Income tax officer (TDS) Ward-1(3), Bangalore V. M/s Paraag Ltd , Bangalore

ITA 1421/BANG/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1411 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 19-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Assessee Lawyers: V CHANDRASEKHAR
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1 421 /BANG/201 7 ASSESSMENT YEAR : 20 08 - 09 THE INCOME TAX OFFICER (TDS), WARD 1 (3), BANGALORE. VS. M/S. PARAAG LTD., NO. 3, RAJ BHAVAN ROAD, BANGALORE 560 001. TAN: BLRH00241D APPELLANT RESPONDENT APPELLANT BY : DR. P.V. PRADEEP KUMAR, ADDL. CIT (DR) RESPONDENT BY : SHRI V. CHANDRASEKHAR, ADVOCATE DATE OF HEARING : 23.07.2018 DATE OF PRONOUNCEMENT : 07 .09.2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-13, BANGALORE DATED 27.03.2017 FOR ASSES SMENT YEAR 2008-09. 2. THE GROUNDS RAISED BY THE REVENUEARE AS UNDER. 1. THE ORDER OF CIT(A) IS OPPOSED TO THE FACTS AND NATURE OF THE CASE ON HAND. 2. THE ID. CIT (A) ERRED IN HOLDING THAT THE ORDER U/S. 201(1) PASSED IN THE ASSESSEE'S CASE ON 28.01.2013 FOR THE AY. 2008- 09 IS BARRED AS PER THE PROVISO TO SEC. 201(3). 3. THE CIT(A) ERRED IN DECIDING THE APPEAL ON TECHN ICAL GROUNDS WITHOUT GOING INTO THE MERITS OF THE ORDER PASSED U /S. 201(1A) OF THE INCOME TAX ACT, 1961. 4. THE LD. CIT (A) OUGHT TO HAVE CONSIDERED THE FAC T THAT EVEN IF THE CHALLAN HELD TO BE PERTAINING TO FY. 2006-07, THE P RINCIPLE AMOUNT OF RS.1,34,64,000/-REMAINS AS OUTSTANDING DEMAND U/S. 201(1) FOR NON REMITTANCE OF TDS ALREADY DEDUCTED AT SOURCE FOR FY . 2007-08. 5. THE LD. CIT (A) OUGHT TO HAVE APPRECIATED THE FA CT THAT THE ENTRY IN ITA NO.1421/BANG/2017 PAGE 2 OF 4 THE BOOKS OF ACCOUNT OF THE ASSESSEE BASED ON RENTA L AGREEMENT IS A VALID TRANSACTION FOR DEDUCTION OF TAX AND THE ACTU AL PAYMENT HAS NOT HAPPENED THROUGH THE BOOKS OF THE ASSESSEE. AND HEN CE, THIS CASE IS OF DEDUCTION AND NON-REMITTANCE. 6. THE LD. CIT (A) FAILED TO CONSIDER THE FACT THAT THE ASSESSEE HAS ONLY FILED THE STATEMENT FOR FY. 2007-08 BUT HAS NOT REM ITTED THE AMOUNT FOR FY. 2007-08, AND HENCE THIS IS THE CASE OF DEDU CTION AND NON - REMITTANCE. HENCE, PROVISO TO THE SEC. 201(3) IS NO T APPLICABLE TO THIS CASE. FOR THESE AND OTHER GROUNDS THAT MAY BE RAISED DURI NG THE COURSE OF APPEAL AND ACTUAL HEARING IT IS PRAYED THAT THE ORD ER PASSED BY THE AO U/S. 201(1) AND 201(1A) BE AND THE ORDER OF THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SE: ASIDE AND CANCEL LED. 3. THE LD. DR OF REVENUE SUPPORTED THE ORDER PASSED BY THE AO U/S. 201(1) AND 201(1A) OF IT ACT ON 28.01.2013 WHEREAS THE LD. AR OF ASSESSEE SUPPORTED THE ORDER OF CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND T HAT ISSUE IN DISPUTE WAS DECIDED BY CIT(A) AS PER PARAS 9.5 AND 9.6 OF HIS O RDER WHICH ARE REPRODUCED HEREINBELOW FOR READY REFERENCE. 9.5 IT IS SEEN THAT THE APPELLANT HAS FILED QUARTER LY STATEMENTS FOR ALL THE FOUR QUARTERS FOR FY 2007-08(AY 2008-09). THE Q UARTERLY RETURN FOR Q4 IS FILED ON JULY 2008 (I.E. IN F.Y. 2008-09) . IN VIEW OF THIS, NO ORDER COULD BE PASSED AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE STATEMENT IS FILED AS R EFERRED TO IN SECTION 200. ACCORDINGLY, THE ORDER COULD NOT BE PASSED BEY OND 31/03/2011. THE ORDER PASSED ON 28/01/2013 IS THEREFORE BARRED BY LIMITATION. 9.6 THE MATTER MAY BE EXAMINED IN TERMS OF THE PROV ISO TO SEC 201(3). INTERPRETATION OF THIS PROVISO WAS CONSIDERED BY HO N'BLE DELHI HIGH COURT IN CASE OF TATA TELESERVICES LTD (ITA NO.8641 /2011). THE WRIT PETITIONS DEALT WITH THE VALIDITY OF THE ACTION INI TIATED BY THE DEPARTMENT UNDER SECTIONS 201(1) AND 201(1A) OF THE ACT FOR NON- DEDUCTION OF TAX AT SOURCE FOR PERIODS EARLIER THAN FOUR YEARS PRIOR TO 31ST MARCH, 2011. THE HONBLE HIGH COURT IN ITS ORD ER DATED 09/03/2016 QUASHED THE PROCEEDINGS U/S SEC.201(1)/( 1A) ON ASSESSEE IN RESPECT OF TDS DEFAULT ON PRE-PAID CARDS PAYMENT S RELATING TO PERIOD PRIOR TO APRIL 2007. THE SLP (2420/2017) FIL ED BY REVENUE AGAINST THIS HAS BEEN DISMISSED BY HON'BLE SUPREME COURT VIDE ITS ORDER DATED 06/02/2017. THUS EVEN AS PER THE PROVIS O TO SEC 201(3), AN ORDER UNDER SEC 201(1) FOR FY 2007-08 OR ANY EAR LIER YEAR, COULD ITA NO.1421/BANG/2017 PAGE 3 OF 4 NOT BE PASSED AFTER 31.03.2011. THE ORDER U/S 201(1 ) PASSED IN THE APPELLANT'S CASE ON 28/01/2013 IS THEREFORE BARRED AS PER THE PROVISO ALSO. 5. FROM THESE TWO PARAS OF ORDER OF CIT(A), IT IS S EEN THAT HIS DECISION IS ON THIS BASIS THAT THE ASSESSEE HAS FILED QUARTERLY STATEME NTS FOR ALL THE FOUR QUARTERS FOR FINANCIAL YEAR 2007-08 (ASSESSMENT YEAR 2008-09 ). IT IS FURTHER NOTED IN THE SAME PARA THAT THE QUARTERLY RETURN FOR THE QUA RTER 4 IS FILED IN JULY 2008 I.E. IN FINANCIAL YEAR 2008-09 AND THEREFORE, NO ORDER C OULD BE PASSED AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL Y EAR IN WHICH THE STATEMENT IS FILED AS REFERRED TO IN SECTION 200. IT IS HELD BY CIT(A) THAT IN THIS VIEW OF THE LEGAL AND FACTUAL POSITION, THE ORDER COULD NOT BE PASSED BEYOND 31.03.2011 BUT THE IMPUGNED ORDER IS PASSED ON 28.01.2013 WHIC H IS BARRED BY LIMITATION. THE LD. DR OF REVENUE COULD NOT POINT OUT ANY MISTA KE IN THESE FINDINGS OF CIT(A). WE ALSO FIND THAT IN PARA 9.6 OF HIS ORDER , THE CIT(A) HAS REFERRED TO A JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN TH E CASE OF TATA TELESERVICES LTD. IN ITA NO. 8641/2011 IN WHICH IT WAS HELD BY H ONBLE DELHI HIGH COURT THAT AS PER ITS JUDGMENT DATED 09.03.2016, IT WAS HELD T HAT AS PER THE PROVISO TO SECTION 201(3), AN ORDER U/S. 201(1) FOR FINANCIAL YEAR 2007-08 OR ANY EARLIER YEAR COULD NOT BE PASSED AFTER 31.03.2011. AS PER THE PROVISIONS OF SUB SECTION 3 OF SECTION 201, WE FIND THAT BEFORE AMEND MENT BY THE FINANCE (NO. 2) ACT 2014 W.E.F. 01.10.2014, THE PROVISIONS OF THIS SUB SECTION 3 OF SECTION 201 OF IT ACT PRESCRIBED THAT NO ORDER SHALL BE MADE UN DER SECTION 201(1) OF IT ACT AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE F INANCIAL YEAR IN WHICH THE STATEMENT IS FILED IN A CASE WHERE STATEMENT REFERR ED TO IN SECTION 200 HAS BEEN FILED. HENCE IN VIEW OF THESE PROVISIONS OF SECTIO N 201(3) OF IT ACT AS WERE ON STATUTE BOOK IN THE RELEVANT PERIOD OF TIME IN WEHI CH THERE IS NO AMBIGUITY, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND THEREF ORE WE DECLINE TO INTERFERE. ITA NO.1421/BANG/2017 PAGE 4 OF 4 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (SUNIL KUMAR YADAV) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 7 TH SEPTEMBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.