AI Drafter 
TaxTMI 
TaxTMI 
2015 (8) TMI 913
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....e had not been, as required u/s.194A, deducted on the interest credited/paid by the assessee to the some depositors, i. E., for the relevant years. Form 15H, i. E., a declaration by the depositor that no tax is payable in respect of the interest allowed, precluding deduction of tax at source (TDS), had not been obtained from the deductees, nor filed, as required, with the Office of the concerned Commissioner of Income Tax, much less within the time stipulated there-for. There were in fact several deficiencies therein, rendering them unacceptable, viz. not dated; not verified; date of submission not filled up, etc. He, accordingly, worked out the assessee's liability toward TDS (u/s. 201(1)) and toward interest for the non deposit of the TDS to the credit of the Central Government (u/s. 201(1A)), reckoning the latter from the day following the expiry of the relevant previous year to July, 2008, i. E., as under, vide orders u/ss.201(1) and 201(1A) dated 31.07.2008: F. Y. Amount of interest credit/paid whichever is earlier (Rs.) Rate of TDS Income tax deductible at source u/s.194A Amount of interest u/s. 201(1A) Period of default (months) From 1st April to July'08....
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....egal issue of the application or otherwise of the time limit for framing assessment, i. E., for want of a more appropriate word, u/ss. 201(1) and 201(1A), i. E., in terms of a reasonable period, considering that no time limit had been provided by the statute: i. CIT vs. NHK Japan Broadcasting Corporation Ltd. [2008] 305 ITR 137 (Del); ii. CIT vs. Hutchison Essar Telecom Ltd. [2010] 323 ITR 230 (Del.); and iii. CIT vs. Sutlej Jal Vidyut Nigam Ltd. [2012] 345 ITR 552 (HP). On the Bench specifically requiring the parties to spell out the difference between the two set of decisions, both rendered relying on the decisions by the Hon'ble Apex Court, it was pointed out by them that the decision in H. M. T. Ltd. (supra) was following the decision in Hindustan Times Ltd. vs. Union of India [1998] AIR 1998 SC 688, which is qua recovery under the Employees Provident Fund, while the decisions in favour of the assessee are based on the decisions rendered under the taxing statutes. The Bench, at this stage, pointed out that the relevant provisions fall under Chapter XVII of the Act, titled 'Collection and Recovery of Tax'. Further, the very fact that the Hon'ble Courts had applied th....
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....ld as time barred, as contended and, thus, legally not valid. 4.2 We shall begin by reviewing the judicial precedents, with a view to ascertain or cull out their ratio or the legal principle/s underlying the same. This is as the applicability or otherwise of a particular decision could be determined only after ascertaining its' ratio, which alone has precedent value. This is particularly considering that the decisions relied upon are based on the decisions by the Apex Court. Further, where faced with contrary decisions by the Hon'ble High Courts, none of which is by the jurisdictional high court, the tribunal is bound to Act in accordance with its judicial conscious [CIT vs. Thana Electricity Supply Ltd. [1994] 206 ITR 727 (Bom) and Mahindra & Mahindra Ltd. vs. DCIT [2009] 313 ITR (AT) 263 (Mum)(SB)]. 4.3 We may spell out the ratio of the cited decisions, as under: (1) NHK Japan Broadcasting Corporation Ltd. (supra): a) the concept (or date) of knowledge (by the Department) cannot be imported under the scheme of the Act, and is of no consequence; b) the admission of liability does not restore legality to the proceedings or confer jurisdiction, which has to be as per ....
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....), for which no time limit has consciously been provided by law, even as the Legislature had, it was noted by the Hon'ble Court, made several amendments to the Employees Provident Fund and Miscellaneous Provisions Act, 1952 over a period of 30 years (refer pg. 222 of the reports). There was, accordingly, no time limitation for recovery of arrears. The recovery is not by suit, so that the provisions of the Indian Limitation Act, 1963 are not attracted. The defaulter held the funds in trust, which are due to a trust fund. The legal principles in the matter are, thus, as can be readily seen, stated by the Apex Court in Bharat Steel Tubes Ltd. (supra); Bhatinda District Co-op. Milk Producer Union Ltd. (supra); and Hindustan Times Ltd. (supra). A reasonable period shall govern the exercise of the statutory power. What is reasonable would depend on the facts of the case, which has been further clarified as depending upon the nature of the statute, the rights and liabilities there-under, and other relevant factors. The Legislature has however consciously omitted section 231, which specifically provided for a time period for the commencement of recovery proceedings, so that there is a c....
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.... Chapter XVII-B. Section 201(1), it may be appreciated, is not a charging section or toward a levy of tax - which is in the instant case per sections 4(2) r/w section 194A, but only qua its recovery. At the same time, we cannot but help notice that the TDS liability of the deductor, though recoverable from him and in respect of which he can be, following the due process of law, deemed to be in default, is not to his own account, but is only toward the tax liability of the deductee, and has to be necessarily adjusted against the latter's tax liability. That the same is without prejudice to the charge of tax on his (deductee's) income, who is in any case liable toward the same and obliged therefore to make direct payment in the event of failure to deduct and/or deposit TDS by the payer, is patent from the combined reading of sections 4(1), 190 and 191 of the Act. This introduces a complexity to the matter. The tax, under Article 265 of the Constitution of India, can only be levied or recovered under the authority of law. The tax in the form of TDS, so collected, is that levied (by law) on the deductee. That is, collection of tax could only be of that levied, which, where of TDS, i....
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.... tax liability, which could be recovered only upon determination following the process of law. The law, per section 149, provides for a time limit for the issue of notice u/s.148, toward bringing any income that has escaped assessment, to tax. The same, for the years under reference, is set at a maximum of six years from the end of the relevant assessment year. This, then, would become a reasonable period up to which tax recovery proceedings qua TDS could be initiated, i. E., where there is no outstanding tax demand against the deductee for the relevant year. This is as the proceedings in the case of the deductee, against whose tax liability the said TDS would stand to be adjusted, could in law be initiated only up to that time limit. Two, as afore-discussed, i. E., the tax deduction in the case of the deductor and the tax liability in the case of the deductee, are not independent of each other and, in fact, go hand in hand. Tax collection/recovery could only be of that levied/leviable. The principle stands also explained and is well settled per the decisions by the Apex Court, as in the case of Hindustan Coca Cola Beverage P. Ltd. vs. CIT [2007] 293 ITR 226 (SC). However, it is op....
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....ons by the higher courts of law, in preference to that by the tribunal, also relied upon before us, in view of the issue being legal, so that the former would in any case prevail. In fact, the decisions by the tribunal are in turn based on the decisions by the Hon'ble Apex Court and High Courts, which stand considered and referred to by us. Further, the decision in the case of State of Gujarat vs. Patil Raghav Natha [1969] 2 SCC 187, which has also been relied upon by the tribunal in some cases, stands also considered by the Hon'ble High Court in HMT Ltd. (supra). Coming back to the facts of the present case, the Revenue has not brought on record any outstanding demand on the deductee/s, so that time limitation of six years from the end of the relevant assessment year shall obtain, i. E., for the purpose of initiation of recovery proceedings. Further, for all the years, the proceedings were initiated on 15.02.2008, following a survey u/s.133A concluding on 07.02.2008, by extending opportunity to the assessee to explain its case qua non deduction of tax at source, which was in fact followed by similar opportunity on 22.02.2008, 27.02.2008, 03.03.2008 and 07.03.2008 (refer para 1 ....