2018 (10) TMI 1404 - AT - Income Tax

Appeal partially allowed due to exceeding limitation period under IT Act

M/s. Gupta And Mahindra Tractors Versus The Income Tax Officer (TDS), Kota

M/s. Gupta And Mahindra Tractors Versus The Income Tax Officer (TDS), Kota - TMI Issues Involved:1. Validity of the order passed under section 201(1)/201(1A) of the IT Act.2. Limitation period for passing the order under section 201(1)/201(1A) of the IT Act.3. Demand for alleged non-deduction of TDS under section 201(1) of the IT Act.4. Initiation and reference of penalty proceedings under section 271C of the IT Act.Issue-wise Detailed Analysis:1. Validity of the Order Passed under Section 201(1)/201(1A) of the IT Act:The assessee contended that the order passed under section 201(1)/201(1A) of the IT Act is bad in law and on facts for want of jurisdiction and various other reasons, and thus should be deleted. This issue was not pressed by the assessee during the hearing, and accordingly, the ground was dismissed as not pressed.2. Limitation Period for Passing the Order under Section 201(1)/201(1A) of the IT Act:The assessee argued that the order dated 27.03.2014 was barred by limitation as it was passed beyond the permissible period of 4 years from the end of the financial year 2008-09. The Tribunal admitted this additional ground, considering it a pure question of law that did not require fresh investigation of facts. The Tribunal referred to various judicial precedents, including the Hon’ble Supreme Court's decision in NTPC vs. CIT, which allowed raising such legal issues at any stage.On merits, it was held that the limitation for passing an order under section 201(1)/201(1A) is 4 years if the assessee has not filed TDS statements. The Tribunal referenced several High Court decisions, including CIT vs. NHK Japan Broadcasting and CIT vs. U.B. Electronics Instruments Ltd., which consistently held that a reasonable period for passing such orders is 4 years. The Tribunal concluded that the order passed on 27.03.2014 was beyond the 4-year period and thus invalid, quashing the order on the grounds of being barred by limitation.3. Demand for Alleged Non-Deduction of TDS under Section 201(1) of the IT Act:The assessee contested the demands of Rs. 59,603 and Rs. 41,914 raised for alleged non-deduction of TDS under section 201(1) of the IT Act. However, since the Tribunal quashed the impugned order on the ground of limitation, it did not delve into the merits of these demands.4. Initiation and Reference of Penalty Proceedings under Section 271C of the IT Act:The assessee challenged the initiation and reference of penalty proceedings under section 271C of the IT Act, arguing that it was not liable to deduct TDS and thus the proceedings were void ab initio and lacked jurisdiction. However, as the Tribunal quashed the main order under section 201(1)/201(1A) due to being barred by limitation, it did not address this ground separately.Conclusion:The Tribunal allowed the appeal partly by quashing the order passed under section 201(1)/201(1A) of the IT Act as it was barred by limitation. The Tribunal did not address the other grounds raised by the assessee due to the quashing of the main order. The decision was pronounced in the open court on 24/10/2018.