTEE/S, TO WHICH EXTENT THEREFORE NO RECOVERY CAN IN LAW BE EFFECTED. THE RECOVER Y OF INTEREST DEMAND U/S. 201(1A) WOULD AGAIN F O LL OW THE PRESCRIPTION OF THE TRIBUNALS OR DER , RENDER ED FOLLOWING THE DECISION IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE (SUPRA) AND CIT VS. ELI LILLY AND COMPANY (INDIA) (P.) LTD. [ 2009 ] 178 TAXMAN 505. WE DECIDE ACCORDINGLY. 6. IN THE RESULT, THE ASSESSEES APPEALS ARE DISPOSED OF ON THE ABOVE SAID TERMS. ORDER PRONOUNCED BY LISTING THE RESULT ON THE NOTICE BOARD OF THE BENCH UNDER RULE 34(4) OF THE APPELLATE TRIBUNAL RULES, 1963. SD/ - SD/ - ( A. D. JAIN ) (S ANJAY ARORA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER DATED : 22.07.2015 . . ./ ROSHANI , SR. PS / COPY OF THE OR DER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, PATNA 6. / GUARD F ILE // TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , ITAT, PATNA FIT FOR PUBLICAITON IN ITD SD/ - SD/ - J.M. A.M.