### Limitation for Section 201(1) Orders Commences From Filing of Each Quarterly TDS Statement Individually

The Appellant (Revenue) challenged an order dated 12th March 2018 passed by the Income Tax Appellate Tribunal (ITAT), Pune.

The Respondent (Assessee) had filed its TDS returns for the first three quarters of Financial Year (FY) 2008–09 within the same financial year (specifically on 19.07.2008, 15.09.2008, and 15.01.2009).

The return for the fourth quarter was filed on 15.06.2009, falling into FY 2009–10.

The Assessing Officer passed an order under Section 201(1) on 15.03.2012 declaring the assessee in default for all four quarters.

The ITAT held that the proceedings for the first three quarters were barred by limitation under Section 201(3), while the fourth quarter was within time.

Whether the limitation period for passing an order under Section 201(1) of the Income Tax Act, 1961 must be computed quarter-wise based on the date of filing individual TDS statements or on a cumulative annual basis.

The court applied Section 201(3) of the Income Tax Act, 1961 (as it stood at the relevant time), which prohibits passing an order deeming a person an assessee in default after the expiry of two years from the end of the financial year in which the statement referred to in Section 200 is filed.

The court also referred to Rule 31A of the Income Tax Rules, which mandates the filing of TDS statements on a quarterly basis with distinct due dates.

The court further applied the principle of strict construction of taxing statutes, asserting that limitation periods cannot be extended by implication.

The Court rejected the Revenue's argument that limitation should be computed annually and cumulatively.

It reasoned that since Section 201(3) expressly links the commencement of the limitation period to the filing of the statement under Section 200, and Rule 31A mandates that such statements be filed quarterly, each quarterly filing creates a separate starting point for limitation.

Because the statements for the first three quarters of FY 2008–09 were filed within that same FY, the two-year limitation period expired on 31.03.2011.

Consequently, the order passed on 15.03.2012 was time-barred for those specific quarters.

However, for the fourth quarter, since the return was filed in FY 2009-10 (June 2009), the limitation period ended on 31.03.2012, making the order dated 15.03.2012 valid for that period only.

It held that the scheme of TDS compliance treats each quarter as a separate period with independent statements.

The order under Section 201(1) passed on 15.03.2012 was held to be barred by limitation regarding the first three quarters of FY 2008–09, as it was passed beyond two years from the end of the financial year in which those statements were filed.