Indoworth India Ltd Vs ACIT (TDS) (ITAT Nagpur)
Conclusion: AO passed TDS order issued for non–deduction of TDS and interest thereon u/s 201(1) and 201(1A) was beyond the four-year limit and the same was barred by limitation under section 201(1) was invalid.
Held: Assessee challenged orders by CIT (Appeals) for the assessment year 2012–13 and 2013–14, uploading order under section 201(1A) passed by the ACIT (TDS), Nagpur. Registry had pointed out a delay of 218 days in filing the present appeal before the Tribunal. Tribunal opined that assessee was prevented in filing the appeal belatedly and the delay in filing the appeal was due to reasonable and sufficient cause. Consequently, the delay of 218 days in filing the present appeal was condoned and admitted the same for adjudication on merit since there was no mala fide intention on the part of assessee. During the year, assessee collected share application money from various applicants. It had also received total amount of ` 4,65,79,390, as advance against share application money. Assessee had taken interest provision @ 12% per year amount of ` 55,89,527, in his books of account from F.Y. 2012-13 to F.Y. 2018-19. This entry was purely provision and contingent liability nature hence assessee did not claim this expenditure in her income tax returns. Due to this reason, assessee had not deposited TDS on the credited interest amount in financial year. Assessee challenged the order for non–deduction TDS and interest u/s 201(1) and 201(1A) on share application money of Rs.55,89,527/- amounting to Rs.22,45,596/- was incorrect, illegal, bad in law and without natural justice and the same was to be deleted. It was held that following the decision in GE India Technology Centre v/s CIT, [2010] (10) SCC 29, and the judgment of the Hon’ble Jurisdictional High Court in Mahindra & Mahindra Ltd. [2014] 365 ITR 0560 (Bom.) wherein it has been held that the reasonable time limit for issue of notice u/s 201(1)/201(1A) was 4 years. In cases, where the notice was issued beyond 4 years, the Co–ordinate Bench of ITAT held that the same was barred by limitation under section 201(1) passed in September 2021. Since, in the present case, the orders were beyond 4 years from end of financial year, hence not sustainable and was quashed. Hence, insofar as non–residents were concerned, the order to that extent was clearly time barred. Therefore, assessee could not be considered as assessee in default.
