TaxTMI 
TaxTMI 
2017 (8) TMI 476
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....(1)/201(1A) of the Income Tax Act, 1961 (hereinafter called as 'the Act') for non-deduction of TDS u/s 195A of the Act. The assessee has raised total 5 grounds as follows: "1. The order of the Ld. CIT (A), in upholding the order of Assessing officer by treating the appellant as "assessee in default" U/s 201(1)/(1A) for non- deduction of TDS is erroneous in law, contrary to the facts, probabilities of the case and against principles of equity and natural justice. 2. The CIT(A) further erred in law by treating the appellant as assessee in default by imply stating that there is no mention about payments being made between December, 2000 to March, 2006 ignoring the very fact that it was clearly mentioned in the sale agreement ....
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.... Hon'ble ITAT to cancel the order passed U/s 201(1)/ (1A)." 3. No argument has been made by the assessee in respect of ground nos.1, 2, 3 & 5 and the entire argument of the assessee was revolved around the time limit for passing the order u/s 201(1)/201(1A) of the Act. The assessee during the previous year relevant to the assessment year, has purchased immovable property admeasuring 226 Sq.yds. at Allipuram, Visakhapatnam for a consideration of Rs. 49,72,000/- from Sri Gudivada S. Naidu, a Non-resident Indian vide document No.3187 registered on 18.7.2007 before the sub-registrar, Visakhapatnam. The non resident has not filed the return of income for the sale of the asset which resulted in capital gains. As per section 195 of the Act,....
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....e. within 6 years from the end of the FY as per the provisions of section 201(3). Therefore this ground of appeal raised by the assessee has no merit and dismissed." 4. Appearing for the assessee, the Ld. A.R. argued that in this case, the property was registered on 4.5.2007 relevant financial year was 2007-08 and the impugned order u/s 201(1) & 201(1A) of the Act was passed on 31.3.2014. According to the Ld. A.R., the order u/s 201/201(1A) of the Act should not be passed beyond 4 years as held by Hon'ble Delhi High Court in W.P. No.2166/2012 in Bharti Airtel and Another Vs. UOI, 76 taxmann.com 256 (Delhi). 5. On the other hand, the Ld. D.R. argued that the assessee has purchased the property and paid the purchase consideration withou....
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....s Act, he or it shall be liable to pay simple interest at 2 fifteen] per cent per annum on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid.]" 7. The Hon'ble Delhi High Court while deciding the writ petition in the case of Bharti Airtel & Another rendered the judgement considering the statement of Objects and Reasons of the Finance (No.2) Bill, 2009. In respect of time limit, Hon'ble Bombay High The Court has considered the issue in detail and held that 6 years is reasonable period for initiating the action u/s 201 and 201(1A). The Hon'ble Delhi High Court in the decision relied upon by the Assessee considered the issue with regard to the limitation of time for initia....
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....e Supreme court decision in CIT Vs.Vegetable Products Ltd., 88 ITR 192 (SC) and CIT Vs. Karamchand Premchand Ltd (1960) 40 ITR 106, we are also of the view that the decision favourable to the assessee is required to be taken. Accordingly following the decision of Hon'ble Delhi High Court we hold that reasonable period is 4 years for initiating of proceedings u/s 201/201(1A). In the instant case the property was registered on 18.7.2007 and the assessee is liable to deduct the TDS during the F.Y.2007-08 and the 4 years time limit for initiating action u/s 201/201A expires before March 2012. In the instant case, notice u/s 195 treating the assessee as assessee in default was issued on 11.08.2013 beyond the 4 years of the financial year in w....