ITAT quashes order for failure to Deduct TDS against Bank of India as it was time-barred

The Income Tax Appellate Tribunal (ITAT), Pune Bench quashed the order for failure to Deduct TDS against Bank of India as it was time-barred.

The assessee, Bank of India accepted deposits from its customers, on which tax was deductible at source under section 194A of the Act. The assessee furnished TDS statements in respect of the four quarters. The AO found certain anomalies therein and observed that in some cases there was no deduction of tax, whilst in others, there was a short deduction of tax on interest payments.

The AO passed the order under section 201(1) read with section 201(1A) of the Act treating it as the assessee in default, raising demand of Rs.2,67,943. The assessee challenged such an order before the CIT(A). It also raised an additional ground before the first appellate authority to the effect that the order passed by the AO was time-barred. The CIT(A) admitted the additional ground but dismissed the same on merits by holding that the order passed in the year 2017 was governed by the then-existing time limit under section 201(3) of the Act as amended by the Finance (No.2) Act, 2014.

The coram of headed by the Vice President R.S. Syal and Judicial Member, S.S. Viswanethra Ravi said that When the proviso to section 201(3) is stipulating for passing of an order before 31.3.2011, which is a period of more than two years as per the sub- section (3), it naturally follows that the ordinary time limit for the passing of the order within the main provision is a period of two years from the end of the relevant financial year in which the TDS statement is filed and it has no relation with the time when the AO takes up the proceedings for passing of an order.

The ITAT held that the order under section 201(1) of the Act was passed beyond the period of two years from the end of the financial year in which the last TDS statement was filed. The same is hereby quashed as time-barred.

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