Appeal details
Counselvise Citation
[2018] 112 COUNSELVISE.COM (IT) 5746 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 5 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
03-12-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
Not Allotted
Assessment Year
misc
Appeal Filed On
14-06-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C , MUMBAI BEFORE S HRI B.R. BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 4048/MUM/2016 ASSESSMENT YEAR: 2001 - 2002 & ITA NO. 4049/MUM/2016 ASSESSMENT YEAR: 2004 - 2005 HATHWAY NASIK CABLE NETWORK PRI VATE LIMITED, RAHEJAS, 4 TH FLOOR, CORNERS OF MAIN AVENUE & V.P. ROAD, SANTA CRUZ (WEST), MUMBAI - 400054 PAN: AAACH9070Q VS. THE TAX RECOVERY OFFICER (TDS) - RG. - 1, SMT. K G MITTAL AYURVEDIC HOSPITAL BLDG., CHARNI ROAD (WEST), MUMBAI - 400002 (AP PELLANT) (RESPONDENT) ASSESSEE BY : SHRI NITESH JOSHI MANOJ DIXIT (AR) REVENUE BY : SHRI ABI RAMA KARTIKIYAN (D R) DATE OF HEARING: 0 4/09 /201 8 DATE OF PRONOUNCEMENT: 03 / 12 /201 8 O R D E R PER RA M LAL NEGI, JM THE ASSESSEE HAS FILED THESE APPEALS AGAINST THE TWO ORDER S DATED 18.06.2014 AND 29.05.2014 PASSED BY THE C OMMISSIONER OF INCOME TAX (APPEALS) (FOR SHORT THE CIT (A)) - 14 , MUMBAI , FOR THE ASSESSMENT YEAR S 2001 - 02 AND 2004 - 05 RESP ECTIVELY, WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ORDER PASSED U/S 201(1) & 201 (1A) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 ITA NO. 4048/MUM/2016 (ASSESSMENT YEAR: 2001 - 2002 ) 2. BRIEF FACTS OF TH E CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF RECEIVING AND DISTRIBUTING LOCAL SATELLITE CHANNEL PROGRAMMES. A SURVEY ACTION U/S 133A OF THE ACT WAS CONDUCTED IN THE ASSESSEES CASE ON 17.09.2003 AT OFFICE PREMISES SITUATED AT 4 TH FLOO R, RAHEJA CORNER OF MAIN AVENUE AND V P ROAD, SANTACRUZ (WEST), MUMBAI. DURING THE COURSE OF SURVEY, IT WAS NOTICED THAT THE ASSESSEE COMPANY HAS FAILED TO DEDUCT TAX AT SOURCE U/S 194C OF THE ACT ON THE EXPENSES CLAIM ED BY IT . ACCORDINGLY, A SHOW CAUSE NO TICE WAS ISSUED AND SERVED ON THE ASSESSEE ON 24.09.2004 AND THE ASSESSEE WAS ASKED TO FURNISH MONTH - WISE AND PARTY - WISE BREAKUP OF THE EXPENSES. IN RESPONSE THEREOF , THE ASSESSEE SUBMITTED WRITTEN REPLY INTER ALIA CONTENDING THAT PROVISIONS OF SECTION 19 4C OF THE INCOME TAX ACT DO NOT APPLY TO THE ASSESEES CASE AS THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH DISTRIBUTORS IS A DISTRIBUTION AGREEMENT AND NOT A BROADCASTING AGREEMENT; THE PAYMENTS MADE BY THE ASSESSEE ARE TAXABLE IN THE HANDS OF THE PAYE ES , HENCE IN THE LIGHT OF THE LAW LAID DOWN BY THE HONBLE SUPREME COURT IN M/S HINDUSTAN COCA C OLA BEVERAGES PVTLTD. VS. CIT 293 ITR 226 SC, RECOVERY OF TAX FROM THE ASSESSEE IS NOT PERMISSIBLE. HOWEVER, THE AO REJECTING THE CONTENTION S OF THE ASSESSEE D ECLARED THE ASSESSEE TO BE AN ASSESSEE IN DEFAULT U/S 201 OF THE ACT IN RESPECT OF A SUM OF RS. 1,53,016/ - BEING THE AMOUNT OF TAX DEDUCTIBLE AND FURTHER DIRECTED TO PAY INTEREST U/S 201 (IA) OF THE ACT AMOUNTING TO RS. 2,06,137/ - ON ACCOUNT OF DELAY PAYM ENT OF TAX DEDUCTIBLE. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND HELD THAT THE ASSESSEE IS LIABLE FOR INTEREST U/S 201(IA) BUT ONLY FOR THE PERIOD COMMENCING FROM THE DATE ON WHICH THE SAID TAX WAS DEDUCTED TO THE DATE ON WHICH THE TAX WAS ACTUALLY PAID AND FURTHER DIRECTED THE AO TO GIVE A REASONABLE OPPORTUNITY TO THE ASSESSEE TO PRODUCE DOCUMENTS IN THIS REGARD AND MODIFY THE COMPUTATION ACCORDINGLY. 3 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 3 . THE ASSESSE E HAS RAISED THE FOLLOWING EFFECTIVE GROUND S OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 1. THE APPELLANT SUBMITS THAT THE ORDER UNDER SECTION 201 ( 1) AND 201 (1A) PASSED BY THE ASSESSING OFFICER BEYOND A PERIOD OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH PROCEEDINGS UNDER SECTION 201 (1) WERE INITIATED WAS BARRED BY LIMITATION. THE APPELLANT SUBMITS THAT EVEN IF NO PERIOD OF LIMITATION IS PRESCRIBED, THE STATUTORY POWERS MUST BE EXERCISED WITHIN A REASONABLE TIME. 2. WITHOUT P REJUDICE TO WHAT STATED ABOVE, THE APPELLANT SUBMIT THAT THE ORDER UNDER SECTIONS 201 (1) AND 201 (1A) PASSED BY THE ASSESSING BEYOND A PERIOD OF FOUR YEARS FROM THE END OF FINANCIAL WAS BARRED BY LIMITATION. THE APPELLANT SUBMITS THAT EVEN IF NO PERIOD OF LIMITATION IS PRESCRIBED, THE STATUTORY POWERS MUST BE EXERCISED WITHIN A REASONABLE TIME. 3. (A) THE APPELLANT SUBMITS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ACTION OF THE LEARNED TAX RECOVERY OFFICER (HEREINAFTER REFER RED TO AS THE ASSESSING OFFICER) THAT PAYMENT FOR PAY CHANNEL COST AMOUNTING TO RS. 69,55,258/ - MADE TO DISTRIBUTOR OF SIGNAL IS A CONTRACT FOR WORK AND LIABLE FOR DEDUCTION UNDER SECTION 194C OF THE ACT AND ACCORDINGLY ERRED IN HOLDING THAT THE ASSESSEE IS AN ASSESSEE IN DEFAULT UNDER SECTION 201 (1) OF THE ACT. (B) THE APPELLANT SUBMITS THAT AS REGARDS PAYMENTS FOR COST OF PAY CHANNELS, THE PAYEES MERELY DISTRIBUTE SIGNALS TO THE APPELLANT AND ACCORDINGLY, THERE IS NO QUESTION OF ANY INVOLVEMENT OF W ORK. (C) THE APPELLANT SUBMITS THAT THE PAYMENT MADE FOR PROCUREMENT OF SIGNALS ARE NOT TO ANY BROADCASTERS OR TELECASTERS AND ACCORDINGLY, THE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE AND THEREFORE NO TAX WAS REQUIRED TO BE DEDUCTED AT SOURCE. 4. (A) TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER OF LEVYING INTEREST UNDER SECTION 201 (1A) OF THE ACT AMOUNTING TO RS. 2,06,137/ - ON THE GROUND THAT PAYMENT OF INTEREST IS MANDATORY. 4 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 (B) THE LEARNED CO MMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW IN HOLDING THAT THOUGH THE ASSESSEE SHOULD NOT BE HELD TO BE AN ASSESSEE IN DEFAULT, THE APPELLANT WOULD BE LIABLE TO INTEREST UNDER SECTION 201 (1A) OF THE ACT FOR THE PERIOD COMMENCING FROM THE DATE ON WHIC H TAX WAS DEDUCTED TO THE DATE ON WHICH TAX IS ACTUALLY PAID. 5. THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED: (I) ORDER UNDER SECTION 201 (1) AND 201 (1A) PASSED BEYOND ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH PROCEEDIN GS UNDER SECTION 201 (1) WERE INITIATED WHICH IS BARRED BY LIMITATION AND SAME OUGHT TO BE CANCELLED. (II) ORDER UNDER SECTION 201 (1) AND 201 (1A) PASSED BEYOND FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH IS BARRED BY LIMITATION AND SAME OUGHT TO BE CANCELLED. (III) NOT TO TREAT THE PAYMENTS MADE BY THE APPELLANT TO THE DISTRIBUTORS OF SIGNALS AS A CONTRACT FOR WORK FALLING WITHIN THE PURVIEW OF SECTION 194C OF THE ACT. (IV) TO DELETE THE LEVY OF TAX UNDER SECTION 201 (1) OF THE ACT AMOUNTING T O A SUM OF RS. 1,53,016/ - . (V) TO DELETE THE INTEREST LEVIED UNDER SECTION 201 (1A) OF THE ACT AMOUNTING TO A SUM OF RS. 2,06,137/ - AND TO MODIFY THE ORDER AS PER THE PROVISIONS OF THE LAW. 6. EACH OF THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER. 4. SINCE, THERE WAS A DELAY OF 661 DAYS IN FILING THE PRESENT APPEAL, THE ASSESSEE HAS FILED THE PRESENT APPEAL ALONG WITH AN APPLICATION FOR CONDONATION OF DELAY . THE ASSESSEE HAS FILED AFFIDAVIT S DATED 24 TH . JUNE 2018, SWORN BY SH. PRAVIN KADAM, DEPUTY MANAGER TAXATION OF THE ASSESSEE COMPANY AND SH. SHYAM PV, DIRECTOR OF THE ASSESSEE COMPANY STATING THE REASON FOR DELAY IN FILING THE PRESE NT APPEAL . IN THE LIGHT OF THE SAID APPLICATION THE LD. COUNSEL FOR THE ASSESSEE SUBMIT TED BEFORE US THAT THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) WAS RECEIVED IN JULY, 2014. IN MAY, 2016, WHILE GOING THROUGH THE FILES 5 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 OF ASSESSMENT YEAR 2001 - 02, IT WAS NOTICED THAT THE IMPUGNED ORDER HAS ALREADY BEEN RECEIVED IN JULY, 2014. SINCE DURING THE PERIOD BETWEEN JULY, 2014 TO MAY, 2016 IT WENT UN - NOTICED THAT THE APPELLATE ORDER HAS ALREADY BEEN RECEIVED, THE PRESENT APPEAL COULD NOT BE FILED WITHIN THE LIMITATION PERIOD. THIS ORDER WAS RECEIVED BY SH. PRAVIN KADAM, DEPUTY MANAGER TAXATION, WHO WAS WORKING FROM 603, HYDE PARK, SAKI VIHAR ROAD ANDHERI (E) DURING THE PERIOD JULY 2014. THE LD. COUNSEL FURTHER POINTED OUT THAT SH. PRAVIN KADAM HAS STATED IN HIS AFFIDAVIT THAT INADVERTENTLY HE DID NOT FORWARD THE SAME TO THE REGISTERED OFFICE OF THE C OMPANY AND IT WAS MISPLACED. THE LD. COUNSEL FURTHER POINTED OUT THAT THE MUMBAI BENCH OF THE TRIBUNAL HAS CONDONED THE DELAY OF 658 DAYS IN FILING APPEAL AGAINST THE APPELLATE ORDER PASSED BY THE LD. CIT(A) CONFIRMING THE ORDER PASSED BY THE RECOVERY OFFI CER U/S 201(I) AND 201 (IA) OF THE ACT, IN THE ASSESSEES CASE PERTAINING TO THE ASSESSMENT YEAR 2003 - 04. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE TRIBUNAL HAS CONDONED THE DELAY OF 658 DAYS IN FILING OF THE APPEAL PERTAINING TO THE ASSESSMENT YEAR 2003 - 04 AND SINCE THE REASONS FOR DELAY IN THE PRESENT CASE ARE IDENTICAL TO THE REASONS IN THE ASSESSEES APPEAL PERTAINING TO THE ASSESSMENT YEAR 2003 - 04, THE DELAY OF 661 DAYS IN THE PRESENT CASE MAY BE CONDONED IN THE INTEREST OF JUSTICE. 5. ON THE OT HER HAND THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FAIRLY ADMITTED THAT IN A SIMILAR SITUATION THE TRIBUNAL HAS CONDONED THE DELAY AND HEARD THE ASSESSEES APPE AL PERTAINING TO THE A.Y. 2003 - 0 4 ON MERITS. HOWEVER, THE LD. DR OPPOSED THE APPLICATION ON THE G ROUND THAT THE DELAY IS INORDINATE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT RECORD INCLUDING THE DECISION OF THE COORDINATE BENCH RELIED ON BY THE ASSESSEE. THE COORDINATE BENCH HAS CONDONED THE DELAY IN FILING APPEAL PERTAINING TO THE ASSESSMENT YEAR 2003 - 04, HOLDING AS UNDER: - 6 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 6. BEFORE PROCEEDINGS FURTHER, WE MAY HEREIN OBSERVE THAT THE PRESENT APPEAL FILED BY THE ASSESSEE BEFORE US INVOLVES A DELAY OF 658 DAYS. THE ASSESSEE EXPLAINING THE REASON FOR THE AFORESAID DELAY IN FIL ING OF THE APPEAL HAD FILED AN AFFIDAVIT , DATED 15.06.2016 OF SHRI VINEET GARG, DIRECTOR OF THE ASSESSEE COMPANY. THAT SHRI VINEET GARG IN HIS AFFIDAVIT HAD DEPOSED THAT THOUGH THE ORDER OF THE CIT(A) - 14, MUMBAI WAS HANDED OVER TO MR. PRAVIN KADAM, DEPUTY MANAGER OF TAXATION OF THE HOLDING COMP ANY, VIZ. HATHWAY CABLE AND DATACOM LTD ON 28.06.2014, AT 805/806, WINDSOR OFF. CST ROAD, KALINA, SANTA CRUZ (E) MUMBAI, HOWEVER, HE PLACED THE AFORESAID ORDER OF THE CIT(A) IN THE FILE AND FAILED TO FORWARD THE SAME TO THE CHARTERED ACCOUNTANT. IT WAS CLA IMED THAT IN MAY, 2016 WHILE GOING THROUGH THE FILES OF THE ASSESSEE FOR A.Y. 2003 - 04, IT EMERGED FOR THE VERY FIRST TIME THAT THE ORDER OF THE CIT(A) FOR THE YEAR UNDER CONSIDERATION, VIZ. AY. 2003 - 04 WAS THOUGH ALREADY RECEIVED IN JUNE, 2014, BUT HOWEVER , THE SAME HAD INADVERTENTLY REMAINED OMITTED TO BE DELIVERED TO THE CHARTERED ACCOUNTANT. THE DEPONENT HAD STATED IN THE AFFIDAVIT THAT THE ORDERS OF THE CIT(A) FOR THE PRECEDING YEARS, VIZ. A.YS 2001 - 02 AND 2002 - 03 ON THE SAME ISSUE AS WAS THERE IN THE P RESENT APPEAL OF THE ASSESSEE, WERE ALREADY ASSAILED BY THE ASSESSEE BEFORE THE INCOME TAX APPELLATE TRIBUNAL. THAT IT IS STATED BY THE DEPONENT THAT IMMEDIATELY ON LEARNING OF THE AFORESAID ORDER OF THE CIT(A) FOR AY: 2003 - 04, THE COUNSEL OF THE ASSESSEE WAS APPROACHED AND BRIEFED ABOUT THE FACTUAL POSITION. THE ASSESSEE WAS INFORMED BY ITS COUNSEL THAT THE APPEAL INVOLVED A DELAY OF 658 DAYS. IT IS STATED BY THE ASSESSEE THAT THE AFORESAID DELAY IN FILING OF THE APPEAL FOR THE YEAR UNDER CONSIDERATION, VI Z. A.Y 2003 - 04 WITH THE TRIBUNAL HAD OCCASIONED ON ACCOUNT OF AN INADVERTENT OMISSION ON THE PART OF A MEMBER OF THE STAFF. IT IS STATED BY THE DEPONENT THAT IN THE BACKDROP OF THE FACTS LEADING TO THE DELAY IN FILING OF THE PRESENT APPEAL, THE SAME IN ALL FAIRNESS MAY BE CONDONED, FAILING WHICH A MERITORIOUS MATTER WOULD BE DISMISSED ON ACCOUNT OF TECHNICALITIES. 7. THAT DURING THE COURSE OF HEARING OF THE AFORESAID APPLICATION SEEKING CONDONATION OF DELAY, IT WAS SUBMITTED BY THE LD. 7 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 AUTHOR IZED REPRESENT ATIVE (FOR SHORT A.R ) FOR THE ASSESSEE THAT THE DELAY INVOLVED IN FILING OF THE PRESENT APPEAL HAD CREPT IN ABSOLUTELY ON ACCOUNT OF A BONAFIDE MISTAKE ON THE PART OF THE MR. PRAVIN KADAM, DEPUTY MANAGER (TAXATION) OF THE HOLDING COMPANY, VIZ. HATHWAY CA BLE AND DATACOM LTD. THAT IN SUPPORT OF THE AFORESAID FACTS THE AFFIDAVIT OF SHRI PRAVIN KADAM, DEPUTY MANAGER (TAXATION) OF THE HOLDING COMPANY, DATED 24.06.2016 WAS ALSO PLACED ON RECORD BY THE ASSESSEE. THE LD. A.R IN SUPPORT OF HIS CONTENTION THAT AS T HE DELAY IN FILING OF THE PRESENT APPEAL WAS BACKED BY A BONAFIDE MISTAKE ON THE PART OF THE ASSESSEE AND NOT ON ACCOUNT OF ANY LAPSES AND LACHES, THEREFORE, THE DELAY INVOLVED DID MERIT TO BE CONDONED, RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT I N THE CASE OF RAMNATH SAO VS. GOBARDHAN SAO, (AIR 2002 SUPREME COURT 1021). THE LD. A.R TAKING US THROUGH THE AFORESAID JUDGMENT OF THE HON BLE SUPREME COURT SUBMITTED THAT THE HON BLE APEX COURT WHILE CONDONING A DELAY OF 130 DAYS INVOLVED IN THE SAID APP EAL, HAD TAKEN SUPPORT OF ITS EARLIER JUDGMENT IN THE CASE OF N. BALKRISHNAN VS. M. KRISHNAMURTHI (1998) 7 SUPREME COURT CASE, WHEREIN A DELAY OF 883 DAYS WAS CONDONED BY THE HON BLE APEX COURT. THE LD. A.R TOOK US THROUGH THE OBSERVATIONS RECORDED BY THE HON BLE SUPREME COURT, AND TAKING SUPPORT FROM THE SAME SUBMITTED THAT MERELY FOR THE REASON THAT SOME LAPSE WAS THERE ON THE PART OF THE LITIGANT IN FILING APPEAL WITHIN THE STI PULATED TIME PERIOD WOULD NOT JUSTIFY THE TURNING DOWN OF HIS PLEA AND DECLINING THE ADMISSION OF HIS APPEAL ON THE SAID COUNT. IT WAS SUBMITTED BY THE LD. A.R THAT THE HON BLE APEX COURT HAD OBSERVED THAT WHERE THE EXPLANATION OF THE APPELLANT DOES NOT SM ACK OF MALAFIDES OR IS NOT PUT FORTH AS PART OF A DILATORY STRATEGY, THE COURTS MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. IT WAS THUS SUBMITTED BY THE LD. A.R THAT KEEPING IN VIEW THE AFORESAID OBSERVATIONS OF THE HON BLE SUPREME COURT, NOW WHEN IN THE CASE OF THE PRESENT ASSESSEE THE DELAY INVOLVED IN FILING OF THE APPEAL HAD ARISEN NOT ON ACCOUNT OF ANY MALAFIDE CONDUCT OR AS A PART OF A DILATORY STRATEGY ON THE PART OF THE ASSESSEE, BUT FOR THE REASON OF A BONAFIDE MISTAKE ON THE PART OF THE MEMBER O F A STAFF WHO KEPT THE ORDER WITH HIMSELF, 8 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 THEREFORE, THE DELAY IN FILING OF THE APPEAL IN ALL FAIRNESS MAY THEREIN BE CONDONED. PER CONTRA, THE LD. D.R VEHEMENTLY OBJECTED TO THE CONDONATION OF DELAY IN FILING OF THE APPEAL BY THE ASSESSEE. IT WAS VEHEMEN TLY SUBMITTED BY THE LD. D.R THAT THE RELIANCE PLACED BY THE ASSESSEE ON THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF RAMNATH SAO (SUPRA) WAS MISCONCEIVED, AS THE SAID JUDGMENT WAS PASSED IN THE CASE OF AN INDIVIDUAL, WHILE FOR THE PRESENT ASSE SSEE WAS A PRIVATE LIMITED COMPANY WHICH HAD AT ITS DISPOSAL THE ASSISTANCE OF THE CHARTERED ACCOUNTANTS/ LAWYERS. IT WAS AVERRED BY THE LD. D.R THAT THE INORDINATE DELAY OF 658 DAYS IN FILING OF THE PRESENT APPEAL COULD NOT BE SAID TO BE BONAFIDE IN NATUR E, AS IT WAS BEYOND COMPREHENSION THAT AS TO HOW THE ASSESSEE REMAINED UNAWARE OF THE ORDER OF THE CIT(A) FOR SUCH A LONG PERIOD. IT WAS SUBMITTED BY THE LD. D.R THAT AS THE APPLICATION FILED BY THE ASSESSEE FOR CONDONATION OF DELAY DID NOT MERIT ACCEPTANC E, THEREFORE, THE APPEAL OF THE ASSESSEE WAS LIABLE TO BE DISMISSED ON THE SAID COUNT ITSELF. THE LD. A.R IN HIS REJOINDER SUBMITTED THAT THE MATERIAL FACT WHICH WOULD PROVE THE BONAFIDES OF THE ASSESSEE AS REGARDS THE DELAY INVOLVED IN FILING OF THE PRESE NT APPEAL, COULD SAFELY BE GATHERED FROM THE FACT THAT ON THE SAME ISSUE INVOLVED IN THE PRESENT APPEAL, THE APPEALS OF THE ASSESSEE FOR THE IMMEDIATELY TWO PRECEDING YEARS, VIZ. A.Y(S) 2001 - 02 AND 2002 - 03 WERE ALREADY PENDING DISPOSAL BEFORE THE INCOME TA X APPELLATE TRIBUNAL. IT WAS SUBMITTED BY THE LD. A.R THAT THE ASSESSEE WOULD NOT HAVE GAINED IN DELAYING IN FILING OF THE PRESENT APPEAL, WHICH HAD OCCURRED FOR REASONS BEYOND ITS CONTROL. 8. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD IN CONTEXT OF THE DELAY INVOLVED IN FILING OF THE PRESENT APPEAL BEFORE US. WE FIND SUBSTANTIAL FORCE IN THE CONTENTION OF THE LD. A.R THAT THE DELAY OF 658 DAYS INVOLVED IN FILING OF THE PRESENT APPEAL HAD OCCURRED ON ACCOUNT OF AN INADVERTENT MISTAKE ON THE PART OF THE SHRI PRAVIN KADAM, DEPUTY MANAGER (TAXATION) OF THE HOLDING COMPANY OF THE ASSESSEE, VIZ. HATHWAY CABLE DATACOM LIMITED, WHO ON ACCOUNT OF BONAFIDE MISTAKE ON HIS PART HAD 9 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 FAILED TO DELIVER THE ORDER OF THE CIT(A) FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y 2003 - 04 TO THE CHARTERED ACCOUNTANT FOR TAKING THE NECESSARY ACTION. WE FIND THAT THE FACTS AS HAD BEEN DEPOSED BY THE MANAGING DIRECTOR OF THE ASSESSEE, VIZ. SHRI VINEET GARG ARE FOUND DUL Y SUPPORTED BY THE AFFIDAVIT OF SHRI PRAVIN KADAM (SUPRA), WHO HAD CATEGORICALLY ADMITTED THE FACT THAT HE HAD INADVERTENTLY FAILED TO DELIVER THE ORDER OF THE CIT(A) TO THE CHARTERED ACCOUNTANT. WE ARE OF THE CONSIDERED VIEW THAT KEEPING IN VIEW THE AFORE SAID FACTS, COUPLED WITH THE FACT THAT ON THE SAME ISSUE WHICH WAS INVOLVED IN THE CASE OF THE ASSESSEE FOR THE IMMEDIATELY TWO PRECEDING YEARS, VIZ. A.Y 2001 - 02 AND A.Y: 2002 - 03, THE APPEALS OF THE ASSESSEE WERE PENDING DISPOSAL BEFORE THE TRIBUNAL, THERE FORE, IT CAN SAFELY BE CONCLUDED THAT THE ASSESSEE WOULD NOT HAVE BENEFITED FROM DELAYING THE FILING OF THE PRESENT APPEAL BEFORE US. WE ARE OF CONSIDERED VIEW THAT KEEPING IN VIEW THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF RAMNATH SAO VS. GO BARDHAN SAO (AIR 2002 SUPREME COURT 1201) IT CAN SAFELY BE CONCLUDED THAT NOW WHEN THE EXPLANATION OF THE ASSESSEE IN RESPECT OF THE DELAY IN FILING OF THE APPEAL BEFORE US DOES NOT SMACK OF MALAFIDES OR A DILATORY STRATEGY ON THE PART OF THE ASSESSEE, THE REFORE, THE SAID EXPLANATION CANNOT BE MERELY TURNED DOWN FOR THE REASON THAT DELAY IS INVOLVED IN FILING OF THE APPEAL. WE FIND THAT A SIMILAR VIEW WAS EARLIER ALSO TAKEN BY THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATH IJI AND OTHERS (1987) 167 ITR 471 (SC). THE HON BLE APEX COURT IN THE AFORESAID CASE HAD CONCLUDED THAT A SUFFICIENT CAUSE FOR THE PURPOSE OF CONDONATION OF DELAY SHOULD BE INTERPRETED WITH A VIEW TO DO EVEN ENDED JUSTICE ON MERITS IN PREFERENCE TO AN APP ROACH WHICH SCUTTLES A DECISION ON MERITS. WE ARE NOT PERSUADED TO BE IN AGREEMENT WITH THE VIEW OF THE LD. D.R THAT AS THE CASE BEFORE THE HON BLE SUPREME COURT IN THE CASE OF RAMNATH SAO (SUPRA) WAS THAT OF AN INDIVIDUAL UNLIKE THAT OF THE ASSESSEE WHICH IS CASE OF A COMPANY HAVING THE ADVANTAGE OF ASSISTANCE OF THE PROFESSIONALS, THEREFORE, THE SAME WOULD NOT COME TO THE ASSISTANCE OF THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT THE REVENUE WHILE RAISING THE SAID CONTENTION HAD LOST SIGHT OF 10 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 THE REAS ON LEADING TO THE DELAY FILING OF THE PRESENT APPEAL. THE DELAY AS EXPLAINED BY THE ASSESSEE HAD ADMITTEDLY OCCASIONED ON ACCOUNT OF FAILURE ON THE PART OF AN INDIVIDUAL EMPLOYEE TO DELIVER THE ORDER PASSED BY THE CIT(A) TO THE CHARTERED ACCOUNTANT. WE ARE OF THE CONSIDERED VIEW THAT AS THE ASSESSEE HAD CAME FORTH WITH A BONAFIDE EXPLANATION AS REGARDS THE DELAY IN FILING OF THE APPEAL BEFORE US, THEREFORE, THE SAME MERITS ACCEPTANCE ON OUR PART. WE MAY HEREIN OBSERVE THAT THE LD. D.R HAD FAILED TO PLACE ON RECORD ANY MATERIAL WHICH COULD PERSUADE US TO CONCLUDE THAT THE EXPLANATION OF THE ASSESSEE AS REGARDS THE DELAY IN FILING OF THE APPEAL WAS NOT TO BE ACCEPTED. WE THUS KEEPING IN VIEW THE AFORESAID FACTS CONDONE THE DELAY OF 658 DAYS INVOLVED IN FILING OF THE PRESENT APPEAL. 7. THE COORDINATE BENCH HAS CONDONED THE DELAY OF 658 DAYS IN THE ASSESSEES CASE FOR THE A.Y. 2003 - 04 AND THE REASONS FOR DELAY IN THE PRESENT CASE ARE IDENTICAL, HENCE, RESPECTFULLY FOLLOWING THE FINDINGS OF THE COORDINATE BENCH, WE CONDONE THE DELAY OF 661 DAYS IN FILING THE PRESENT APPEAL IN THE INTEREST OF JUSTICE AND ALLOWED THE LD. COUNSEL FOR THE ASSESSEE TO ARGUE ITS CASE ON MERITS. 8. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAS PASSED THE O RDER U/S 201 (1) AND 201(IA) BEYOND A PERIOD OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS U/S 201 (1) WERE INITIATED. HENCE, THE ORDER IS NOT SUSTAINABLE BEING BARRED BY LIMITATION . THE LD. COUNSEL FURTHER SUBMITTED THAT THE MUMB AI BENCH OF THE TRIBUNAL HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE, ITA NO. 4112/MUM/2016 FOR THE A.Y. 2003 - 04. SINCE, THE FACTS OF THE PRESENT CASE AND THE ISSUES INVOLVED ARE IDENTICAL TO THAT OF THE APPEAL PERT AINING TO THE ASSESSMENT YEAR 2003 - 04 AFORESAID, THE IMPUGNED ORDER IS LIABLE TO BE QUASHED 9. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE ORDER PASSED BY THE AUTHORITIES BELOW SUBMITTED THAT SINCE THERE IS NO TIME 11 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 LIMIT PRE SCRIBED UNDER THE ACT, THERE IS NO LEGAL INFIRMITY IN THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) TO INTERFERE WITH. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE MATERIAL ON RECORD INCLUDING THE DECISION DATED 31.01.2018 RENDERED BY THE COORDINATE BENCH IN THE ASSESSEES OWN CASE FOR THE A.Y. 2003 - 04. THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE AND QUASHED THE IMPUGNED ORDER HOLDING AS UNDER: - 10. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH TH E PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE INVOLVED IN THIS CASE IS SQUARELY COVERED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) VS. MAHINDRA & MAHINDRA LTD. (2014) 365 ITR 560 (BOM). WE FIND THAT THE HON BLE HIGH COURT HAD HELD THAT EVEN THOUGH SEC. 201 DOES NOT PRESCRIBE ANY LIMITATION PERIOD FOR AN ASSESSEE TO BE DECLARED AS AN ASSESSEE IN DEFAULT, YET THE REVENUE IS REQUIRED TO EXERCISE THE POWERS IN THAT REGARD WITHIN A REASONABLE TIME. THE HON BLE HI GH COURT IN THE BACKDROP OF ITS AFORESAID OBSERVATIONS HAD UPHELD THE ORDER OF THE TRIBUNAL BY OBSERVING AS UNDER: 30 OUR ATTENTION HAS ALSO BEEN INVITED TO TWO JUDGMENTS OF THE HONOURABLE DELHI HIGH COURT WHICH ARE ON THE SAME PRINCIPLE AND AS TO WHETH ER IN THE ABSENCE OF ANY TIME LIMIT THE PROCEEDINGS UNDER SECTIONS 201 AND 201(1A) OF THE INCOME TAX ACT, 1961 COULD BE INITIATED AT ANY INCOME TAX V/S NHK JAPAN BROADCASTING CORPORATION REPORTED IN (2008) 305 ITR 137 (DELHI), THE DELHI HIGH COURT UPHELD T HE VIEW OF THE TRIBUNAL AND DISMISSED THE REVENUE'S APPEAL [COMMISSIONER OF INCOME TAX V/S HUTCHISON ESSAR TELECOME LTD. REPORTED IN (2010) 323 ITR 230 (DELHI)]. 12 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 31 IN THE CASE OF NHK JAPAN BROADCASTING CORPORATION (SUPRA), THE HONOURABLE MR. JUSTICE MAD AN B. LOKUR (AS HIS LORDSHIP THEN WAS) SPEAKING FOR THE BENCH ANSWERED THE QUESTION DIRECTLY POSED BEFORE US IN THE FOLLOWING TERMS: THERE IS NO DISPUTE THAT SECTION 201 OF THE ACT DOES NOT PRESCRIBE ANY LIMITATION PERIOD FOR THE ASSESSEE BEING D ECLARED AS AN ASSESSEE IN DEFAULT. LEARNED COUNSEL FOR THE REVENUE RELIED UPON BHARAT STEEL TUBES LTD. V. STATE OF HARYANA (1988) 70 STC 122 (SC) TO CONTEND THAT NO PERIOD OF LIMITATION CAN BE PRESCRIBED IN A SITUATION SUCH AS THE PRESENT FOR INITIATING P ROCEEDINGS. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON STATE OF PUNJAB V. BHATINDA DISTRICT COOP. MILK PRODUCERS UNION LTD. [2007] 11 SCC 363 : [2007] 9 RC 637 TO CONTEND THAT IF NO PERIOD OF LIMITATION IS PRESCRIBED, A STATUTORY AUTHORITY MUST EXERCISE ITS JURISDICTION WITHIN A REASONABLE PERIOD. WHAT SHOULD BE THE REASONABLE PERIOD DEPENDS UPON THE NATURE OF THE STATUTE, RIGHTS AND LIABILITIES THERE UNDER AND OTHER RELEVANT FACTORS. RELYING UPON THIS DECISION, IT IS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE THAT SINCE SECTION 201 OF THE ACT DOES NOT PRESCRIBE ANY PERIOD OF LIMITATION FOR INITIATING OR FOR COMPLETING PROCEEDINGS IN DECLARING THE ASSESSEE AS AN ASSESSEE IN DEFAULT, EXERCISE OF JURISDICTION SHOULD COMMENCE INSOFAR AS THE STATUTORY AUTHO RITY IS CONCERNED WITHIN A REASONABLE PERIOD OF TIME. WE ARE UNABLE TO AGREE WITH LEARNED COUNSEL FOR THE REVENUE INASMUCH AS THE DECISION RELIED UPON BY HIM DEALS WITH REASONABLE TIME FOR COMPLETING THE ASSESSMENT OR FOR COMPLETING THE TASK ON HAND. I N BHARAT STEEL TUBES LTD. (1988) 70 STC 122 (SC) THE QUESTION THAT AROSE BEFORE THE COURT (AND WHICH HAS BEEN STATED ON PAGE 130 OF THE REPORT) IS WHETHER AN ORDER OF ASSESSMENT UNDER SECTION 11(3) OF THE PUNJAB GENERAL SALES TAX ACT, 1948 OR SECTION 28(3) OF THE HARYANA 13 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 GENERAL SALES TAX ACT, 1973 COULD NOW BE COMPLETED OR IT WOULD BE BARRED BY LIMITATION. IN THAT CASE, THE ASSESSMENT PROCEEDINGS HAD BEEN UNDULY DELAYED AND THE SUPREME COURT CAME TO THE CONCLUSION THAT FOR COMPLETING THE ASSESSMENT PROCEED INGS THERE IS NO PERIOD OF LIMITATION PRESCRIBED AND THAT WOULD DEPEND UPON THE FACTS OF EACH CASE. CONSIDERING THE FACTS OF THE CASE, THE SUPREME COURT GAVE A DIRECTION TO THE ASSESSING AUTHORITY TO COMPLETE ALL THE PENDING ASSESSMENTS WITHIN A PERIOD OF FOUR MONTHS FROM THE DATE OF DELIVERY OF THE JUDGMENT. INSOFAR AS BHATINDA DISTRICT COOP. MILK PRODUCERS UNION LTD. [2007] 9 RC 637 : 11 SCC 363 IS CONCERNED, THE QUESTION THAT AROSE BEFORE THE SUPREME COURT WAS REGARDING INITIATION OF PROCEEDINGS BY EXE RCISE OF JURISDICTION BY THE STATUTORY AUTHORITY. THE SUPREME COURT HELD THAT EXERCISE OF JURISDICTION MUST BE WITHIN A REASONABLE PERIOD OF TIME AND CONSIDERING THE PROVISIONS OF THE PUNJAB GENERAL SALES TAX ACT, 1948, IT WAS HELD THAT A REASONABLE PERIOD OF TIME FOR INITIATING PROCEEDINGS WOULD BE FIVE YEARS. THERE IS A QUALITATIVE DIFFERENCE BETWEEN BHARAT STEEL TUBES LTD. [1988] 70 STC 122 (SC) AND BHATINDA DISTRICT COOP. MILK PRODUCERS UNION LTD. (2007) 9 RC 637 : 11 SCC 363. IN THE FORMER CASE, THE QUESTION PERTAINED TO COMPLETION OF PROCEEDINGS, WHILE IN THE LATTER CASE IS PERTAINED TO INITIATION OF PROCEEDINGS. WE ARE CONCERNED WITH INITIATION OF PROCEEDINGS. INSOFAR AS THE INCOME TAX ACT IS CONCERNED, OUR ATTENTION HAS BEEN DRAWN TO SECTION 153(1 )(A) THEREOF WHICH PRESCRIBES THE TIME LIMIT FOR COMPLETING THE ASSESSMENT, WHICH IS TWO YEARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSESSABLE. IT IS WELL KNOWN THAT THE ASSESSMENT YEAR FOLLOWS THE PREVIOUS 14 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 YEAR AND, THEREFORE, THE TIME LIMIT WOULD BE THREE YEARS FROM THE END OF THE FINANCIAL YEAR. THIS SEEMS TO BE A REASONABLE PERIOD AS ACCEPTED UNDER SECTION 153 OF THE ACT, THOUGH FOR COMPLETION OF ASSESSMENT PROCEEDINGS. THE PROVISIONS OF REASSESSMENT ARE UNDER SECTIONS 147 AND 148 OF THE ACT AND THEY ARE ON A COMPLETELY DIFFERENT FOOTING AND, THEREFORE, DO NOT MERIT CONSIDERATION FOR THE PURPOSES OF THIS CASE. EVEN THOUGH THE PERIOD OF THREE YEARS WOULD BE A REASONABLE PERIOD AS PRESCRIBED BY SECTION 153 OF THE ACT FOR COM PLETION OF PROCEEDINGS, WE HAVE BEEN TOLD THAT THE INCOME TAX APPELLATE TRIBUNAL HAS, IN A SERIES OF DECISIONS, SOME OF WHICH HAVE BEEN MENTIONED IN THE ORDER WHICH IS UNDER CHALLENGE BEFORE US, TAKEN THE VIEW THAT FOUR YEARS WOULD BE A REASONABLE PERIOD O F TIME FOR INITIATING ACTION, IN A CASE WHERE NO LIMITATION IS PRESCRIBED. THE RATIONALE FOR THIS SEEMS TO BE QUITE CLEAR IF THERE IS A TIME LIMIT FOR COMPLETING THE ASSESSMENT, THEN THE TIME LIMIT FOR INITIATING THE PROCEEDINGS MUST BE THE SAME, IF NOT LESS. NEVERTHELESS, THE TRIBUNAL HAS GIVEN A GREATER PERIOD FOR COMMENCEMENT OR INITIATION OF PROCEEDINGS. 32 MR. SURESH KUMAR SUBMITTED BEFORE US THAT THE DELHI HIGH COURT JUDGMENT DOES NOT TAKE NOTE OF THE PRINCIPLE THAT WHEN THERE IS NO LIMITATION P RESCRIBED BY THE STATUTE, THE COURT CANNOT READ INTO THE PROVISION ANY TIME LIMIT OR RESTRICTION. IN THAT REGARD HE RELIED UPON THE JUDGMENT OF THE HONOURABLE SUPREME COURT IN THE CASE OF AJAIB SINGH V/S SIRHIND COOPERATIVE MARKETING CUM PROCESSING SERVICE SOCIETY LIMITED AND ANOTHER REPORTED IN (1999) 6 SCC 82. THE ISSUE BEFORE THE HONOURABLE SUPREME COURT IN THAT CASE WAS WHETHER THERE IS ANY PERIOD OF LIMITATION PRESCRIBED FOR INITIATION OF PROCEEDINGS UNDER SECTION 33C(2) OF THE INDUSTRIAL DISPUTES ACT, 1947. IN THAT REGARD THE HONOURABLE SUPREME COURT NOTED THE FACTUAL POSITION, NAMELY, 15 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 THAT SERVICES OF WORKMAN WERE TERMINATED ON 16.07.1974. HE HAD ISSUED THE NOTICE OF DEMAND ONLY ON 18.12.1981. HOWEVER, IT WAS NOT DISPUTED THAT NO PLEA REGARDING DELAY WAS RAISED BY THE MANAGEMENT BEFORE THE LABOUR COURT. IT WAS ALSO ACKNOWLEDGED THAT ARTICLE 137 OF THE LIMITATION ACT, 1963 HAS NOT BEEN SPECIFICALLY MADE APPLICABLE TO THE PROCEEDINGS UNDER THE INDUSTRIAL DISPUTES ACT, 1947 SEEKING REFERENCE OF INDUSTRIAL DISPUTES TO THE LABOUR COURT. THEREFORE, NEITHER THIS PROVISION NOR ANY PRINCIPLE INCORPORATED THEREIN IS APPLICABLE TO THE PROCEEDINGS UNDER THE INDUSTRIAL DISPUTES ACT, 1947 AND THAT IS HOW THE HONOURABLE SUPREME COURT PROCEEDED TO ANALYZE THE AMBIT AND SCOPE OF THE PROCEEDINGS UNDER THE SPECIAL PROVISION, NAMELY, A REFERENCE BY THE CONCERNED WORKMAN UNDER THE INDUSTRIAL DISPUTES ACT, 1947. THE JUDGMENT OF THE HONOURABLE SUPREME COURT DEALS WITH A CASE WHERE ANY PROVISION IN THE NATURE OF LIMITATION OR O UTER LIMIT IS PRESCRIBED FOR REFERENCE UNDER THE INDUSTRIAL DISPUTES ACT, 1947. THE HONOURABLE SUPREME COURT WAS NOT DEALING WITH A CASE OF EXERCISE OF POWERS ENABLING REOPENING OF ASSESSMENT UNDER THE INCOME TAX ACT, 1961 OR ANY TAXING STATUTE. IN FACT, I T WAS NOT DECIDING A CASE CONCERNED WITH INVOKING OF ANY SUOMOTU POWERS OR REOPENING OF ASSESSMENT FINALIZED UNDER THE TAX LAW. THEREFORE, THIS JUDGMENT IS CLEARLY DISTINGUISHABLE ON FACTS. 33 IF ONE CAREFULLY PERUSES SECTION 201(1) AND 201(1A) OF THE INCOME TAX ACT, 1961, THEN, THE PRINCIPLE LAID DOWN IN THE DELHI HIGH COURT DECISIONS IN NHK JAPAN BROADCASTING CORPORATION AND HUTCHISON ESSAR TELECOM (SUPRA) WOULD SQUARELY APPLY. 34 THE SECTION 201 OF THE INCOME TAX ACT, 1961 READS AS UNDER: 201. CO NSEQUENCES OF FAILURE TO DEDUCT OR PAY: (1) WHERE ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF A COMPANY, (A) WHO IS REQUIRED TO DEDUCT ANY SUM IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT; OR 16 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 (B) REFERRED TO IN SUBSECTION (1A) OF SECTION 192, B EING AN EMPLOYER, DOES NOT DEDUCT, OR DOES NOT PAY, OR AFTER SO DEDUCTING FAILS TO PAY, THE WHOLE OR ANY PART OF THE TAX, AS REQUIRED BY OR UNDER THIS ACT, THEN, SUCH PERSON, SHALL, WITHOUT PREJUDICE TO ANY OTHER CONSEQUENCES WHICH HE MAY INCUR, BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX: [PROVIDED THAT ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF A COMPANY, WHO FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER ON THE SUM PAID TO A RESIDE NT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF SUCH RESIDENT (I) HAS FURNISHED HIS RETURN OF INCOME UNDER SECTION 139; (II) HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME IN SUCH RETURN OF INCOME; AND (III) HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HIM IN SUCH RETURN OF INCOME, AND THE PERSON FURNISHES A CERTIFICATE TO THIS EFFECT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED:] [PROVIDED FURTHER THAT] NO PENALTY SHALL BE CHARGED UNDER SECTION 221 FROM SUCH PERSON, UNLESS THE ASSESSING OFFICER IS SATISFIED THAT SUCH PERSON, WITHOUT GOOD AND SUFFICIENT REASONS, HAS FAILED TO DEDUCT AND PAY SUCH TAX.] [(1A) WITHOUT PREJUDICE TO THE PROVISIONS OF SUBSECTION (1), IF ANY SUCH PERSON, PRINCIPAL OFFICER OR COMPANY AS IS REFERRED TO IN THAT SUBSECTION DOES NOT DEDUCT THE WHOLE OR ANY PART OF THE TAX OR AFTER DEDUCTING FAILS TO PAY THE TAX AS REQUIRED BY OR UNDER THIS ACT, HE OR IT SHALL BE LIABLE TO PAY SIMPLE IN TEREST, (I) AT ONE PER CENT. FOR EVERY MONTH OR PART OF A MONTH ON THE AMOUNT OF SUCH TAX FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTIBLE TO THE DATE ON WHICH SUCH TAX IS DEDUCTED; AND (II) AT ONE AND ONE HALF PER CENT. FOR EVERY MONTH OR PART OF A MONTH O N THE AMOUNT OF SUCH TAX FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTED TO THE DATE ON WHICH SUCH TAX IS ACTUALLY PAID, AND SUCH INTEREST SHALL BE PAID BEFORE FURNISHING THE STATEMENT IN ACCORDANCE WITH THE PROVISIONS OF SUB SECTION (3) OF SECTION 17 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 200:] [PR OVIDED THAT IN CASE ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF A COMPANY FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDEN T BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SUBSECTION (1), THE INTEREST UNDER CLAUSE (I) SHALL BE PAYABLE FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTIBLE TO THE DATE OF FURNISHING OF RETURN OF INCOME BY SUCH RESIDENT.] (2) W HERE THE TAX HAS NOT BEEN PAID AS AFORESAID AFTER IT IS DEDUCTED, THE AMOUNT OF THE TAX TOGETHER WITH THE AMOUNT OF SIMPLE INTEREST THEREON REFERRED TO IN SUB SECTION (1A) SHALL BE A CHARGE UPON ALL THE ASSETS OF THE PERSON, OR THE COMPANY, AS THE CASE MAY BE, REFERRED TO IN SUBSECTION (1). [(3) NO ORDER SHALL BE MADE UNDER SUBSECTION (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 GIVEN, IN ANY OTHER CASE: PROVIDED THAT SUCH ORDER FOR A FINANCIAL YEAR COMMENCING ON OR BEFORE THE 1ST DAY OF APRIL, 2007 MAY BE PASSED AT ANY TIME ON OR BEFORE THE 31ST DAY OF MARCH, 2011. (4) THE PROVISIONS OF SUB CLAUSE (II) OF SUBSECTION (3) OF SECTION 153 AND OF EXPLANATION 1 TO SECTION 153 SHALL, SO FAR AS MAY, APPLY TO THE TIME LIMIT PRESCRIBED IN SUBSECTION (3).] [EXPLANATION. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'ACCOUNTANT' SHALL HAVE THE MEANING ASSIGNED TO IT IN THE EXPLANATION TO SUBSECTION (2 ) OF SECTION 288.] 35. ONCE SAME PROVISIONS ARE INVOKED IN THE PRESENT CASE, THEN, THE HONOURABLE DELHI HIGH COURT, WITH RESPECT, RIGHTLY CONCLUDED THAT THOUGH SECTION 201 DOES NOT PRESCRIBE ANY LIMITATION PERIOD FOR THE ASSESSEE BEING DECLARED AS AN ASS ESSEE IN DEFAULT YET THE REVENUE WILL HAVE TO EXERCISE THE POWERS IN THAT REGARD WITHIN A REASONABLE TIME. IN SUCH 18 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 CIRCUMSTANCES WE ARE OF THE VIEW THAT THE TRIBUNAL'S ORDER IN THIS CASE DOES NOT SUFFER FROM ANY ERROR OF LAW APPARENT ON THE FACE OF RECORD OR PERVERSITY WARRANTING OUR INTERFERENCE IN APPELLATE JURISDICTION. 36 WE ARE ALSO SHOWN THE JUDGMENT OF THE CALCUTTA HIGH COURT IN THE CASE OF BHURA EXPORTS LTD. V/S INCOME TAX OFFICER (TDS), WARD 57(2) IN G.A. NO.1319 AND ITAT NO.118 AND IT APPEAL NO. 116/2011 AND IT 1163/2011 DECIDED ON 30.08.2011. WITH RESPECT AND FOR THE REASONS INDICATED BY US ABOVE WE CANNOT AGREE WITH THE VIEW TAKEN BY THE DIVISION BENCH OF THE CALCUTTA HIGH COURT. THAT DECISION OVERLOOKS THE FUNDAMENTAL PRINCIPLES NOTED ABOVE. TH EY NEED NOT BE REITERATED HERE. WE FURTHER FIND THAT INVOLVING THE IDENTICAL FACTS THE COORDINATE BENCH OF THE TRIBUNAL IN THE ASSESSES OWN CASE FOR THE A.YS. 2001 - 02 AND 2002 - 03, MARKED AS ITA NO. 6996/MUM/2014 AND ITA NO. 4261/MUM/2014, VIDE ITS ORDER DATED 07.09.2016, TAKING COGNIZANCE OF THE FACT THAT THOUGH THE NOTICE U/SS. 201(1)/201(1A) WAS ISSUED BY THE A.O ON 23.09.2003, HOWEVER, AS THE RESPECTIVE ORDERS U/SS. 201(1)/201(1A) WERE PASSED BY THE A.O ON 28.03.2011, WHICH WERE BEYOND A PERIOD OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS UNDER SEC. 201 WERE INITIATED, THEREFORE, THE SAME WERE BARRED BY LIMITATION. WE THUS KEEPING IN VIEW THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF DIRECTOR OF INCOME TAX ( INTERNATIONAL TAXATION) VS. MAHINDRA & MAHINDRA LTD. (2014) 365 ITR 560 (BOM) AND FINDING OURSELVES TO BE IN AGREEMENT WITH THE VIEW TAKEN BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE AFOREMENTIONED YEARS, THEREFORE, ARE OF THE CONSIDERED VIEW THAT THE ORDER PASSED BY THE A.O UNDER SEC. 201(1A) AS ON 28.03.2011 BEING SUBSTANTIALLY BEYOND THE PERIOD OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS UNDER SEC. 201(1)/201(1A) WERE INITIATED, THEREFORE, THE RESPECTIVE ORDERS PASSED BY THE A.O U/SS. 201(1)/201(1A) ARE CLEARLY BARRED BY LIMITATION. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS SET ASIDE THE ORDER OF THE CIT(A) AND QUASH THE ORDER PAS SED B Y THE A.O U/SS. 201(1)/201A) OF THE ACT. 19 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 11. IN THE PRESENT CASE, THE T AX RECOVERY OFFICER PASSED THE ORDER U/S 201 AND 201 (IA) OF THE ACT ON 28.03.2011 , WHICH IS BEYOND THE PERIOD OF ONE YEAR FROM THE END OF THE FINANCIA L YEAR IN WHICH THE PROCEEDINGS WERE INITIATED AS THIS APPEAL PERTAINS TO THE ASSESSMENT YEAR 2001 - 02. WE FURTHER NOTICE THAT THE COORDINATE BENCH HAS QUASHED THE IMPUGNED ORDER BY FOLLOWING THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) VS. MAHINDRA AND MAHINDRA LTD. (2014) 635 ITR 560 (BOM) . SINC E, THE FACTS OF THE CASE PERTAINING TO THE A.Y. 2003 - 04 ARE IDENTICAL TO THE FACTS OF THE PRESENT CASE AND THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE, WE RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH ALLOW THE LEGAL GROUND RAISED BY THE ASSESSEE AND QUASH THE ORDER PASSED BY THE AO U/S 201 (1) AND 201 (IA) OF THE ACT. 12. SINCE, WE HAVE QUASHED THE ORDER PASSED U/S 201 (1) AND 201 (IA) OF THE ACT, THE OTHER GROUNDS OF APPEAL HAVE BECOME INFRUCTUOUS, HENCE, THE SAME DO NOT REQUIRE ADJUDICATION. ITA NO. 4049/MUM/2016 (ASSE SSMENT Y EAR: 2004 - 2005 ) THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE ASSESSES APPEAL FOR THE A.Y. 2001 - 02 DISCUSSED ABOVE. IN THE PRESENT CASE ALSO, THE LD. CIT (A) HAS CONFIRMED THE ORDER PASSED BY THE AO U/S 201 (1 ) AND 201 (IA) OF THE ACT AGAINST WHICH THE ASSESSEE HAS FILED THE PRESENT APPEAL. 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUND OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 1. THE APPELLANT SUBMITS THAT THE ORDER UNDER SECTION 201 ( 1) AND 201 (1A) PASSED BY THE ASSESSING OFFICER BEYOND A PERIOD OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH PROCEEDINGS UNDER SECTION 201 (1) WERE INITIATED WAS BARRED BY LIMITATION. T HE APPELLANT SUBMITS THAT EVEN IF NO PERIOD OF LIMITATION IS 20 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 PRESCRIBED, THE STATUTORY POWERS MUST BE EXERCISED WITHIN A REASONABLE TIME. 2. WITHOUT PREJUDICE TO WHAT STATED ABOVE, THE APPELLANT SUBMIT THAT THE ORDER UNDER SECTIONS 201 (1) AND 201 (1A) PASSED BY THE ASSESSING BEYOND A PERIOD OF FOUR YEARS FROM THE END OF FINANCIAL WAS BARRED BY LIMITATION. THE APPELLANT SUBMITS THAT EVEN IF NO PERIOD OF LIMITATION IS PRESCRIBED, THE STATUTORY POWERS MUST BE EXERCISED WITHIN A REASONABLE TIME. 3. (A) THE APPELLANT SUBMITS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ACTION OF THE LEARNED TAX RECOVERY OFFICER (HEREINAFTER REFERRED TO AS THE ASSESSING OFFICER) THAT PAYMENT FOR PAY CHANNEL COST AMOUNTING TO RS. 2,97,92,000 / - AND FOR F EED CHARGES AMOUNTING TO RS. 24,59,510 MADE TO DISTRIBUTOR OF SIGNAL IS A CONTRACT FOR WORK AND LIABLE FOR DEDUCTION UNDER SECTION 194C OF THE ACT AND ACCORDINGLY ERRED IN HOLDING THAT THE ASSESSEE IS AN ASSESSEE IN DEFAULT UNDER SECTION 201 (1) OF THE ACT . (B) THE APPELLANT SUBMITS THAT AS REGARDS PAYMENTS FOR COST OF PAY CHANNELS, THE PAYEES MERELY DISTRIBUTE SIGNALS TO THE APPELLANT AND ACCORDINGLY, THERE IS NO QUESTION OF ANY INVOLVEMENT OF WORK. (C) THE APPELLANT SUBMITS THAT THE PAYMENT MADE FOR PROCUREMENT OF SIGNALS ARE NOT TO ANY BROADCASTERS OR TELECASTERS AND ACCORDINGLY, THE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE AND THEREFORE NO TAX WAS REQUIRED TO BE DEDUCTED AT SOURCE. 4. (A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN U PHOLDING THE ACTION OF THE ASSESSING OFFICER OF LEVYING INTEREST UNDER SECTION 201 (1A) OF THE ACT AMOUNTING TO RS. 6,08,319 / - ON THE GROUND THAT PAYMENT OF INTEREST IS MANDATORY. (B) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW IN HOLDIN G THAT THOUGH THE ASSESSEE SHOULD NOT BE HELD TO BE AN ASSESSEE IN DEFAULT, THE APPELLANT WOULD BE LIABLE TO INTEREST UNDER SECTION 201 (1A) OF THE ACT FOR THE PERIOD COMMENCING FROM THE DATE ON WHICH TAX WAS DEDUCTED TO THE DATE ON WHICH TAX IS ACTUALLY P AID. 21 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 5. THE APPELLANT SUBMITS THAT THE ASSESSING OFFICER BE DIRECTED: (I) ORDER UNDER SECTION 201 (1) AND 201 (1A) PASSED BEYOND ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH PROCEEDINGS UNDER SECTION 201 (1) WERE INITIATED WHICH IS BARRED BY LIMITATION AND SAME OUGHT TO BE CANCELLED. (II) ORDER UNDER SECTION 201 (1) AND 201 (1A) PASSED BEYOND FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH IS BARRED BY LIMITATION AND SAME OUGHT TO BE CANCELLED. (III) NOT TO TREAT THE PAYMENTS MADE BY THE APPELLANT TO THE DISTRIBUTORS OF SIGNALS (WHICH INCLUDES PAYMENT IN RESPECT OF FEED CHARGES) AS A CONTRACT FOR WORK FALLING WITHIN THE PURVIEW OF SECTION 194C OF THE ACT. (IV) TO DELETE THE LEVY OF TAX UNDER SECTION 201 (1) OF THE ACT AMOUNTING TO A S UM OF RS. 6,61,147 / - . (V) TO DELETE THE INTEREST LEVIED UNDER SECTION 201 (1A) OF THE ACT AMOUNTING TO A SUM OF RS. 6,08,319 / - AND TO MODIFY THE ORDER AS PER THE PROVISIONS OF THE LAW. 6. EACH OF THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT AND WITHOUT PREJ UDICE TO EACH OTHER. 3. THERE IS A DELAY OF 648 DAYS IN FILING THE PRESENT CASE. WE HAVE ALLOWED THE APPLICATION FOR CONDONATION OF DELAY IN THE ASSESSEES CASE FOR THE A.Y. 2001 - 02 BY FOLLOWING THE FINDINGS OF THE COORDINATE BENCH IN THE ASSESSEES OW N CASE FOR THE A.Y. 2003 - 04 . SINCE, THE REASONS FOR DELAY IN FILING THE PRESENT APPEAL ARE IDENTICAL TO THE REASONS FOR DELAY IN THE ASSESSEES CASE FOR THE A.Y. 2001 - 02 AFORESAID AND SINCE WE HAVE CONDONED THE DELAY OF 661 DAYS IN THE SAID CASE, CONSISTEN T WITH OUR FINDINGS, WE CONDONE THE DELAY OF 648 DAYS IN THE PRESENT CASE FOR THE SAME REASONS AND ALLOWED THE LD. COUNSEL TO ARGUE THE APPEAL ON MERITS. 4. THE ASSESSEE HAS RAISED THE LEGAL ISSUE THAT THE ORDER CONFIRMED BY THE LD. CIT (A) IS NOT SUSTAIN ABLE IN THE EYES OF LAW AS THE SAME HAS BEEN PASSED BEYOND LIMITATION PERIOD . SINCE, WE HAVE DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN APPEAL FOR THE ASSESSMENT YEAR 2001 - 02 22 ITA NO S . 4048 & 4049/MUM/2016 ASSESSMENT YEAR S : 2001 - 02 AND 2004 - 05 AFORESAID, BY FOLLOWING THE DECISION OF THE COO RDINATE BENCH RENDERED IN THE ASSESSEES OWN CASE FOR THE A.Y. 2003 - 04 AND SINCE THE FACTS OF THE CASE AND ISSUES INVOLVED IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS AND THE ISSUES INVOLVED IN THE ASSESSEES CASE FOR THE A.Y. 2001 - 02, CONSISTENT WITH OUR FINDINGS, WE ALLOW THE LEGAL GROUND RAISED BY THE ASSESSEE AND QUASH THE PROCEEDINGS U/S 201 (1) AND 201 (IA) OF THE ACT PASSED BY THE AO FOR THE SAME REASONS. 5. SINCE, WE HAVE QUASHED THE IMPUGNED ORDER PASSED BY THE AO, THE REMAINING GROUNDS OF A PPEAL DO NOT REQUIRE ADJUDICATION. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE FOR ASSESSMENT YEAR S 2001 - 2002 AND 2004 - 2005 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD DECEMBER, 2018 . SD/ - SD/ - ( B.R . BASKARAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 03 / 12 / 2018 ALINDRA PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI
