2022 (11) TMI 777

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....end of financial year in which the TDS statement was filed. The Ld. AO has erred in given retrospective effect to the amendment in sub-section (3) of Section 201 of the Act which extended the time-limit to 7 years with effect from October 01, 2014. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has grossly erred in interpreting the amended provisions sub-section (3) of Section 201 of the Act as per which the only change which was effected from the earlier provision was the limitation period of four years in case of a deductor not filing TDS statement was extended to six years from four years. Whereas, in case of a person/deductor filing TDS statement, the limitation period of two years remained unchanged. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has grossly erred in alleging that the payment for maintenance of common area of a mall is in the nature of rent and thereby subject to TDS under section 194I of the Act. 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has ignored the judgement of the Hon'ble Mumbai High Court wherein the common area maintenance....

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....dingly, the assessee was directed to pay TDS amount of Rs. 26,76,475/- and interest thereon amounting to Rs. 23,96,645/-. 7. Order was challenged before the ld. CIT(A) on the ground that the impugned order is barred by limitation. It was strongly contended that the assessee has filed form 26Q for 4 quarters as under: Sl. No. Type of Form Date of filing Acknowledgment no FY ending Limitation for passing an order 1 26Q1 19.07.2010 020010200121085 31.03.2011 31.03.2013 2 26Q2 20.10.2010 050910100318722 31.03.2011 31.03.2013 3 26Q3 19.01.2011 050910300075036 31.03.2011 31.03.2013 4 26Q4 18.05.2011 00010200157592 31.03.2012 31.03.2014 8. In light of the above, it was strongly contended that the period of limitation for framing the assessment order expired on 31.03.2014 whereas the order was framed on 30.03.2018. The ld. CIT(A) was not convinced with the explanation of the assessee who was of the firm belief that amendment brought by Finance Act 2014 w.e.f 1.10.2014 has a retrospective effect and referring to the memorandum to the Finance Bill explaining the amendment, the ld. CIT(A) concluded....

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....h proceedings could be commenced for the said period. 15. The reasons for amendment so stated in the memorandum to the Finance Bill No.2 of 2009 reads as under: "Providing time limits for passing of orders u/s. 201(1) holding a person to be an assessee in default. Currently, the Income Tax Act does not provide for any limitation of time for passing an order u/s. 201(1) holding a person to be an assessee in default. In the absence of such a time limit, disputes arise when these proceedings are taken up or completed after substantial time has elapsed. In order to bring certainty on this issue, it is proposed to provide for express time limits in the Act within which specified order u/s. 201 (1) will be passed. It is proposed 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 ....

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....l year in which payment is made or credit is given. 18. By Finance Act No.2 of 2012, even distinction between the cases, statement has been filed and where such statement was not filed also has been removed and the amendment prescribes a common period of limitation i.e. seven years from the end of the financial year in which payment was made. 19. The reasons for amendment in section 201(3) so stated in the memorandum to the Finance Bill No.2 of 2014 reads as under: "Tax Deduction at Source : Under Chapter X VII-B of the Act, a person is required to deduct tax on certain specified payments at the specified rates if the payment exceeds specified threshold. The person deducting tax ("the detductor") is required to 'file a quarterly statement of tax deduction at source (TDS) containing the prescribed details of deduction of tax made during the quarter by the prescribed due date. Currently, a deductor is allowed to file correction statement for rectification / updation of the information furnished in the original TDS statement as per the Centralized Processing of Statements of Tax Deducted at Source Scheme, 2013 notified vide Notification No.03/2013 date....

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....nder section 201(3)(ii) of the Act. Due to this, order under section 201(1) of the Act cannot be passed in respect of defaults relating to TDS which comes to the notice during search/reassessment proceeding in respect of previous year which is not covered under section 201(3)(ii) of the Act for passing order under section 201(1) of the Act shall be extended by one more year. The existing provisions of section 271H of the Act provides for levy of penalty for failure to furnish TDS/TCS statements in certain cases or furnishing of incorrect information in TDS/ TCS statements. The existing provisions of section 271H of the Act do not specify the authority which would be competent to levy the penalty under the said section. Therefore, provisions of section 271H are proposed to be amended to provide that the penalty under section 271H of the Act shall be levied by the Assessing officer." 20. At this stage, it is required to be noted that earlier section 201(3) of the Act as amended by Finance Act, 2012 amended on 28/5/2012 was specifically made applicable retrospectively w.e.f. 1/14/2012, whereby limitation period was substituted from four years to six years for passing order....