ALEO MANALI HYDRO POWER PVT. LTD., NOIDA V. ITO (TDS), NOIDA

ITA 4673/DEL/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7071 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 24-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AASISH SACHDEVA
• Keywords: Period of limitation; Retrospective amendment; TDS; Set aside
• Section: 194C; 201(1); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’ NEW DLEHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA No. 4673/Del/2018 Assessment Year: 2010-11 Aleo Manali Hydro Power Pvt. Ltd., vs. Income-tax Officer(TDS), B-173, Sector-41, Noida. Noida. PAN : AAECA3225E (Appellant) (Respondent) Appellant by : Shri Ved Jain, Advocate & Shri Aasish Sachdeva, CA Respondent by: Shri Ajay Kumar, Sr. DR Date of hearing: 29.11.2021 Date of order : 03.12.2021 ORDER PER K. NARASIMHA CHARY, J.M. Aggrieved by the order dated 25.09.2017 passed by the learned Commissioner of Income Tax (Appeals)-I, New Delhi (“Ld. CIT(A)”) for the assessment year 2010-11, Aleo Manali Hydro Power Pvt. Ltd (“the assessee”), preferred this appeal. 2. Brief facts of the case, as could be culled out from the record and the arguments, are that the assessee is a private limited company engaged in the business of power generation and the whole electricity generated by the assessee has been supplied to the Himachal Pradesh 2 State Electricity Board only. For assessment year 2010-11, the assessee declared an income of Rs. 1,44,79,210/-and paid the tax to the tune of Rs. 1,20,47,338/-under the provisions of section 115 JB of the Income Tax Act, 1961 (for short “the Act”). 3. During the year, the assessee reimbursed operation and maintenance charges to the tune of Rs. 16,60,601/- to Himachal Pradesh Electricity Board on actual basis, there was no element of profit involved in the above-mentioned charges/bills, and since according to the assessee, it is a case of reimbursement of actual expenses incurred by the Himachal Pradesh State Electricity Board, and not of the nature of payment covered by section 194C or section 194I of the Act the assessee did not deduct any TDS thereon. Assessee however, deducted TDS of various other parties and deposited the same to the Central government and it duly filed the regular statement of tax deduction at source under section 200 of the Act. Thereafter the learned Assessing Officer, pursuant to the directions given by the learned Commissioner of Income Tax (Appeals)-1, Noida, passed order dated 29/12/2016 under section 201(1) of the Act and section 201(1A) of the Act computing the demand of Rs.3,14,906/-which includes interest on the TDS in respect of the sum of Rs. 16,60,601/-. 4. When the assessee preferred appeal, challenging the order passed under section 201(1) and 201(1A) of the Act, Ld. CIT(A) held that as the payment was made in the financial year 2009-10, the limitation date according to the provisions of 201(3) of the Act by amendment by Finance Act of 2009 was 31/03/2016, but in view of the retrospective amendment to the provisions of section 201(3) of the Act by finance Act, 3 2012 limitation date got extended to 31/3/2017. On this premise Ld. CIT(A) held that the order dated 29/12/2016 was within limitation, and accordingly dismissed the appeal. 5. Aggrieved by such an action of the Ld. CIT(A), assessee is in appeal before us stating that the order passed under section 201(1) &201(1A) of the Act was barred by limitation in view of amendments made by successive Finance Acts. Ld. AR placed reliance on the amendments made to section 201 (3) of the Act by finance Act, 2009, finance Act, 2012 and finance Act 2014 and also the decision of the Hon’ble Gujarat High Court in the case of Tata Tele Services vs. Union of India (2016) 385 ITR 497 followed by the coordinate benches of the Tribunal in the cases of HCL technologies Ltd vs. ACIT 2020 (7) TMI 643-ITAT-Delhi and M/s Dish TV India Ltd vs. DCIT 2021 (1) TMI 681-ITAT-Delhi. 6. Ld. DR placed reliance on the orders of the authorities below and submitted that in view of the provisions of 201(1) of the Act (3) as amended by the finance Act, 2014 the impugned order passed under section 201(1) &201(1A)of the Act is well within limitation. 7. We have gone through the record in the light of the submissions made on either side. It is not in dispute that the assessee made the payments on 18/05/2009 and 01/09/2009 and filed the statements in the financial year 2009-10 itself whereas the impugned order under section 201(1) & 201(1A) of the Act was passed on 29/12/2016, which according to the assessee is barred by limitation. To appreciate the contention of the assessee we deem it just and necessary to reproduce the relevant portions of section 201(3) of the Act by various Finance Acts. 4 8. Relevant portion of section introduced by Finance (No. 2) Act, 2009 is reproduced hereunder: "(3) No order shall be made under sub-section (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 anytime 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) four 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. Section 201(3) of the Act as amended on 28/05/2012 by Finance Act, 2012 with retrospective effect from 01/04/2010 whereby the limitation was substituted from four years to six years for passing the order where the TDS statement had not been filed is as under: “ (6) in sub-section (3), in clause (ii), for the words "four years", the words "six years" shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 2010;” Subsequently Section 201(3) of the Act was again amended on 01/10/2014 by Finance (No. 2) Act, 2014 w.e.f. 01/10/2014 wherein Section 201 (3)(i) was omitted and accordingly, the distinction between cases where statement has been filed and such statements was not filed was removed and the amendment prescribed a common period of limitation i.e. seven years from the end of financial year in which payment was made. The relevant extract of the amendment is as under: In section 201 of the Income-tax Act, for sub-section (3), the following sub-section shall be substituted with effect from the 1st day of October, 2014, namely:— “(3) No order shall be made under sub-section (1) deeming a person to be an assessee in default for failure to deduct the 5 whole or any part of the tax from a person resident in India, at any time after the expiry of seven years from the end of the financial year in which payment is made or credit is given.”. 9. Therefore, in this case, the assessee, having been filed the statement of tax deducted at source for the quarter ending June, 2009 and September 2009, period of limitation under Section 201 (3)(i) of the Act as introduced by Finance (No. 2) Act, 2009 expired on 31/03/2012. According to the Section 201(3) of the Act as amended on 28/05/2012 by Finance Act, 2012 with retrospective effect from 01/04/2010 whereby the limitation was substituted from four years to six years for passing the order where the TDS statement had not been filed, the time limit as per section 201 (3)(ii) expires on 31.3.2016. However, since the assessee has filed the statements, the period of limitation is still applicable as 31.3.2012 to the assessee. Further, since the Finance Act, 2014 does not specifically provide that it has retrospective effect, the said amendment as on 01/ 10/2014 is prospective in nature. 10. This aspect was considered by the Hon’ble Gujarat High Court in the case of Tata Teleservices Versus Union Of India [2016] 385 ITR 497 wherein Hon’ble Court has held that: “15.00. Considering the law laid down by the Hon'ble Supreme Court in the aforesaid decisions, to the facts of the case on hand and more particularly considering the fact that while amending section 201 by Finance Act, 2014, it has been specifically mentioned that the same shall be applicable w.e.f. 1/10/2014 and even considering the fact that proceedings for F. Y. 2007-08 and 2008-09 had become time barred and/or for the aforesaid financial years, limitation under section 201(3)(i) of the Act had already expired on 31/3/2011 and 31/3/2012, respectively, much prior to the amendment in section 201 as amended by Finance Act, 2014 and therefore, as such a right has been accrued in favour of the assessee and considering the fact that wherever legislature 6 wanted to give retrospective effect so specifically provided while amending section 201(3) (ii) of the Act as was amended by Finance Act, 2012 with retrospective effect from 1/4/2010, it is to be held that section 201(3), as amended by Finance Act No.2 of 2014 shall not be applicable retrospectively and therefore, no order under section 201 (i) of the Act can be passed for which limitation had already expired prior to amended section 201(3) as amended by Finance Act No.2 of 2014. Under the circumstances, the impugned notices / summonses cannot be sustained and the same deserve to be quashed and set aside and writ of prohibition, as prayed for, deserves to be granted.” 11. Decision of Hon’ble Gujarat High Court was followed by the coordinate benches of Tribunal in the cases of HCL technologies (supra) and Dish TV India (supra). 12. In the case on hand, as stated above, the assessee has made the payments on 18.05.2009 & 01.09.2009 and filed the statements in FY 2009-10 itself and accordingly, the order under section 201 (1)/201 (1A) of the Act could not be passed beyond 31.3.2012 but, however, the order was passed on 29.12.2016 which is beyond the limitation date. Regarding the applicability of the amendment by Finance Act, 2014 wherein the distinction between cases where statement has been filed and such statements was not filed was removed and the amendment prescribed a common period of limitation i.e. seven years from the end of financial year in which payment was made, it is submitted that the said amendment is not from retrospective date nor does it specifically say that it is from retrospective effect as it was said at the time of amendment by Finance Act, 2014. Therefore, the said amendment as on 01/10/2014 is with prospective effect. 13. With this view of the matter we are of the considered opinion that 7 the impugned order passed under section 201(1)/201(1A) of the Act is barred by limitation. Since the assessee succeeds on technical ground, any discussion on merits would only be academic and, therefore, we avoid the same. Learned Assessing Officer is directed to delete the demand of Rs. 3,14,906/-raised pursuant to the order dated 29/12/2016 under section 201 (1)/201(1A) of the Act. 14. In the result, appeal of the assessee is allowed. Order pronounced in the open court on this the 3 rd day of December, 2012. Sd/- Sd/- (ANIL CHATURVEDI) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: /12/2021 ‘aks’