2023 (12) TMI 1368 - AT - Income Tax

Assessment on TDS for Lease Rent Barred by Limitation; Subsequent Decision Void Ab Initio.

The ITAT Delhi allowed the appeals filed by the Assessee concerning TDS on lease rent paid to NOIDA. The assessment dated 28/12/2017 was deemed barred by ... Deduction of tax at source - assessee in default under section 201(1) - interest under section 201(1A) - limitation under section 201(3) - finality of TDS assessment and non-reopening - assessment void ab initioLimitation under section 201(3) - deduction of tax at source - Assessment framed on 28/12/2017 for TDS returns of AY 2011-12 is barred by limitation. - HELD THAT: - The Tribunal examined the then prevailing provision of section 201(3) as applicable to AY 2011-12 which precluded framing an assessment for a TDS return beyond two years from the end of the financial year in question. The AO framed an assessment on 28/12/2017; applying the statutory two-year limitation, the Tribunal held that the assessment initiated on that date was time-barred. The assessee had filed TDS returns in the prescribed form within the prescribed time and the limitation bar accordingly precluded the later assessment framed by the AO. [Paras 5]The assessment dated 28/12/2017 is barred by limitation and is quashed.Finality of TDS assessment and non-reopening - assessment void ab initio - deduction of tax at source - assessee in default under section 201(1) - Second assessment framed on 28/12/2017 is void ab initio in view of an earlier TDS assessment dated 15/03/2012 which had accepted the assessee's claim and was not reopened. - HELD THAT: - The Tribunal noted that the erstwhile TDS Officer had already framed an assessment under sections 201/201(1A) on 15/03/2012 accepting the assessee's position. That assessment stood completed and was neither reopened by the AO nor revised under section 263. In these circumstances, the Revenue lacked justification to initiate a divergent second assessment for the same AY on 28/12/2017. The CIT(A) failed to address this fact; accordingly the Tribunal concluded that the subsequent assessment was void ab initio for more than one reason, including the existence of the earlier completed assessment which precluded the later contrary action. [Paras 6]The second assessment is void ab initio and is quashed; consequential TDS default and interest demand arising from it cannot be sustained.Final Conclusion: Both appeals are allowed: the assessment dated 28/12/2017 for AY 2011-12 is quashed as time-barred and void ab initio in view of the earlier completed TDS assessment dated 15/03/2012 which accepted the assessee's claim. The appeals filed by the Assessee were allowed by the ITAT Delhi. The issue was regarding TDS on lease rent paid to NOIDA. The assessment framed on 28/12/2017 was held to be barred by limitation. The second assessment was quashed as void ab-initio. The appeals were allowed on 15th December, 2023.