Case Law Details
Eris Life Sciences (P) Ltd. Vs DCIT (High Court Gujarat)
As per sub-section (3) of section 201 which stood prior to 1.10.2014, the initiation of action for failing to deduct tax at source is barred by limitation. The amended sub-section(3) of section 201 with effect from 1.10.2014 enlarges the period of limitation to seven years which, as held by this Court in the case of Tata Teleservices cannot be applied retrospectively. Therefore, the notices issued by AO were quashed.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
The petitioners have challenged the notices dated 15.9.2015 calling upon the petitioners to furnish some information including the petitioner’s account for the assessment year 2009-10. Notices were issued in the background of section 201(1)/201(1A) of the Income Tax Act, 1961 (“the Act for short). These notices are challenged in the petitions on the ground that such inquiry is time barred. Learned counsel for the petitioners would draw our attention to sub-section (3) of section 201 of the Act as it stood prior to the amendment made by the Finance Act, 2014 with effect from 1.10.2014 which reads as under:
“201(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 seven years from the end of financial year in which payment is made or credit is given.”
2. He submitted that after amendment, sub-section (3) of section 201 of the Act provides that now no order shall be made under sub-section (1) at any time after expiry of seven years from the financial year in which payment is made or credit is given. The Assessing Officer, perhaps relying on this amended provision, has issued notices. Learned counsel submitted that amended sub-section (3) of section 201 of the Act has no retrospective applicability as held by this Court in the case of Tata Teleservices vs. Union of India, reported in (2016) 6 taxmann . com 157. We have also heard learned counsel for the Revenue.
3. The admitted facts emerging from the record are that as per sub-section (3) of section 201 which stood prior to 1.10.2014, the initiation of action for failing to deduct tax at source is barred by limitation. The amended sub-section(3) of section 201 with effect from 1.10.2014 enlarges the period of limitation to seven years which, as held by this Court in the case of Tata Teleservices (supra) cannot be applied retrospectively. For such reason, the petitions are allowed. The impugned notices dated 15.9.2015 are quashed. Petitions disposed of accordingly.
