TO CUM PDO Panchkula Vs ITO TDS (ITAT Delhi)
Time-Bar Kills 201 Proceedings: ITAT Delhi Quashes TDS Demand on Treasury Office- Date of Knowledge Irrelevant: Delay Fatal to 201(1) Action, Demand Deleted
Assessee, a Government Treasury Office under Haryana Govt., was treated as assessee-in-default u/s 201(1) & 201(1A) following a survey u/s 133A(2A) on 04.02.2020. AO passed order dated 11.03.2022 for AY 2016-17 determining alleged short deduction of ₹7,49,749 & interest of ₹26,17,555. CIT(A) dismissed the appeal ex-parte without considering assessee’s submissions, despite issuing a notice erroneously referring to wrong AY (2015-16). Assessee argued that deductions were system-generated through govt. software, pensioners had already paid tax, & therefore no revenue loss occurred. Assessee also relied on Hindustan Coca Cola (SC).
Before Tribunal, assessee contended that the proceedings were time-barred, relying on NHK Japan Broadcasting Corporation (Delhi HC) which held that action u/s 201(1) must be initiated within 4 years of the alleged default, as the provision is drastic & must align with the limitation principles laid down in Bhatinda District Co-op Milk Producers Union Ltd (SC).
Tribunal noted that order u/s 201(1)/201(1A) dated 11.03.2022 pertained to AY 2016-17; therefore initiation was clearly beyond 4-year limit prescribed by Delhi HC. Tribunal also recorded that date of knowledge is irrelevant for limitation in 201 proceedings (as held in NHK Japan). Consequently, the order was invalid, barred by limitation, & not permissible in law. Tribunal set aside the 201(1)/201(1A) order & directed AO to delete entire demand. Appeal allowed.
