TDS order under sections 201(1) and 201(1A) quashed as time-barred beyond two-year limitation period

The ITAT Delhi allowed the assessee's appeal regarding an order under sections 201(1) and 201(1A) of the Income Tax Act. The assessee filed TDS returns on 07.05.2013, but the AO passed the order on 31.10.2019, deeming the assessee as assessee-in-default for non-deduction of TDS. The Tribunal held that the order was barred by limitation, as it should have been passed within two years from the end of the financial year when the section 200 statement was filed, i.e., by 31.03.2015. Following precedent in Cantabil Retail India Ltd., the Tribunal ruled the order was time-barred and allowed the appeal.

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Issues Involved:
1. Time limitation for passing order under section 201(1) of the Income Tax Act.
2. Validity of order passed by the Assessing Officer without giving opportunity of being heard.

Summary:
Issue 1: The appeal challenged the order passed by the learned commissioner of income tax (TDS) under section 250 of the act, contending that it was time-barred under section 201(3). The Tribunal held that the order dated 31.10.2019 was barred by limitation as it exceeded the two-year time frame from the end of the financial year in which the statement was filed, as per the law then available. The Tribunal referred to a previous decision and concluded that the order was clearly barred by limitation, thus quashing it.

Issue 2: The grievance of the assessee included the contention that the Assessing Officer erred in passing the order without giving any opportunity of being heard, which was against the principle of natural justice. The Tribunal, after finding the order to be barred by limitation, did not delve into the merits of the case, ultimately allowing the appeal of the assessee.

The Tribunal, in line with the decision of the coordinate Bench, held that the order dated 31.10.2019 was barred by limitation and therefore liable to be quashed. The Tribunal emphasized the importance of adhering to time limitations for passing orders under the Income Tax Act, ensuring procedural fairness and upholding the principles of natural justice.

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