Limitation for TDS trigger is quarter based

The Bombay High Court in Commissioner of Income Tax (TDS), Pune v. Vodafone Cellular Ltd. clarified that the limitation for passing an order treating a deductor as an assessee in default under Section 201 of the Income Tax Act must be determined with reference to the date of filing of each quarterly TDS statement. 

Since the law mandates quarterly statements, each filing triggers an independent limitation period under Section 201(3).

In the present case, the Assessing Officer passed the order beyond two years from the end of the financial year in which the first three quarterly TDS statements were filed, making those proceedings time barred.

However, the order relating to the fourth quarter was valid because its statement had been filed in the subsequent financial year. 

The Court therefore upheld the Tribunal’s decision and dismissed the Revenue’s appeal.