TaxTMI 
TaxTMI 
2016 (2) TMI 405
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....201(1A) is bad in law therefore the Hon'ble ITAT be requested to set aside the same and restore back the order of the A.O." 3. We have heard argument of both the sides and carefully perused the material placed on record before us, the Ld. DR strongly supported the action of the AO submitted that as per amendment to provision of section 201 of the Income Tax Act, 1961 (for short the Act) by the Finance Act- 2009 w.e.f. 1.4.2010, order u/s 201 for a financial year commencing on or before 01.04.2007 may be passed at any time on or before the 31s t day of March, 2011. It was also contended that in view of specific provisions brought to the Act by the Legislature the stand of the assessee is nto acceptable. The Ld. DR vehemently contended that the CIT(A) was incorrect in granting relief to the assessee in view of the specific provisions brought in by the legislature. 4. The Ld. AR, replying to the above submissions, supported the first appellate order and contended that the issue is squarely covered in form of the assessee by the order of the ITAT, New Delhi "B" bench in assessee's own case i.e. ITA no. 2742 to 2744/Del/2011 for AY 2003-04 to 2005-06. He drawn our attention to the re....
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....in this case was initiated on 16.11.2009, which was beyond the period of 4 years from the end of financial year. Hence, the A.O was not justified to treat the assessee in default and levied the taxes uls 201(1) and charged the interest uls 201 (1A) in these years. 4.1 0n going through the impugned order dated 27.04.2010, l find that the A.O has admitted the Ld. AR argument relating to limitation matter. 'Despite, he levied the taxes uls 201 (1) and charged the interest u/s 201 (1A) with the observation, "The department has not accepted the decision of Hon 'ble High court of Delhi in the case of CIT vs NHK Japan Broadcasting Corporation and filed a SLP before the Hon 'ble Apex Court. The decision of the Hon 'ble Apex Court in respect of SLP that case is still pending. " In this regard, the Ld. AR brought to my notice that there were two decisions in the case of aforesaid NHK Japan Broadcasting Corporation by the Hon 'ble Delhi High Court, i.e. first, on the issue of taxes and interest u/s 201(1)/201(1A) which was reported in 172 Taxman 230 and secondly, against the Citizen Individual Inhabitant Tax Act, which was a Japanese Law, which was reported in (2007)....
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....t Hon'ble Delhi High Court has decided the aforesaid case vide order dated 15.04.2010 i.e. after insertion of new provision of section 201(3) by the Finance Act, 2009 w.e.f. 01.04.2010. Since the Hon'ble Delhi Court has decided the said case of Hutchison Essar Telecom Ltd. on 15.04.2010, i.e. after the date of application (0l.04.2010) of newly inserted provision of Section 201 (3) by holding period of limitation for 4 years, from the end of financial year, the date of limitation on or before 31.03.2011 is not applicable in those case where the proceeding on or before 01.04.2007 was not pending. In the light of facts and circumstances of the case, legal provision and case laws decided by Hon'ble Jurisdictional High Court and also by the Apex Court, I hold that the proceedings initiated on 16.11.2009 and order passed on 27.04.2010 under section 201(1) / 201(1A) in appellant's case for the financial year 2002-03 to 2004-05 relevant to A. Y 2003-04 to 2005 -06 respectively were barred by limitation. Hence, the taxes levied and interest charged u/s 201 (1)/201 (1A) vide order dated 27.04.2010 for the financial year 2002-03 to 2004-05 relevant to A.Y 2003-04 to 2005-06 are ca....
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....ders do not reveal any finding as to whether or not any statement referred to in sec. 200 of the Act was filed by the assessee nor even the date(s) of payment of salary or TDS or date of credit for such TDS to the Government account are evident .However, the assessee stated before the ld. CIT(A that no such statement was filed while adhoc payment of `97,28,267/- towards TDS was made on 24.8.2010 and that salary was credited to the accounts of expatriates in USA. Apparently, a portion of TDS liability in respect of some of the employees appears to have been deposited after the order of the AO. As is apparent from the findings in the impugned order, the ld. CIT(A) has merely decided the appeal on limitation without going in to merits of the case nor the assessee seems to have explained the issues on merits before the ld. CIT(A). The issue before us is as to whether the AO was competent to initiate proceedings u/s 201(1)/201(1A) of the Act in the year 2009 for these three financial years 2002-03 to 2004-05. While referring to proviso in the newly inserted provisions of section 201(3) introduced by Finance Act, 2009 with effect from 1.4.2010, the AO concluded that he was competent to p....
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....y on this issue, specific time limits is provided in the Act within which order u/s 201(1) will be passed. 50.2 It has been provided that an order u/s 201(1) for failure to deduct the whole or any part of the tax as required under this Act, if the deductee is a resident taxpayer, shall be passed within two years from the end of the financial year in which the statement of tax deduction at source is filed by the deductor. Where no such statement is filed, such order can be passed up till four years from the end of the financial year in which the payment is made or credit is given. To provide sufficient time for pending cases, it is provided that such proceedings for a financial year beginning from 1st April, 2007 and earlier years canbe completed by the 31st March, 2011. 50.3 However, no time-limits have been prescribed for order under sub-section (1) of section 201 where:- (a) the deductor has deducted but not deposited the tax deducted at source, as this would be a case of defalcation of government dues, (b) the employer has failed to pay the tax wholly or partly, under sub-section (1A) of section 192, as the employee would not have paid tax on such perquisites, (c)....
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....he latter case it pertained to initiation of proceedings. We are concerned with initiation of proceedings. 18. Insofar as the Income-tax Act is concerned, our attention has been drawn to section 153(1)(a) thereof which prescribes the time-limit for completing the assessment, which is two years from the end of the assessment year in which the income was first assessable. It is well-known that the assessment year follows the previous year and, therefore, the time-limit would be three years from the end of the financial year. This seems to be a reasonable period as accepted under section 153 of the Act, though for completion of assessment proceedings. The provisions of re-assessment are under sections 147 and 148 of the Act and they are on a completely different footing and ,therefore, do not merit consideration for the purposes of this case. 19. Even though the period of three years would be a reasonable period as prescribed by section 153 of the Act for completion of proceedings, we have been told that the Income-tax Appellate Tribunal has, in a series of decisions, some of which have been mentioned in the order which is under challenge before us, taken the view that four year....
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.... to be in the negative in view of the reason that we have already indicated above. The fact that the assessee agreed to pay the tax voluntarily cannot put the assessee in a situation worse than if it had contested its liability. 25. We may also note that under section 191 of the Act, the primary liability to pay tax is on the person whose income it is that is the deductee. Of course, a duty is cast upon the deductor, that is the person who is making the payment to the deductee, to deduct tax at source but if he fails to do so, it does not wash away the liability of the deductee. It is still the liability of the deductee to pay the tax. In that sense, the liability of the deductor is a vicarious liability and, therefore, he cannot be put in a situation which would prejudice him to such an extent that the liability would remain hanging on his head for all times to come in the event the Income-tax Department decides not to take any action to recover the tax either by passing an order under section 201 of the Act or through making an assessment of the income of the deductee. 26. For the reasons given by us we are not inclined to disturb the order passed by the Tribunal and, there....
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....l appeals filed by the Department are disposed of with no order as to costs." 7.31 Apparently, the Hon'ble Apex Court did not advert to the question of limitation nor even the ld. CIT(A) took cognizance of the aforesaid observations of the Hon'ble Apex Court. 7.4 Following the aforesaid decision, Hon'ble jurisdictional High Court in their decision dated 15.4.2010 in Hutchison Essar Telecom Ltd.(supra), held that the proceedings under section 201/201(1A) of the Act, can be initiated only within three years from the end of the assessment year or within four years from the end of the relevant financial year . 8. Since proceedings in this case have been initiated after the search on 16.11.2009, as concluded by the ld. CIT(A) and the amended provisions had not come in to force on the said date , the law prevailing as on the date was pronounced in the aforesaid two decisions of the Hon'ble jurisdictional High Court. In the light of view taken in the aforesaid decisions by the Hon'ble jurisdictional High Court , we have no alternative but to uphold the findings of the ld. CIT(A).Though, the Hon'ble Punjab & Haryana High Court in their decision dated 17.07.2011 in the case of C....