AI Drafter 
TaxTMI 
TaxTMI 
2024 (11) TMI 866
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....cribed thereof. 2. Whether on the facts and in circumstances of the case and in law, the CIT(A) was justified in not appreciating the fact that sub section 3 of S. 201 prescribes two types of limitations. First clause is applicable for cases where statement referred to in S. 200 has been filed whereas Ind is for the cases other than those specified in clause I of S. 201(3). In the instant case, limitation would be hit by clause 2 of S. 201(3) i.e. 7 years from the end of the relevant financial year, therefore, date of limitation in this case would be 31.03.2018. Hence, order is not barred by limitation. 3. Whether on the facts and in the circumstances of the case and in law, the CIT(A) was justified in not appreciating the fact that no specific period of limitation has been prescribed for issuance of notice of verification u/s 201 and 201(1A) of the Act, rather subsection (3) of section 201 of the Act provides time limit for passing of order u/s 201(1) of the Act. 4. That the order of the CIT(A) being erroneous in law and on facts and needs to be vacated. 5. That the appellant craves leave to add or amend any one or more of the grounds of the app....
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....A) of the Act within prescribed time limit. 9. The Ld AR has submitted that the order passed by the AO was time barred by limitation. He has submitted that section 201(3) of the Act provides the time limit within which an order u/s 201(1) of the Act can be made. He has also submitted that the assessee has filed the TDS statement within time so the time limit for assessment is two years. The Ld. CIT (A) has rightly allowed the appeal by holding that the impugned order was time barred. He has relied upon the following judicial decisions ; 1. S.S. Gadgil Vs. Lal &Co. [1964 53 ITR 231(SC) 2. K.M. Sharma Vs. Income-tax-Officer [2002] 122 Taxman 426 (SC) 3. National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India [ 2003] 128 Taxman 361 (SC) 4. Tata Teleservices v. Union of India [2016] 385 ITR 497 (Gujarat) 5. Troikaa Pharmaceuticals Ltd. v. Union of India ( 68 taxmann.com 229) [2016] (Gujarat) 6. Sodexo SVC India Pvt. Ltd. v. DCIT [ 2018] 92 taxmnan.com 260 (Mumbai-Trib.) Section 201 of the Act reads as under :- Section 201 of the Act provides for consequences of failure to deduct o....
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....in section 200 has been filed, (ii) [six] 1years from the end of the financial year in which payment is made or credit is given, in an other case: Provided that the 1st day of April, 2007 may be passed at any time on or before the 31st day of March 2011- substantial Vide Finance Act, 2014, there was substantial overhauling of provision of Section 201 (3) of the Act, where the period of two years and six years provided earlier, was substituted and a uniform period of limitation of seven years was adopted irrespective whether the Statements were filed or not. The new Sub section (3) to Section 201, was explicity made applicable from October 1, 201was earlier, was substitute Section 201(3) of the Act (as ay made applicable from October filed or not. The provisions as per Section 201(3) of the Act (as amended vide Finance AC 2014) is reproduced below for your Honor's ease of reference : 3) No order shall be made under sub-section (1) deeming a person be an failure to deduct the whole or any part of the tax from a person resident in India assessee in default for expiry of seven years from the end of the financial year in which payment is made or credi....
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....viding limitation period of two years for passing the order under section 201(1) from the end of the financial year in which statement of TDS is filed by the deductor and in a case where no statement is filed the limitation was extended therefore expiry of four years from the end of financial year in which the payment was made or credit given. The aforesaid amendment was made effective from 1st April 2010. Subsequently, by Finance Act, 2012, sub-section (3) of section 201 was again amended with retrospective effect from 1st April 2010. The aforesaid amended provision reads as under:- "(3) No order shall be made under sub-section (1) deeming a person to be an assessee in default for failure to deduct the whole or any part of the tax from a person resident in India, at any time after the expiry of---- (i) Two years from the end of the financial year in which the statement is filed in a case where the statement referred to in section 200 has been field; (ii) Six years from the end of the financial year in which payment is made or credit is given, in any other case : 8. As could be seen from a reading period aforesaid provision, the only change which....
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.... the legislature intended to bring such amendment with retrospective effect. If the legislature intended to apply the amended provision of sub-section (3) retrospectively it would definitely have provided such retrospective effect expressing in clear terms while making such amendment. This view gets support from the fact that while amending sub-section (3) of section 201 by Finance Act, 2012, by extending the period of limitation under sub-clause (ii) to six years, the legislature has given it retrospective effect from 1st April 2010. Since, no such retrospective effect was given by the legislature while amending sub-section (3) by Finance Act, 2014, it has to be construed that the legislature intended the amendment made to sub-section (3) to take effect from 1st October 2014, only and not prior to that. The Hon'ble Supreme Court in Vatika Township Pvt. Ltd. (supra) while examining the principle concerning retrospectivity of an amendment brought to the statutory provisions has observed that unless a contrary intention appears, a legislation is presumed not to be intended to have retrospective operation. The idea behind the rule is that a current law should govern current activi....
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....for which limitation had already expired prior to amended section 201(3) as amended by Finance Act No.2 of 2014. Under the circumstances, the impugned notices/summonses cannot be sustained and the same deserve to be quashed and set aside and writ of prohibition, as prayed for, deserves to be granted." 10. Following the aforesaid decision of the Hon'ble Gujarat High Court in Troykaa Pharmaceuticals Ltd. (supro) again expressed the same view. "7. Examining the facts of the present case in the light of the principles enunciated in the above decision, the present case relates to financial year 2008-2009. The petitioner had filed statements as required under section 200 of the Act. The limitation for initiating proceedings under section 201(1) of the Act would, therefore, be governed by section 201(3)(i) of the Act as it stood at the relevant time which provided for a period of limitation of two years from the end of the financial year in which statement was filed in a case where the statement referred to in section 200 has been filed. The limitation for initiating action under section 201(1) of the Act, therefore, elapsed on 31st March, 2012 whereas the amendment ....