2022 (11) TMI 1057 - AT - Income Tax

Assessment appeals allowed on time-bar grounds, emphasizing statutory limits.

The Tribunal allowed the assessee's appeals primarily on the ground that the assessment orders were time-barred. The Tribunal did not delve into the ... Default u/s 201(1) r.w.s 201(1A) - time period for passing order u/s 201 - limitation period as prescribed u/s 201(3) - HELD THAT:- We find that statement of quarterly Nos.1 to 4 for assessment year 2008-09 is filed by assessee on 15.07.2008, 27.10.2008, 30.01.2009 and 22.05.2009 respectively. Admittedly, the last statement of last quarter (Q4) was furnished by assessee on 22.05.2009 a time period for passing assessment order under section 201(1A) as per the time period for passing order at the relevant period, was two years from the end of financial year in which statement under section 200 was filed. Since the last statement was filed by assessee on 22.05.2009, the Assessing Officer / DCIT(TDS) could pass the order upto 31.03.2012. However, the Assessing Officer / DCIT(TDS) passed assessment order on 30.03.2016, which is apparently barred by period of limitation. We find that similar view was taken by Co-ordinate Bench of this Tribunal in the case of State Bank of India Vyara Branch [2020 (4) TMI 430 - ITAT SURAT] and ITAT Mumbai Benches in the case of Sodexo SVC India Pvt. Ltd. [2019 (4) TMI 310 - ITAT MUMBAI] Hon'ble ITAT Mumbai Benches in the case of Sodexo SVC India Pvt. Ltd. [2019 (4) TMI 310 - ITAT MUMBAI] while considering the similar objection of Revenue held that such correction was in the form of rectification was very meager which were pitted in the information like PAN or the details of authorized signatory or details of CFO of the assessee. Such changes have no bearing on the amount on TDS / or deposited or likely to be deposited with this Revenue. Such correction made by way of rectification are negligible. Therefore, we do not find any substance in the submission made by Ld. Sr- DR for the Revenue. Therefore, the appeal of assessee is allowed on legal position / additional ground of appeal. Issues Involved:1. Condonation of delay in filing appeals.2. Admission of additional grounds of appeal.3. Legality of the order passed by the Assessing Officer under section 201(1) r.w.s 201(1A) of the Income Tax Act, 1961.4. Non-deduction of TDS on interest payments exceeding the basic exemption limit.5. Time-barred nature of the assessment order.Detailed Analysis:1. Condonation of Delay in Filing Appeals:The assessee, a Public Sector Bank, filed appeals with delays of 505 and 258 days respectively. The delay was attributed to the need for multiple levels of administrative approval within the bank's hierarchy. The Tribunal considered the rival submissions and noted that the delay was neither intentional nor deliberate. Given the public interest and the involvement of the Central Government, the Tribunal took a liberal approach and condoned the delay, citing the principle that the cause of substantial justice must prevail over technical considerations, as held by the Supreme Court in the case of Collector of Land Acquisition vs. Mst. Katiji.2. Admission of Additional Grounds of Appeal:The assessee raised an additional ground of appeal, arguing that the order passed by the Assessing Officer was barred by limitation. The Tribunal admitted the additional ground, noting that it was purely legal in nature and required no new facts to be brought on record. The Tribunal relied on the Supreme Court's judgment in National Thermal Power Corporation vs. CIT, which allows legal issues to be raised at any stage if they go to the root of the matter.3. Legality of the Order Passed by the Assessing Officer:The Assessing Officer conducted a spot verification and found that the bank had not deducted TDS on interest payments exceeding the basic exemption limit, despite receiving Form 15G/15H from customers. The Assessing Officer issued a show-cause notice and subsequently passed an order under section 201(1) for non-deduction of tax, creating a demand of Rs. 83,442 and interest of Rs. 70,926, totaling Rs. 1,54,368.4. Non-deduction of TDS on Interest Payments:The assessee contended that it had accepted Form 15G/15H from customers, which exempts it from deducting TDS. However, the Assessing Officer found that the interest payments exceeded the basic exemption limits and thus required TDS deduction. The CIT(A) upheld the Assessing Officer's order but directed verification of Form 15G/15H to ensure compliance with the exemption limits.5. Time-barred Nature of the Assessment Order:The assessee argued that the order under section 201(1) was passed beyond the prescribed time limit. The Tribunal noted that the last TDS statement for the financial year 2008-09 was filed on 22.05.2009, and the Assessing Officer should have passed the order by 31.03.2012. Since the order was passed on 30.03.2016, it was deemed time-barred. The Tribunal referred to similar cases, including State Bank of India Vyara Branch vs. ACIT and Sodexo SVC India Pvt. Ltd. vs. DCIT, which supported the assessee's contention.Conclusion:The Tribunal allowed the assessee's appeals, primarily on the ground that the assessment orders were time-barred. The Tribunal did not delve into the merits of the additions, as the appeals were allowed on legal grounds. The Tribunal's decision was consistent with previous rulings in similar cases, emphasizing the importance of adhering to statutory time limits for passing assessment orders.