DCIT International Taxation 2(2), CHENNAI V. L&T Thales Technology Services Private Limited, CHENNAI

MA 108/CHNY/2020

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The case revolves around a Miscellaneous Application filed by the revenue against an earlier ITAT order that favored M/s L&T Thales Technology Services Pvt Ltd., concerning non-deduction of TDS on payments made to non-residents for the assessment year 2010-11. The revenue contended that the ITAT had erroneously applied the time limitation provisions of section 201(3) of the Income Tax Act, which are applicable to residents, to non-residents. The Tribunal acknowledged this mistake and recalled the previous order, setting the stage for a re-examination of the case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134799 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-03-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-03-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 04-08-2020
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: TDS
• Section: 201; 254(2)

Judgement Text

आयकर अपीलीय अिधकरण, ‘ए’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ᮰ी वी दुगाᭅ राव, ᭠याियक सद᭭य एवं ᮰ी मंजुनाथ. जी, लेखा सद᭭य के समᭃ BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA. G, HON’BLE ACCOUNTANT MEMBER Misc. Application No. 108/Chny/2020 [In ITA No.1157/Chny/2019] (िनधाᭅरणवषᭅ / Assessment Year: 2010-11) Deputy Commissioner of Income Tax, International Taxation -2(2), Chennai – 600 034. v. M/s. L&T Thales Technology Services Private Ltd., RR V Tower, 7 th Floor, 33A Developed Plots, SIDCO Industrial Estate, Guindy, Chennai – 600 032. [PAN: AACCT-4657-M] (ᮧाथᭅक /Petitioner) (ᮧ᭜यथᱮ/Respondent) ᮧाथᭅक कᳱ ओरसे/ Petitioner by : Shri.AR V Sreenivasan, Addl. CIT ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri. Ashik Shah, CA सुनवाई कᳱ तारीख/Date of Hearing : 10.03.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 10.03.2023 आदेश /O R D E R PER MANJUNATHA. G, ACCOUNTANT MEMBER: The revenue has filed present Miscellaneous Application u/s. 254(2) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) against order of the Tribunal in ITA No. 1157/Chny/2019 dated 18.02.2020 and relevant to assessment year 2010-11. :-2-: MA. No: 108/Chny/2020 2. The revenue has narrated facts and mistakes stated to be apparent on record from the order of the Tribunal and relevant contents of Miscellaneous Application filed by the revenue are reproduced as under: “Vide the above referred order, the Hon'ble ITAT had passed an order in favour of M/s L&T Thales Technology Services Pvt Ltd. The appeal had been filed by the assessee against an order under section 201(1)/201(1A) passed against it for A.Y 2010-11. (Order enclosed herewith in triplicate). The Hon'ble !TAT in providing relief to the assessee relied on section 201(3) of the Income Tax Act and stated that the said order is barred by time limitation provided in this section. It is humbly submitted that the order under section 201(1)/201(1A) was passed by the A.O for non- deduction of TDS on payments made to non-residents. The Income Tax Act does not provide a time limit for passing orders under section 201(1)/201(1A) for payments made to non- residents. Section 201(3) relied upon by the Hon'ble ITAT only provides a time limit for payments made to residents. The order under section 201(1)/201(1A) is therefore not barred by time limitation provided under the Income Tax Act. Since this is a mistake apparent from record, it is requested that this issue of applying due date for residents to non-residents may kindly be considered by the Hon'ble ITAT and necessary rectification may please be passed by treating the order under section 201(1)/201(1A) as not being barred by time. The order passed by Hon'ble ITAT for which this application is filed is being attached herewith along with sanctioning letter of CCIT, International Taxation, South Zone, Bangalore in triplicate.” 3. We have heard both the parties and considered relevant contents of Miscellaneous Application filed by the revenue and during the course of hearing, the ld. Departmental Representative Shri. AR V Sreenviasan, Addl. CIT, referring to the order of the Tribunal dated 18.02.2020 submitted that the Tribunal has given its findings on the basis of provisions of :-3-: MA. No: 108/Chny/2020 section 201(3) of the Act as amended by the Finance Act, 2014 w.e.f. 01.10.2014, as if said provisions are also applicable to non-resident, but fact remains that said provision is not applicable to a non-resident and thus, the question to pass order within two years from the end of the financial year in which the TDS statement was filed does not arise. Therefore, he submitted that said mistake constitutes mistake apparent on record which needs to be rectified u/s. 254(2) of the Act. The Ld. Counsel for the assessee, on the other hand supporting the order of the Tribunal submitted that, the Tribunal has given a findings on the basis of law as amended by the Finance Act, 2014 w.e.f. 01.10.2014 and held that limitation provided under sub-section (3) of section 201 is also applicable to non-resident for passing order and thus, it cannot be said that there is an error in the order of the Tribunal which needs to be rectified. 4. Having heard both the sides and considered arguments of the both the parties, we find that the Tribunal had given its findings by following the provisions of section 201(3) of the Act as amended by the Finance Act, 2014 w.e.f. 01.10.2014, but fact remains that said provision is applicable only to :-4-: MA. No: 108/Chny/2020 resident in India, but not a non-resident. Since, the assessee in the present case is a non-resident, finding recorded by the Tribunal on the basis of provisions of section 201(3) of the Act and limitation provided therein is contrary to facts. Therefore, we are of the considered view that findings recorded by the Tribunal on the basis of provisions of section 201(3) of the Act constitutes a mistake apparent on record which needs to be rectified u/s. 254(2) of the Act and thus, we recall the order of the Tribunal dated 18.02.2020 in ITA No. 1157/Chny/2019 and direct the Registry to list the appeal for hearing in due course and inform to both the parties. 5. In the result, Miscellaneous Application filed by the revenue is allowed. Order pronounced in the Open Court on 10 th March, 2023 at Chennai. Sd/- (वी दुगाᭅ राव) (V. DURGA RAO) ᭠याियकसद᭭य/Judicial Member Sd/- (मंजुनाथ. जी) (MANJUNATHA. G) लेखासद᭭य/Accountant Member चे᳖ई/Chennai, ᳰदनांक/Dated: 10 th March, 2023 JPV आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ (अपील)/CIT(A) 4. आयकर आयुᲦ/CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF