Shri Nareshkumar C.Zaveri, Surat V. The Income tax Officer,TDS-2, Surat

ITA 281/AHD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72843 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-12-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 01-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Assessee Lawyers: VINOD GOYAL
• Keywords: Competent authority
• Section: 201(1)

Judgement Text

, , , , SMC, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, SMC BENCH . .. . . .. . , !' # ' !' # ' !' # ' !' # ' BEFORE SHRI G.C. GUPTA, VICE-PRESIDENT ITA NO.281/AHD/2012 [ASSTT.YEAR : 2003-2004] SHRI NARESHKUMAR C. ZAVERI B-302, KRISHNAKUNJ APARTMENTS B/H. BEJANWALA COMPLEX TADWADI, RANDER ROAD SURAT 395 005. PAN : AABPZ 4965 A /VS. ITO, TDS-2 SURAT. ( (( (%& %& %& %& / APPELLANT) ( (( ('(%& '(%& '(%& '(%& / RESPONDENT) )* + , #/ ASSESSEE BY : SHRI VINOD GOYAL . + , #/ REVENUE BY : SHRI D.K. MISHRA, SR.DR / + *01/ DATE OF HEARING : 12 TH DECEMBER, 2013 234 + *01/ DATE OF PRONOUNCEMENT : 10-01-2014 #5 / O R D E R THIS APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2003-2004 IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-I, SURAT D ATED 10.10.2011. 2. THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE AS UNDER: 1. (I) THE LEARNED CIT ( APPEAL) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ORDER PASSED U/S 201(1) AND 201(IA) OF THE ACT BY THE INCOME TAX OFFICER-TDS. ITA NO.281/AHD/2012 (II) THE LEARNED CIT ( APPEAL) HAS ERRED IN NOT APP RECIATING THE DETAILS OF LABOUR WORK DONE BETWEEN THE PERIOD 01-0 4-2002 TO 31- 05-2002 SUBMITTED BEFORE THE ITO & TO CIT(A) . 2. THE LEARNED CIT ( APPEAL) HAS ERRED IN LAW AND ON F ACTS IN SUSTAINING THE ORDER PASSED BY THE ITO BEYOND THE R EASONABLE TIME LIMIT OF 4 YEARS, AND NOT CONSIDERING THE JUDGMENTS OF SUPREME COURT IN THE CASE OF STATE OF GUJARAT V.PATEL RAGHA V NATH AIR 1969 (SC) 1297 AND S.B.GURBAKSH SINGH V.UOI AIR 1976 (SC ) 1115. 3. THE LEARNED CIT ( APPEAL) HAS ERRED IN LAW AND O N FACTS IN CONFIRMING THE ACTION OF ITO OF CONSIDERING THE ASS ESSEE AS CONTRACTOR AND APPLYING THE PROVISIONS OF SECTION 1 94 C(1) THE PROVISION OF SECTION 194 C(1) WERE MADE APPLICABLE TO INDIVIDUAL/HUF ASSESSEE W.E.F. 01-06-2007 ONLY. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE AO HAS WRONGLY DEEMED THE ASSESSEE TO BE DEFAULT UNDER SEC TIONS 201(1) AND 201(1A) OF THE ACT. HE SUBMITTED THAT THE ACTION I S TIME BARRED AS THE SHOW CAUSE NOTICE WAS ISSUED FOR THE FIRST TIME ON 8.2.2011, WHICH IS AFTER SEVEN YEARS AND ELEVEN MONTHS OF CLOSE OF THE RELEV ANT ACCOUNTING YEAR 2002-2003. HE SUBMITTED THAT THERE ARE SERIES OF D ECISIONS IN STATE OF GUJARAT VS. PATEL RAGHAV NATH, AIR 1969 (SC) 1297, S.B. GURBAKSH SINGH VS. UOI, AIR 1976(SC) 1115 AND THE HONBLE DE LHI HIGH COURT IN THE CASE OF CIT VS. NHK JAPAN BROADCASTING CORPN., 172 TAXMAN 230 (DELHI) WHEREIN HELD THAT ALTHOUGH NO PERIOD IS LAI D DOWN FOR LIMITATION IN SECTION 201, ACTION MUST BE INITIATED BY COMPETENT AUTHORITY UNDER THE ACT WITHIN PERIOD OF FOUR YEARS, AND DATE OF KNOWLEDGE IS NOT RELEVANT FOR PURPOSE OF EXERCISING JURISDICTION INSOFAR AS PROVI SIONS OF ACT ARE CONCERNED. THE LEARNED DR HAS OPPOSED THE SUBMISS IONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). ITA NO.281/AHD/2012 4. I HAVE CONSIDERED RIVAL SUBMISSIONS. I FIND THA T THE SUBMISSIONS OF THE ASSESSEE THAT THE SHOW CAUSE NOTICE WAS ISSUED BY THE REVENUE FOR THE FIRST TIME ON 8.2.2011 I.E. AFTER EXPIRY OF ABOUT S EVEN YEARS AND ELEVEN MONTHS FROM THE END OF RELEVANT FINANCIAL YEAR 2002 -2003, COULD NOT BE CONTROVERTED ON BEHALF OF THE REVENUE. IT IS A CLE AR CASE OF INORDINATE DELAY ON THE PART OF THE REVENUE TO INITIATE PROCEE DINGS UNDER SECTION 201 OF THE ACT. I FIND THAT ALTHOUGH THERE IS NO LIMIT PRESCRIBED FOR LIMITATION FOR INITIATION OF ACTION UNDER THE SAID PROVISIONS OF THE ACT, BUT THE SAME HAS TO BE REASONABLE TIME WITHIN WHICH THE ACTION S HOULD BE INITIATED. THERE IS FORCE IN THE ARGUMENTS OF THE LEARNED COUN SEL FOR THE ASSESSEE THAT THE ASSESSEE IS NOT OBLIGED TO MAINTAIN ITS AC COUNTS BEYOND SIX YEARS AS PER THE SCHEME OF THE ACT. THE HONBLE DELHI HI GH COURT IN CIT VS. NHK JAPAN BROADCASTING CORPN. (SUPRA) HELD THAT WHE RE NO LIMITATION IS PRESCRIBED, AS IN SECTION 201, ACTION MUST BE INITI ATED BY THE COMPETENT AUTHORITY WITHIN A PERIOD OF FOUR YEARS, AND THE DA TE OF KNOWLEDGE IS NOT RELEVANT FOR THE PURPOSE OF EXERCISING JURISDICTION INSOFAR AS PROVISIONS OF THE ACT ARE CONCERNED. NO CONTRADICTORY DECISION HAS BEEN CITED IN FAVOUR OF THE REVENUE. IN THESE FACTS OF THE CASE, I HOLD THAT THE ACTION INITIATED UNDER SECTION 201 OF THE ACT IN THIS CASE IS TIME BARRED AND THE ORDER PASSED BY THE AO UNDER SECTION 201(1) AND 201 (1A) OF THE ACT IS ACCORDINGLY CANCELLED, AND THE GROUNDS OF THE APPEA L OF THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT