Limitation on TDS default orders bars a later demand where earlier acceptance was not reopened or revised.

An order treating an assessee as in default for non-deduction of tax at source on lease rent was held to be barred by limitation under section 201(3) of the Income-tax Act, 1961, as the relevant TDS returns had been filed within time and the later section 201/201(1A) order was passed beyond the prescribed period. The Tribunal also noted that an earlier section 201 order had already accepted the assessee's claim and had neither been reopened nor revised under section 263, so the subsequent demand could not stand. The impugned TDS demand orders were set aside as time-barred and void ab initio.

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Issues: Whether the order treating the assessee as an assessee in default for non-deduction of tax at source on lease rent was barred by limitation under section 201(3) of the Income-tax Act, 1961, and whether the subsequent assessment could stand.

Analysis: The assessee had filed the relevant TDS returns for the assessment year within time. The Tribunal noted that, under section 201(3) of the Income-tax Act, 1961 as applicable to the year in question, an order under section 201 could not be passed beyond the prescribed period from the end of the financial year. It further recorded that an earlier order under sections 201 and 201(1A) had already accepted the assessee's claim, and that the same had neither been reopened nor revised under section 263. On these facts, the later order dated 28/12/2017 was found to be beyond limitation and unjustified.

Conclusion: The order under sections 201 and 201(1A) was held to be time-barred and void ab initio.

Final Conclusion: The assessee succeeded in both appeals, and the impugned TDS demand orders were set aside.

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