S3 INFRAREALITY PRIVATE LIMITED,DELHI V. INCOME TAX OFFICER,TDS WARD 77(1), DELHI

ITA 2487/DEL/2025

AI Insights

The case involves S3 Infrareality Pvt Ltd, the appellant, contesting an order by the JCIT, Ahmedabad, which upheld a disallowance under Section 201(1) of the Income-tax Act, 1961, for non-deduction of TDS on External Development Charges paid to DTCP for the assessment year 2015-16. The primary legal issue was the validity of the order under Section 201(1), which was challenged on the grounds of being passed beyond the statutory limitation period. The Tribunal, referencing a decision by the Hon'ble Delhi High Court, found that the order was indeed time-barred and thus invalid.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780409 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 17-04-2025
• Other Referred Cases: NHK Japan Broadcasting Corporation vs. State of Punjab v. Bhatinda District Co-op Milk Producers Union Ltd
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Keywords: Set aside; Period of limitation; TDS; Time period of passing order
• Section: 201(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘B’ BENCH, NEW DELHI BEFORE SHRI YOGESH KUMAR US, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 2487/DEL/2025 [A.Y. 2015-16] S3 Infrareality Pvt Ltd Vs. The Income tax Officer 93, Hari Nagar, Ashram Ward - 77(1) Delhi Delhi PAN: AATCS 5985 J (Applicant) (Respondent) Assessee By : None Department By : Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing : 22.09.2025 Date of Pronouncement : 08.10.2025 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the JCIT, Ahmedabad dated 21.02.2025 for A.Y 2015-16. 2. The solitary grievance of the assessee in this appeal is that the ld. CIT(A) has upheld the disallowance u/s 201(1) of the Income-tax Act, Printed from counselvise.com ITA No. 2487/DEL/2025 [A.Y. 2015-16] S3 Infrareality Pvt Ltd Vs.The Income tax Officer Page 2 of 4 1961 [the Act, for short] for non-deduction of TDS on External Development Charges paid to DTCP. 3. None appeared on behalf of the assessee. We decided to proceed ahead with the assistance of the ld. DR. The ld. DR was heard at length and the case records were carefully perused. At the very outset, the ld. counsel for the assessee stated that 4. The brief facts of the case are that the order u/s 201(1) was made on 25.02.2022 which was for A.Y 2015-16. We find that the Hon'ble Jurisdictional High Court in the case of NHK Japan Broadcasting Corporation reported in [2008] 172 taxmann.com 230 [Del] found that the power to initiate Section 201 proceedings is drastic and therefore requires a reasonable time limit. The court established a four-year reasonable period for initiating such proceedings, a finding that was based on Supreme Court precedents like the State of Punjab v. Bhatinda District Co-op Milk Producers Union Ltd case. This decision meant that any proceedings under Section 201 that were initiated more than four years after the default occurred were considered time-barred and could be set aside. The hon’ble Delhi High Court held that date of knowledge is not relevant for the purpose of exercising jurisdiction so far as provisions of the Act are concerned. Printed from counselvise.com ITA No. 2487/DEL/2025 [A.Y. 2015-16] S3 Infrareality Pvt Ltd Vs.The Income tax Officer Page 3 of 4 5. In the instant case, the A.Y is 2015-16 and the order u/s 201(1) is passed on 21.02.2025. In accordance with the above referred decision of the Hon'ble Delhi High Court, any action u/s 201(1) of the Act should have been made within 4 years of the infringement of the provisions of section 201 of the Act. In that view of the matter, the order u/s 201(1) of the Act is considered as passed beyond the limitation period as defined by the Hon'ble Delhi High Court rendering the same as invalid and not permissible in law. Accordingly, the order u/s 201(1) of the Act is considered as invalid and set aside. Grounds of appeal raised by the assessee are allowed. 6. In the result, appeal of the assessee in ITA No. 2487/DEL/2025 is allowed. The order is pronounced in the open court on 08.10.2025. Sd/- Sd/- [YOGESH KUMAR U.S.] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 08th OCTOBER, 2025. VL/ Printed from counselvise.com ITA No. 2487/DEL/2025 [A.Y. 2015-16] S3 Infrareality Pvt Ltd Vs.The Income tax Officer Page 4 of 4 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft order is placed before the Dictating Member 3. Date on which the typed draft order is placed before the other Member [in case of DB] 4. Date on which the approved draft order comes to the Sr. P.S./P.S. 5. Date on which the fair Order is placed before the Dictating Member for sign 6. Date on which the fair order is placed before the other Member for sign [in case of DB] 7. Date on which the Order comes back to the Sr. P.S./P.S for uploading on ITAT website 8. Date of uploading, inf not, reason for not uploading 9. Date on which the file goes to the Bench Clerk 10. Date on which the file goes for Xerox 11. Date on which the file goes for endorsement 12. The date on which the file goes to the Superintendent for checking 13. Date on which the file goes to the Assistant Registrar for signature on the order 14. Date on which the file goes to the dispatch section for dispatch the Tribunal order 15. Date of Dispatch of the Order 16. Date on which the file goes to the Record Room after dispatch the order Printed from counselvise.com "