The ITO,TDS, Ward-1, Baroda V. Smt. Beenaben P.Shah, Baroda

ITA 128/AHD/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2177 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-07-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 11-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Keywords: Recovery proceedings
• Section: 201(1)

Judgement Text

ITA NO 12 8/AHD/2013 . A.Y. 2003-0 4 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NO. 128 /AHD/2013 (ASSESSMENT YEAR:2003-04) INCOME-TAX OFFICER, TDS WARD- 1, ROOM NO. 4, AAYAKAR BHAVAN, R.C. CIRCLE, BARODA (APPELLANT) VS. SMT. BEENABEN. P. SHAH, PROP. OF SUJAL ADVERTISEMENT , 136, WINDSOR PLAZA, R.C. DUTT ROAD, BARODA (RESPONDENT) PAN: ATIPS 7827 D APPELLANT BY : SHRI O.P. BATHEJA SR. D.R. RESPONDENT BY : MS. URVASHI SHODHAN A.R. ( )/ ORDER DATE OF HEARING : 09-07-20 13 DATE OF PRONOUNCEMENT : 26 -07-2013 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF CIT(A)-VI, BARODA DATED 31.10.2012 FOR A.Y. 2003-04. 2. THE FACTS AS CULLED OUT FROM THE LOWER AUTHORITIES ARE AS UNDER:- 3. ASSESSING OFFICER NOTICED THAT ASSESSEE HAD PAID RS . 22,56,666/- TO SIX PERSONS ON ACCOUNT OF HOARDING RENT DURING THE ASSE SSMENT YEAR 2003-04. HE FURTHER NOTICED THAT NO TAX WAS DEDUCTED UNDER S ECTION 194 I THOUGH ITA NO 12 8/AHD/2013 . A.Y. 2003-0 4 2 THE PAYMENT OF RENT TO EACH PERSON EXCEEDED RS. 1,2 0,000/-. THE DETAILS OF PAYMENT OF HOARDING RENT TO PERSONS AS NOTED BY ASSESSING OFFICER ARE AS UNDER:- SR. NO. NAME OF THE PERSONS AMOUNT PAID DURING TH E YEAR UNDER CONSIDERATION 1 GRAPHIC ADS 1,24,000/- 2 SAV SHANTI INVESMENT P. LTD. 1,46,666/- 3 PRATIK SHARMA 1,00,000/- & 80,000/- 4 COURT RECEIVER OF BOMBAY H.C. 1,62,000/- & 5,67, 000/- 5 CHIEF CASHIER OF W.R., MUMBAI 3,60,000/- & 3,96, 000/- 6 RIM ZIM H. SHAH 3,21,000/- TOTAL 22,56,666/- 4. ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE WORKED OUT THE DEMAND PAYABLE UNDER SECTION 201(1) READ WITH SECTION 194 I AND INTEREST UNDER SECTION 201(1A) AS UNDER:- SR. NO. DEMAND RAISED AS PER PARA RS. DEMAND RAISED U/S 201(1) RWS 194-I RS. INTEREST LEVIED U/S 201 (1A) RS. TOTAL RS. 1 PARA3- NIL 5,831/- 5,831/- 2 PARA 3.1- 51,800/- 38,016/- 89,816/- 3 PARA 3.2- 1,53,090/- 1,21,890/- 2,74,980/- TOTAL 2,04,890/- 1,65,737/- 3,70, 627/- 5. HE ACCORDINGLY RAISED DEMAND FOR 3,70,627/- VIDE OR DER DATED 31.03.2009. AGGRIEVED BY THE ORDER OF ASSESSING OF FICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) ALLOWED T HE APPEAL OF THE ASSESSEE BY HOLDING AS UNDER:- ITA NO 12 8/AHD/2013 . A.Y. 2003-0 4 3 3.3 I HAVE CONSIDERED THE FACTS OF THE CASE, FINDINGS O F THE ASSESSING OFFICER AND THE SUBMISSIONS MADE BY THE APPELLANT. UNDISPUTED FACTS ARE THAT:- THE APPELLANT HAS NOT DEDUCTED TDS U/S 194 I FROM T HE PAYMENT MADE TO THE VARIOUS PARTIES ON ACCOUNT OF RENT. THE ASSESSING OFFICER HAS ISSUED NOTICES ON 10.01.2 008. WHICH IS AFTER FOUR YEARS FROM THE END OF FINANCIAL YEAR? SINCE NO TIME LIMITATION HAS BEEN PROVIDED EXPRESSL Y IN THE ACT THEREFORE, THE REASONABLE TIME FOR TAKING ACTION U/S 201 IS TO BE CONSIDERED. THERE IS NO DENYING OF THE FACT THAT THE PROCEEDINGS HAVE BEEN INITIATED BEYOND FOUR YEARS. ON IDENTICAL FACTS THE HON. ITAT MUMBAI IN CASE OF RAYMOND WOOLLEN MILLS LTD. VS. ITO (1996) 57 ITD 536(BOM.), INDIAN RAYON & INDUSTRIES LTD. (ITA NO. 2479 (MUM.) OF 2004 AND IN CASE OF RAYMOND LTD. V. DCIT (2003) 86 ITD 791 (MUM.) HAS HELD THAT NOTICE U/S 201 & 201(1A) F OR RECOVERY OF TAX NOT DEDUCTED/SHORT DEDUCTED AND INTEREST THEREON CANNOT BE ISSUED BEYOND A PERIOD OF FOUR YEARS. HON. SUPREME COURT IN THE CASE OF STATE OF GUJARAT VS PATEL RAGHAV NATH AIR 1969 SC 1297 HAS ALSO HELD THAT IN CASE NO TIME LIM IT HAS BEEN PRESCRIBED IN THE STATUTE THEN THE PROCEEDING SHOULD BE INITIATED WITHIN THE REASONABLE TIME AND REASONABLE TIME HAS BEEN CONSIDERED AS FOUR YEA RS. FURTHER W.E.F 01.04.2010 SUBSECTION 3 OF SECTION 20 1 HAS BEEN INSERTED BY THE FINANCE (NO. 2) ACT, 2009 PRESCRIBING TIME LIMIT OF FOUR YEARS, THOUGH NOT APPLICABLE IN THE INSTANT CASE. UNDER THE CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE DECISION OF THE HON. ITAT MUM. AND HON. SUPREME COURT, THE TAX DEMAND OF RS. 2,04,890/- RAISED U/S 201(1) R.W.S. 194 1 AND THE INTEREST OF RS. 1,65,73 7/- U/S 201(1A) IS DIRECTED TO THE DELETED . AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS NO W IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DEL ETING THE ADDITION MADE U/S. 201(1) OF THE IT ACT OF RS. 2,04,890/- AND INTEREST CHARGE UNDER SECTION 201 (1A) OF THE IT ACT OF RS. 1,65,737/- RELYING ON THE DECISION OF HON. SUPREME COURT IN THE CASE OF STATE OF GUJARAT VS. PATEL RAG HAV NATH AIR 1969 SC WHEREIN IT WAS HELD THAT . IN CASE NO TIME LIMIT HAS BEEN PRESCRIBED IN THE STATUTE THEN PROCEEDING SHOULD BE INITIATED WITHIN THE REASONABLE TIME AND REASONABLE TIME HAS BEEN CONSIDERED AS FOUR YEARS . 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN OVE RLOOKING THE FACT THAT THE ASSESSING OFFICER HAS INITIATED THE PROCEEDINGS WEL L BEFORE FOUR YEARS BY ISSUING SHOW CAUSE NOTICE TO THE ASSESSEE DATED 10. 01.2008. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT FOLLOWING THE DECISION OF MUMBAI TRIBUNAL IN THE CASE OF MAHINDRA & MAHINDRA WHICH IS PASSED WELL BEFORE THE AMENDMENT MADE IN SECTION 201(3) BY FINA NCE ACT 2012, W.E.F. 1/4/2010 WHEREIN 6 YEARS LIMIT HAVE BEEN MADE AS AG AINST FOUR YEARS. ITA NO 12 8/AHD/2013 . A.Y. 2003-0 4 4 6. BEFORE US, THE LEARNED D.R. SUBMITTED THAT THE ORDE R PASSED BY THE ASSESSING OFFICER WAS WITHIN SIX YEARS FROM THE END OF FINANCIAL YEAR AND WAS AS PER THE PROVISIONS OF SECTION 201(1) (3)(II) . HE THUS SUBMITTED THAT THE ORDER OF ASSESSING OFFICER BE UPHELD. THE LEAR NED A.R. ON THE OTHER HAND SUBMITTED THAT THE PAYMENTS WERE MADE IN FINAN CIAL YEAR 2002-03 AND THE ORDER UNDER SECTION 201(1)/201(1A) OF THE I T ACT WAS PASSED BY THE ASSESSING OFFICER ON 31.03.2009 THAT IS BEYOND FOUR YEARS FROM THE END OF THE RELEVANT FINANCIAL YEAR AND THEREFORE TH E ORDER OF THE AO IS TIME BARRED. SHE PLACED RELIANCE ON THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. HUTCHISON ESSAR TELECOM LTD. (2 010) 323 ITR 230 (DEL.) WHERE THE HON. HIGH COURT HAS HELD THAT THE PROCEEDINGS UNDER SECTION 201(1)/201(1A) COULD BE INITIATED ONLY WIT HIN THREE YEARS FROM THE END OF ASSESSMENT YEAR OR WITHIN FOUR YEARS FRO M THE END OF RELEVANT FINANCIAL YEAR. SHE ALSO PLACED RELIANCE IN THE DE CISION ON THE CASE OF CIT VS. N.H.K JAPAN BROAD-CASTING CORPORATION 2008 305 ITR 137 (DELHI). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE PAYMENT ON WHICH THE ASSESSEE WAS REQUIRED TO DEDUCT TDS PERTAINS TO FINANCIAL YEAR 2 002-03. THE ORDER UNDER SECTION 201(1)/201(1A) WAS PASSED ON 31.03.20 09 WHICH IS BEYOND PERIOD OF FOUR YEARS FROM THE END OF FINANCI AL YEAR. THE HON. DELHI HIGH COURT IN THE CASE OF CIT VS. HUTCHISON E SSAR TELECOM LTD. (SUPRA) HELD THAT PROCEEDINGS UNDER SECTION 201(1)/ 201(1A) WOULD BE INITIATED ONLY WITHIN 3 YEARS FROM THE END OF ASSES SMENT YEAR OR WITHIN 4 YEARS FROM THE END OF RELEVANT FINANCIAL YEAR. ITA NO 12 8/AHD/2013 . A.Y. 2003-0 4 5 8. BEFORE US, THE LEARNED D.R. HAS SUBMITTED THAT THE TIME LIMIT FOR PASSING THE ORDER UNDER SECTION 201(1)/201(1A) AS PER THE P ROVISIONS OF SECTION 201 (3) (II) IS 6 YEARS FROM THE END OF FINANCIAL Y EAR. WE HOWEVER FIND THAT THE AMENDMENT WITH RESPECT TO THE TIME LIMIT O F PASSING OF ORDER WITHIN SIX YEARS HAS BEEN MADE BY FINANCE ACT, 2012 WITH EFFECT FROM 1.04.2010. IN THE PRESENT CASE SINCE THE ASSESSMEN T YEAR AND THE DATE OF PASSING OF ORDER U/S 201(1A) IS PRIOR TO THE DATE O F AMENDMENT, WE ARE OF THE VIEW THAT THE AMENDMENT MADE BY THE FINANCE ACT , 2012 WOULD NOT APPLY TO THE PRESENT CASE. WE THEREFORE FIND NO REA SON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS DISMISS THIS GROUND OF REVENUE. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSE D ORDER PRONOUNCED IN OPEN COURT ON 26- 07- 2013. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,A HMEDABAD