INCOME TAX ACT, 1961

Section 201(1)/(1A)

Tax deduction at source - Assessee-in-default - undr section 201(1)/(1A) - Bar of limitation

Assessee for the concerned asst.yr. 2009-10 filed TDS statement on 30-6-2009. AO noticed that assessee had incurred expenditure of Rs. 3 crores for various services such as contract payments, professional services, rent and commission for the year ended on 31-3-2009 and tax had not been deducted at source. Therefore, show-cause notice under section 201(1) and 201(1A) was issued on 11-1-2016. Assessee submitted its reply on 22-1-2016 stating that time limit for passing of order under section 201(1) had already expired on 31-3-2012. On merits, the assessee did not submit any explanation. AO rejected contention of assessee and held assessee as one-in-default. Held: Prior to section 201 was amended by Finance Act No. 2 of 2009, no time limit was provided for passing a order under section 201(1). With effect from 1-4-2010 time limit was provided that such order shall be passed within the two years from the end of the financial year in which statement of TDS is filed. If no statement is filed it could be passed upto 4 years from the end of financial year in which amount is credited or paid. In the instant case statement of TDS was filed on 30-6-2009 (i.e. in financial year 2009-10), therefore, time limit for passing an order under section 201 expired on 31-3-2012 and accordingly, impugned order passed by AO under section 201(1)/201(1A) on 16-2-2016 was barred by limitation.

Followed:Tata Teleservices v. UOI (2016) 385 ITR 497 (Guj) : (2016) 284 CTR 337 (Guj) : 2016 TaxPub(DT) 1126 (Guj-HC).