INCOME TAX OFFICER, JAIPUR V. M/S ID. MOHD. NIZAMUDDIN, TONK

ITA 316/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2468 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 05-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI J
• Assessee Lawyers: FAZLUR RAHMAN
• Keywords: Period of limitation; Retrospective amendment; Additional evidence; Question of law; Avoidance of tax; Competent authority; Time period of passing order
• Section: 201(1); 147

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 316/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER (TDS-3), JAIPUR. CUKE VS. M/S EID MOHAMMAD NIZAMUDDIN, SUBHASH BAZAR, TONK. TAN NO.: JDHI 01315 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 248/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2009-10 M/S EID MOHAMMAD NIZAMUDDIN, SUBHASH BAZAR, TONK. CUKE VS. INCOME TAX OFFICER (TDS-3), JAIPUR. TAN NO.: JDHI 01315 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT-DR) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA & SHRI FAZLUR RAHMAN (ADV) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/07/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 29/08/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER DATED 21/12/2017 OF LD. CIT(A)-3, JAIPUR ARISING FROM TH E ORDER PASSED U/S ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 2 206C(6)/206C(7) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT) FOR THE A.Y. 2008-09. 2. THE BRIEF FACTS LEADING TO THE CONTROVERSY ARE TH AT THE ASSESSEE IS A PARTNERSHIP FIRM, ENGAGED IN THE BUSINESS OF MANUFA CTURING AND TRADING OF BIDI. THERE WAS A SURVEY U/S 133A(2A) OF THE ACT AT T HE BUSINESS PREMISES OF THE ASSESSEE ON 23/3/2015. ON EXAMINATION AND VE RIFICATION OF RECORD, IT WAS FOUND THAT THE ASSESSEE FIRM IS ENGAGED IN TRADI NG OF TENDU LEAVES MAINLY IN THREE STATES I.E. RAJASTHAN, M.P. AND MAH ARASTRA. DURING THE COURSE OF SURVEY PROCEEDINGS, IT WAS DETECTED THAT F OR THE F.Y. 2007-08 TO 2014-14 RELEVANT TO ASSESSMENT YEAR 2008-09 TO 2015 -16, THE ASSESSEE FIRM WAS LIABLE TO COLLECT TAX AT SOURCE (TCS) @ 5% ON SALE OF TENDU LEAVES AS PER PROVISIONS OF SECTION 206C(1) OF THE ACT BUT IT HAS DEFAULTED FOR NON-COLLECTING OF TCS. ACCORDINGLY, THE ASSESSIN G OFFICER PROCEEDED TO PASS ORDER U/S 206C(6)/206C(7) OF THE ACT ON 30/03/ 2016 WHEREBY THE ASSESSEE WAS HELD AS ASSESSEE IN DEFAULT WITHIN THE MEANING OF SECTION 206C(6) READ WITH SECTION 206C(7) OF THE ACT FOR NON -COLLECTION OF TAX OF RS. 98,84,195/- INCLUDING INTEREST. 3. THE ASSESSEE CHALLENGED THE ORDER PASSED BY THE A SSESSING OFFICER U/S 206C(6)/206C(7) OF THE ACT BEFORE THE LD. CIT(A) AND ALSO RAISED OBJECTION AGAINST THE VALIDITY OF THE SAID ORDER ON THE GROUND OF LIMITATION. ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 3 THE LD. CIT(A) HAS REJECTED THE GROUND OF TIME BARRED ORDER PASSED BY THE ASSESSING OFFICER, HOWEVER, GRANTED PART RELIEF TO THE ASSESSEE TO THE EXTENT OF RETURN OF INCOME FILED BY THE PURCHASER O F TENDU LEAVE, FOR WHICH THEY ISSUED FORM NO. 27BA WHICH WERE PRODUCED BEFORE THE LD. CIT(A). HENCE, BOTH THE ASSESSEE AS WELL AS THE REVENUE ARE AGGRIEVED BY THE IMPUGNED ORDER OF THE LD. CIT(A) AND FILED THESE CRO SS APPEALS. THE GROUNDS RAISED IN THE CROSS APPEALS ARE AS UNDER: GROUNDS OF REVENUES APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS JUSTIFIED IN ALLOWING RELIEF ON THE BASIS OF ADDITIONAL EVIDENCE WITHOUT CALLING FOR REMAND REPORT UNDER RULE 46A AN D ENQUIRY UNDER SEC. 250(4) OF THE INCOME TAX ACT, 1961. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE DEMAND WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE DEDUCTOR HAS FAILED TO MAKE PAYMENT OF INTEREST U/S 206C(7) AND NOT MENTIONING DETAILS OF CHALLANS IN THE PRESCRIBED FORM 27BA BEFORE SUBMISSION WITH CLAIM O F RELIEF IN VIEW PROVISO TO SEC. 206C READ WITH NOTIFICATION NO. 12/ 2016 DATED 08/12/2016. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR A LTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE THE APPEAL IS FINALLY HEARD FOR DISPOSAL. GROUNDS OF ASSESSEES APPEAL: 1. THE IMPUGNED ORDER PASSED U/S 206C(6) R/W 206C( 7) OF THE ACT DATED 30.03.2016 IS BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND FOR VARIOUS OTHER REASONS AND HENC E, THE SAME KINDLY BE QUASHED. 2. THE ID. CIT(A)-LLL, JAIPUR ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN HOLDING THAT THE IMPUGNED ORDER PASSED U/S 206C( 6) R/W 206C(7) OF THE ACT DATED 30.03.2016 BY THE ITO, IS NOT BARR ED BY LIMITATION AND THEREFORE, ERRED IN UPHOLDING THE VALIDITY OF T HE IMPUGNED ORDER. ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 4 THE IMPUGNED ORDER SO PASSED ON DATED 30.03.2016 I. R.T. F.Y. 2008-09 AFTER A LAPSE OF A LONG PERIOD, IS CONTRARY TO THE INTENTION OF THE LEGISLATURE AND TO THE VARIOUS JUDICIAL PRONOUNCEME NTS AND HENCE, IS CERTAINLY BARRED BY LIMITATION AND THEREFORE, THE S AME KINDLY BE QUASHED IN LIME LINE. 3. 1 RS.24,40,544/-: THE ID. CIT(A)-III, JAIPUR ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE DEMAND RAISED B Y THE ITO DUE TO ALLEGED NON COLLECTION OF TAX AT SOURCE (TCS) U/S 2 06C(6) OF THE ACT, WHICH IS THE ENTIRE AMOUNT OF SALES ITSELF AND OTHE RWISE ALSO IS COMPLETELY CONTRARY TO THE PROVISIONS OF LAW AND FA CTS IN AS MUCH AS RS.24,40,544/- IS GROSS AMOUNT OF SALES EFFECTED BY THE ASSESSEE AND NOT MERELY 5% TCS THEREON. HENCE, THE IMPUGNED DEMA ND KINDLY BE QUASHED AND DELETED IN FULL. 3.2 THE ID. CIT(A)-LLL, JAIPUR FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN RAISING DEMAND OF INTEREST IN RELATION TO THE ALLEGED NON COLLECTION OF TAX AT SOURCE (TCS) U/S 206C(7) OF TH E ACT, WHICH IS COMPLETELY CONTRARY TO THE PROVISIONS OF LAW AND FA CTS HENCE, KINDLY BE QUASHED AND DELETED IN FULL. 4. THE ID. CIT(A)-LLL, JAIPUR FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN NOT CONSIDERING THAT THE PRESENT CASE F ALL U/S 206C(1A) R/W RULE 37C IN AS MUCH AS THE ENTIRE SUBJECTED SAL ES WAS MADE TO THE ULTIMATE CONSUMERS FOR USE IN MANUFACTURING, PR OCESSING OR PRODUCING AND HENCE THE PROVISION OF S.206C WAS NOT APPLICABLE. 5. THE APPELLANT PRAYS YOUR HONOUR INDULGENCE TO AD D, AMEND OR ALTER OF OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFORE THE DATE OF HEARING. 4. IN THE GROUND NOS. 1 AND 2 OF THE ASSESSEES APP EAL, A LEGAL ISSUE OF VALIDITY OF ORDER PASSED BY THE ASSESSING OFFICER U /S 206C(6)/206C(7) OF THE ACT HAS BEEN RAISED. THIS ISSUE BEING THE ORDER PASSED BY THE ASSESSING OFFICER IS BARRED BY LIMITATION IS PURELY A LEGAL ISSUE AND GOES TO THE ROOT OF THE MATTER, THEREFORE, WE WILL FIRST TAKE UP GROUNDS NO. 1 AND 2 ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 5 OF THE ASSESSEES APPEAL FOR CONSIDERATION AND ADJU DICATION. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE IMPUGNED ORDER PASSED BY THE ASSESSING OFFICER ON 30/3/2016 IS BARRED BY LIMITAT ION AS BEYOND THE REASONABLE PERIOD OF TIME. HE HAS SUBMITTED THAT TH OUGH THE PROVISIONS CONTAINED U/S 206C OF THE ACT DOES NOT PRESCRIBE AN Y TIME LIMIT FOR INITIATION OF PROCEEDINGS OR FOR PASSING ORDER THER EUNDER, HOWEVER, THAT DOES NOT MEAN THAT AN UNLIMITED TIME IS AVAILABLE T O THE ITO TO TAKE ACTION OR TO PASS ORDER AT ANY TIME AS PER HIS SWEET WILL. TH E LD AR HAS THUS CONTENDED THAT WHEN NO TIME LIMIT IS PROVIDED UNDER THE PROVISIONS THEN CAN BE AUTHORITIES BE PERMITTED TO TAKE ACTION AT A NY TIME WHICH IS BEYOND THE COMPREHENSION AS IT WILL LEAD TO GIVE THE POWER T O THE ASSESSING OFFICER TO TAKE AN ACTION EVEN AFTER LAPSE OF INDEF INITE PERIOD. THUS, UNDER THE LAW, UNLIMITED TIME IS NOT PERMISSIBLE TO THE AU THORITIES FOR TAKING ACTION U/S 206C OF THE ACT. THUS, THE LD AR HAS SUBM ITTED THAT THE ITO CANNOT EXERCISE ITS JURISDICTION AFTER LAPSE OF A R EASONABLE TIME WHICH CAN BE CONSIDERED AS A PROPER TIME PERIOD AND LIMITATIO N FOR INITIATION OF PROCEEDINGS AND PASSING THE ORDER U/S 206C OF THE A CT, OTHERWISE IT WOULD RESULT IN UNSETTLING THE FINALITY OF THE MATTER EVE N AFTER AN INDEFINITE PERIOD. HE HAS REFERRED TO THE VARIOUS DECISIONS OF THE HON'BLE HIGH COURTS AS WELL AS THIS TRIBUNAL ON THE POINT WHERE THE COURTS HAVE TAKEN A VIEW THAT THE PERIOD OF FOUR YEARS IS A REASONABLE TIME WITHIN WHICH ANY ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 6 PROCEEDING CAN BE INITIATED AND COMPLETED BUT NOT B EYOND THAT UNLESS OTHERWISE PROVIDED. THUS, THE LD AR HAS SUBMITTED THA T A SIMILAR SITUATION WAS PREVAILING IN RESPECT OF THE ORDERS PASSED U/S 2 01(1) AND 201(1A) OF THE ACT PRIOR TO THE AMENDMENT WHEREBY THE LIMITATIO N WAS PROVIDED UNDER THE SAID PROVISION. THEREFORE, PRIOR TO THE AMENDME NT, VARIOUS COURTS WHILE EXAMINING THE ISSUE HAD HELD THAT A TIME PERIOD OF FOUR YEARS IS A REASONABLE LIMITATION FOR PASSING ORDER U/S 201(1)/ 201(1A) OF THE ACT. HE HAS RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF VODAFONE ESSAR MOBILE SERVICES LTD. VS UNION OF IND IA & ORS. (2016) 385 ITR 436 (DEL) AS WELL AS THE DECISION IN THE CASE OF CIT VS NHK JAPAN BROADCASTING 305 ITR 137. THE LD AR HAS THEN SUBMITT ED THAT FOLLOWING THESE DECISIONS, THE HONBLE GUJARAT HIGH COURT IN THE CASE OF TATA TELESERVICES U/S UNION OF INDIA & ANR. (2016) 385 ITR 497 (GUJ) HAS ALSO REITERATED THE VIEW THAT THE LIMITATION U/S 201 SHA LL BE FOUR YEARS AND THE ORDER PASSED BEYOND TIME LIMIT OF FOUR YEARS IS TIM E BARRED. THE LD AR HAS THEN RELIED UPON THE DECISION OF HONBLE GUJARAT HI GH COURT IN THE CASE OF CIT (TDS) VS. ANAGRAM WELLINGTON ASSETS MANAGEMENT CO . LTD. (2016) 389 ITR 654 (GUJ) AND SUBMITTED THAT THE HONBLE GUJ ARAT HIGH COURT HAS ALSO CONCURRED WITH THE VIEW OF THE HONBLE DELHI HI GH COURT AND HELD THAT THE ASSESSING OFFICER CANNOT BE GIVEN UNRESTRICTED POWERS WHICH CAN BE EXERCISED BEYOND REASONABLE PERIOD OF FOUR YEARS. H ENCE, THE LD AR HAS ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 7 SUBMITTED THAT ON THE SIMILAR ANALOGY, THE ORDER PA SSED BY THE ASSESSING OFFICER DATED 30/3/2016 IS BEYOND THE PERIOD OF FOU R YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE TRANSACTION WAS CARRI ED OUT. HENCE, THE LD AR HAS SUBMITTED THAT THE ORDER PASSED BY THE ASSES SING OFFICER U/S 206C(6)/206C(7) OF THE ACT IS INVALID BEING BARRED BY LIMITATION AND LIABLE TO BE QUASHED. 5. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT WHEN NO LIMITATION IS PROVIDED IN THE STATUTE FOR INITIATION OF ACTION AND PASSING THE ORDER U/S 206C OF THE ACT THEN THERE IS NO BAR ON THE JURISDI CTION AND POWER OF THE ASSESSING OFFICER TO PASS THE ORDER. FURTHER THE DE CISIONS RELIED UPON BY THE LD AR OF THE ASSESSEE ARE NOT APPLICABLE IN THI S CASE AS THOSE DECISIONS ARE IN RESPECT OF ORDERS PASSED U/S 201(1)/201(1A) OF THE ACT AND NOT FOR A FAILURE OF COLLECTION OF TAX. THEREFORE, THE CASE LAWS ARE NOT ON THE POINT OF LIMITATION FOR PASSING THE ORDER U/S 206C(6)/206 C(7) OF THE ACT. HE HAS RELIED UPON THE ORDER OF THE LD. CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT SECTION 206C OR ANY OTHER PROVISIONS OF THE INCOME TAX ACT DO NOT PROVIDE ANY LIMITATION FOR PASSING THE ORDER BY THE ASSESSING OFFICER U/S 206C(6)/206C (7) OF THE ACT HOLDING THE ASSESSEE IN DEFAULT DUE TO FAILURE TO COLLECT T AX AT SOURCE. HOWEVER, ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 8 NON-PROVIDING THE LIMITATION IN THE STATUTE WOULD NO T CONFER THE JURISDICTION/POWERS TO THE ASSESSING OFFICER TO PAS S ORDER U/S 206C AT ANY POINT OF TIME DISREGARDING THE AMOUNT OF TIME LAPSE FROM SUCH DEFAULT OF COLLECTION OF TAX AT SOURCE. IF THE CONTENTION OF T HE REVENUE IS ACCEPTED THAT THE ASSESSING OFFICER IS FREE TO INITIATE THE ACTION AND PASS THE ORDER U/S 206C AT ANY TIME DEPENDING UPON THE CIRCUMSTANC ES OF THE CASE, IT WOULD AMOUNT TO GIVE AN UNFETTERED POWERS TO THE ASSE SSING OFFICER TO TAKE ACTION AT ANY POINT TILL AN INDEFINITE PERIOD. THEREFORE, SUCH INTERPRETATION OR INFERENCE WOULD DEFY OR DEFEAT THE VERY PURPOSE AND SCHEME OF THE STATUTE AND FURTHER THE CONCEPT OF FI NALITY OF MATTERS. HENCE, IN SUCH A SITUATION, A REASONABLE TIME PERIO D IS ALLOWED TO THE TAXING AUTHORITY FOR A PARTICULAR ACTION OR AN ORDE R TO BE PASSED OTHERWISE IT WOULD LEAD TO UNREGULATED POWERS AND AUTHORITIES T O THE TAXING AUTHORITY. THE LAW IS TO BE FOLLOWED BY THE AUTHORITIE S CONCERNED AS WELL AS THE PERSONS GOVERNED BY THE SAID LAW AND THEREFORE, IN ABSENCE OF THE LIMITATION ON THE POWERS OF THE TAXING AUTHORITY, IT WOULD ALLOW THE MISUSE OF SUCH POWERS AND PROVISIONS OF THE ACT. IT IS PERT INENT TO NOTE THAT WHEN A LIMITATION IS NOT PROVIDED IN STATUTE FOR A SPECI FIC PURPOSE THEN THE LIMITATION PROVIDED FOR THE PURPOSE OF COMPLETING T HE ASSESSMENT WOULD BE A PROPER GUIDANCE FOR TAKING THE REASONABLE TIME PE RIOD WITHIN WHICH AN ORDER HAS TO BE PASSED BY THE TAXING AUTHORITY. AN IDENTICAL SITUATION WAS ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 9 PREVAILING IN RESPECT OF THE ORDER PASSED U/S 201(1 )(201(1A) OF THE ACT PRIOR TO THE AMENDMENT VIDE FINANCE ACT, 2009 W.E.F. 01/4/2010 WHEREBY SUBSECTION (3) WAS INSERTED TO SECTION 201 OF THE AC T AND LIMITATION HAS BEEN PROVIDED FOR PASSING THE ORDER U/S 201(1) AND 201(1A) OF THE ACT. WHEN THIS ISSUE OF LIMITATION FOR PASSING THE ORDER U/S 201(1)/201(1A) OF THE ACT CAME BEFORE THE COURTS, IT WAS HELD THAT THE ASSESSING OFFICER CANNOT BE GIVEN UNFETTERED POWERS WHICH CAN BE EXERCI SES EVEN BEYOND A REASONABLE TIME BECAUSE OF NON-PROVIDING THE LIMITA TION IN THE STATUTE. HENCE, THE COURTS HAVE TAKEN A CONSISTENT VIEW THAT REASONABLE TIME PERIOD FOR PASSING THE ORDER U/S 201(1)/201(1A) OF THE ACT WOULD BE FOUR YEARS. THE HONBLE DELHI HIGH COURT IN THE CASE OF C IT VS. NHK JAPAN BROADCASTING (SUPRA) HAS CONSIDERED AND DECIDED THI S ISSUE IN PARA 18 TO 25 AS UNDER: 18. INSOFAR AS THE INCOME-TAX ACT IS CONCERNED, OUR A TTENTION HAS BEEN DRAWN TO SECTION 153(1)(A) THEREOF WHICH PRESCRIBES THE TIME -LIMIT FOR COMPLETING THE ASSESSMENT, WHICH IS TWO YEARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSESSABLE. IT IS WELL-KNOWN THAT THE ASSESSMENT YEAR FOLLOWS THE PREVIOUS YEAR AND, THEREFORE, THE TIME-LIMIT WO ULD BE THREE YEARS FROM THE END OF THE FINANCIAL YEAR. THIS SEEMS TO BE A REASO NABLE PERIOD AS ACCEPTED UNDER SECTION 153 OF THE ACT, THOUGH FOR COMPLETION OF ASSESSMENT PROCEEDINGS. THE PROVISIONS OF RE-ASSESSMENT ARE UNDER SECTIONS 147 AND 148 OF THE ACT AND THEY ARE ON A COMPLETELY DIFFERENT FOOTING AND, THE REFORE, DO NOT MERIT CONSIDERATION FOR THE PURPOSES OF THIS CASE. 19. EVEN THOUGH THE PERIOD OF THREE YEARS WOULD BE A REASONABLE PERIOD AS PRESCRIBED BY SECTION 153 OF THE ACT FOR COMPLETION OF PROCEEDINGS, WE HAVE BEEN TOLD THAT THE INCOME-TAX APPELLATE TRIBUNAL HA S, IN A SERIES OF DECISIONS, SOME OF WHICH HAVE BEEN MENTIONED IN THE ORDER WHIC H IS UNDER CHALLENGE BEFORE US, TAKEN THE VIEW THAT FOUR YEARS WOULD BE A REASONABLE PERIOD OF TIME FOR INITIATING ACTION, IN A CASE WHERE NO LIMITATIO N IS PRESCRIBED. ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 10 20. THE RATIONALE FOR THIS SEEMS TO BE QUITE CLEAR - IF THERE IS A TIME-LIMIT FOR COMPLETING THE ASSESSMENT THEN THE TIME-LIMIT FOR I NITIATING THE PROCEEDINGS MUST BE THE SAME IF NOT LESS. NEVERTHELESS, THE TRI BUNAL HAS GIVEN A GREATER PERIOD FOR COMMENCEMENT OR INITIATION OF PROCEEDING S. 21. WE ARE NOT INCLINED TO DISTURB THE TIME-LIMIT OF FOUR YEARS PRESCRIBED BY THE TRIBUNAL AND ARE OF THE VIEW THAT IN TERMS OF THE D ECISION OF THE SUPREME COURT IN BHATINDA DISTRICT CO-OP. MIL (P.) UNION LTD.S C ASE (SUPRA) ACTION MUST BE INITIATED BY THE COMPETENT AUTHORITY UNDER THE INCO ME-TAX ACT WHERE NO LIMITATION IS PRESCRIBED AS IN SECTION 201 OF THE A CT WITHIN THAT PERIOD OF FOUR YEARS. 22. LEARNED COUNSEL FOR THE REVENUE SUBMITTED THAT TH E DEPARTMENT CAME TO KNOW THAT THE ASSESSEE WAS AN ASSESSEE IN DEFAULT ONLY I N NOVEMBER, 1998 WHEN A SURVEY WAS CONDUCTED AND IT CAME TO BE KNOWN ONLY T HEN THAT WHEN THE ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE ON THE GLOB AL SALARY. WE ARE OF THE OPINION THAT THE DATE OF KNOWLEDGE IS NOT RELEVANT FOR THE PURPOSES OF EXERCISING JURISDICTION INSOFAR AS THE PROVISIONS OF THE INCOM E-TAX ACT ARE CONCERNED. IF IT WERE SO, THE LIMITATION PERIOD, AS FOR EXAMPLE PRES CRIBED UNDER SECTION 147/148 OF THE ACT WOULD BECOME MEANINGLESS IF THE CONCEPT OF KNOWLEDGE IS IMPORTED INTO THE SCHEME OF THE ACT. 23. THE SECOND PART OF THE ARGUMENT OF LEARNED COUNSE L FOR THE REVENUE IN THIS REGARD WAS THAT THE QUESTION OF LIMITATION DID NOT AT ALL ARISE BECAUSE THE ASSESSEE HAD ITSELF ADMITTED ITS LIABILITY AND IT V OLUNTARILY PAID THE TAX AND INTEREST ON THAT AMOUNT. AGAIN, WE ARE NOT IN AGREE MENT WITH LEARNED COUNSEL FOR THE REVENUE IN THIS REGARD. 24. IT APPEARS THAT THE ASSESSEE PAID THE TAX VOLUNTA RILY AS WELL AS INTEREST THEREON BUT THE ACCEPTANCE OF THE LIABILITY BY THE ASSESSEE WOULD NOT BY ITSELF EXTEND THE PERIOD OF LIMITATION NOR WOULD IT EXTEND THE REASON ABLE TIME THAT IS POSTULATED BY THE SCHEME OF THE INCOME-TAX ACT. THE ASSESSEE CANN OT BE PUT, IN A SENSE, IN A WORSE POSITION MERELY BECAUSE IT HAS ADMITTED ITS L IABILITY. IF THE ASSESSEE HAD DENIED ITS LIABILITY THE QUESTION THAT WOULD HAVE A RISEN WOULD BE WHETHER THE REVENUE COULD HAVE INITIATED PROCEEDINGS AFTER A LA PSE OF FOUR YEARS. THE ANSWER TO THAT WOULD OF COURSE HAVE TO BE IN THE NEGATIVE IN VIEW OF THE REASON THAT WE HAVE ALREADY INDICATED ABOVE. THE FACT THAT THE ASS ESSEE AGREED TO PAY THE TAX VOLUNTARILY CANNOT PUT THE ASSESSEE IN A SITUATION WORSE THAN IF IT HAD CONTESTED ITS LIABILITY. 25. WE MAY ALSO NOTE THAT UNDER SECTION 191 OF THE AC T, THE PRIMARY LIABILITY TO PAY TAX IS ON THE PERSON WHOSE INCOME IT IS THAT IS THE DEDUCTEE. OF COURSE, A DUTY IS CAST UPON THE DEDUCTOR, THAT IS THE PERSON WHO IS M AKING THE PAYMENT TO THE DEDUCTEE, TO DEDUCT TAX AT SOURCE BUT IF HE FAILS T O DO SO, IT DOES NOT WASH AWAY THE LIABILITY OF THE DEDUCTEE. IT IS STILL THE LIAB ILITY OF THE DEDUCTEE TO PAY THE TAX. IN THAT SENSE, THE LIABILITY OF THE DEDUCTOR IS A V ICARIOUS LIABILITY AND, THEREFORE, HE CANNOT BE PUT IN A SITUATION WHICH WOULD PREJUDICE HIM TO SUCH AN EXTENT THAT THE LIABILITY WOULD REMAIN HANGING ON HIS HEAD FOR ALL TIMES TO COME IN THE EVENT THE INCOME-TAX DEPARTMENT DECIDES NOT TO TAKE ANY A CTION TO RECOVER THE TAX EITHER BY PASSING AN ORDER UNDER SECTION 201 OF THE ACT OR THROUGH MAKING AN ASSESSMENT OF THE INCOME OF THE DEDUCTEE. ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 11 THE HON'BLE HIGH COURT WAS OF THE VIEW THAT THE TIME L IMIT FOR COMPLETING THE ASSESSMENT AS PER SECTION 153(1)(A) IS TWO YEARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSESSA BLE WHICH WAS CONSIDERED AS REASONABLE PERIOD FOR PASSING THE ORD ER U/S 201(1)/201(1A) OF THE ACT. THE HON'BLE HIGH COURT HAS TURNED DOWN T HE CONTENTION OF LIMITATION PROVIDED U/S 147/148 OF THE ACT AND HENC E, IT WAS OBSERVED THAT THREE YEARS WOULD BE A REASONABLE PERIOD AS PRESCRIB ED BY SECTION 153 FOR COMPLETION OF PROCEEDINGS. HOWEVER, SINCE THE TRIBUNA L IN A SERIES OF DECISIONS HAD TAKEN A VIEW THAT THE PERIOD WITHIN WHIC H THE ORDER U/S 201(1)/201(1A) SHALL BE PASSED WOULD BE FOUR YEARS A ND THEREFORE, THE HON'BLE HIGH COURT HAS REFRAINED FROM DISTURBING TH E VIEW TAKEN BY THIS TRIBUNAL. FOLLOWING THE SAID DECISION, THE HONBLE DE LHI HIGH COURT IN A SUBSEQUENT DECISION IN THE CASE OF VODAFONE ESSAR M OBILE SERVICES LTD. VS UNION OF INDIA & ORS. (SUPRA) HAS REITERATED THE VI EW TAKEN IN THE CASE OF CIT VS NHK JAPAN BROADCASTING (SUPRA). THE HONBLE GU JARAT HIGH COURT IN THE CASE OF TATA TELESERVICES VS. UNION OF INDIA & AN R. (SUPRA) HAS HELD IN PARAS 15 AND 16 AS UNDER: 15. CONSIDERING THE LAW LAID DOWN BY THE HON'BLE SUPR EME COURT IN THE AFORESAID DECISIONS, TO THE FACTS OF THE CASE ON HA ND AND MORE PARTICULARLY CONSIDERING THE FACT THAT WHILE AMENDING SECTION 20 1 BY FINANCE ACT, 2014, IT HAS BEEN SPECIFICALLY MENTIONED THAT THE S AME SHALL BE APPLICABLE W.E.F. 1/10/2014 AND EVEN CONSIDERING THE FACT THAT PROCEEDINGS FOR F.Y. 2007-08 AND 2008-09 HAD BECOME TIME BARRED AND/OR F OR THE AFORESAID FINANCIAL YEARS, LIMITATION UNDER SECTION 201(3)(I) OF THE ACT HAD ALREADY EXPIRED ON 31/3/2011 AND 31/3/2012, RESPECTIVELY, M UCH PRIOR TO THE ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 12 AMENDMENT IN SECTION 201 AS AMENDED BY FINANCE ACT, 2014 AND THEREFORE, AS SUCH A RIGHT HAS BEEN ACCRUED IN FAVO UR OF THE ASSESSEE AND CONSIDERING THE FACT THAT WHEREVER LEGISLATURE WANT ED TO GIVE RETROSPECTIVE EFFECT SO SPECIFICALLY PROVIDED WHILE AMENDING SECT ION 201(3) (II) OF THE ACT AS WAS AMENDED BY FINANCE ACT, 2012 WITH RETROS PECTIVE EFFECT FROM 1/4/2010, IT IS TO BE HELD THAT SECTION 201(3), AS AMENDED BY FINANCE ACT NO.2 OF 2014 SHALL NOT BE APPLICABLE RETROSPECTIVEL Y AND THEREFORE, NO ORDER UNDER SECTION 201(I) OF THE ACT CAN BE PASSED FOR WHICH LIMITATION HAD ALREADY EXPIRED PRIOR TO AMENDED SECTION 201(3) AS AMENDED BY FINANCE ACT NO.2 OF 2014. UNDER THE CIRCUMSTANCES, THE IMPUGNED NOTICES / SUMMONSES CANNOT BE SUSTAINED AND THE SAME DESERV E TO BE QUASHED AND SET ASIDE AND WRIT OF PROHIBITION, AS PRAYED FOR, D ESERVES TO BE GRANTED. 16. IN VIEW OF THE ABOVE AND FOR THE REASONS STATED ABO VE, ALL THESE PETITIONS SUCCEED. THE IMPUGNED NOTICES / SUMMONSES ARE HELD TO BE INVALID AND THE SAME ARE HEREBY QUASHED AND SET ASIDE AND THE RESPO NDENTS HEREIN ARE HEREBY RESTRAINED BY WRIT OF PROHIBITION FROM PROCE EDINGS WITH THE IMPUGNED NOTICES / SUMMONSES WHICH ARE, AS SUCH, HE REBY QUASHED AND SET ASIDE. RULE IS MADE ABSOLUTE ACCORDINGLY IN EACH OF THE PETITIONS. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THERE SHALL BE NO ORDER AS TO COSTS. THUS, THE HON'BLE HIGH COURT HAS SPECIFICALLY DEALT WITH THE ISSUE OF APPLICABILITY OF AMENDMENT BROUGHT TO THE PROVISION S OF SECTION 201 OF THE ACT AND HELD THAT THE PROCEEDINGS IN THE ASSESSMENT YEAR 2007-08 AND 2008-09 HAD BECOME TIME BARRED AS THE LIMITATION U/ S 201(3) HAS ALREADY EXPIRED AND OTHERWISE AMENDMENT CANNOT BE APPLICABLE RETROSPECTIVELY. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT (TD S) VS. ANAGRAM WELLINGTON ASSETS MANAGEMENT CO. LTD. (SUPRA) HAS A GAIN CONSIDERED THIS ISSUE AND HELD IN PARA 7 AS UNDER: 7. IT IS TRUE THAT IT IS THE DUTY OF THE ASSESSEE TO DEDUCT TDS AND THE QUESTION IS WHETHER IT IS LIKELY TO CAUSE ANY LOSS TO THE REVEN UE IF IT IS NOT DEDUCTED IN TIME. IF TDS IS NOT DEDUCTED, IT IS REQUIRED TO BE PAID IN T HE FIRST INSTALLMENT OF ADVANCE TAX, WHICH IS REQUIRED TO BE PAID WITHIN FOUR MONTH S FROM THE DATE OF FILING OF RETURN. THEREFORE, EVEN IF THE CONTENTION OF MR. BH ATT IS ACCEPTED, LOSS THAT MAY BE CAUSED TO THE REVENUE IS ONLY TO THE TUNE OF INT EREST OF FOUR MONTHS ON DELAYED PAYMENT OF TAX. NOT ONLY THAT WHEN THE DECLARATION ABOUT THIS IS MADE IN THE RETURN, IT COMES WITHIN THE KNOWLEDGE OF THE ASSESS ING OFFICER EVEN IF THE TDS IS ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 13 NOT DEDUCTED. THEREFORE, WE ARE OF THE VIEW THAT TH E PERIOD OF FOUR YEARS IS REASONABLE PERIOD AND WE CONCUR WITH THE VIEW TAKEN BY THE DELHI HIGH COURT. IT IS TRUE THAT THE COURT CANNOT LEGISLATE THE ACT, HOWEV ER, THE ASSESSING OFFICER ALSO CANNOT BE GIVEN UNFETTERED POWERS, WHICH HE CAN EXE RCISE EVEN BEYOND THE REASONABLE PERIOD OF FOUR YEARS. THEREFORE, IN OUR VIEW, PERIOD OF FOUR YEARS IS JUST AND PROPER AND THE TRIBUNAL HAS NOT COMMITTED ANY E RROR WHILE PASSING THE IMPUGNED ORDER. THEREFORE, ALL THESE APPEALS ARE DI SMISSED. THE QUESTIONS POSED FOR OUR CONSIDERATION ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THUS, FOUR YEARS TIME PERIOD WAS CONSIDERED AS REASON ABLE PERIOD FOR PASSING THE ORDER U/S 201(1)/201(1A) OF THE ACT. WE FIND THAT THE SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE ANDHRA PRADESH HI GH COURT IN THE CASE OF CIT VS. U.B. ELECTRONICS INSTRUMENTS LTD. (2015) 371 ITR 314 (AP) AS WELL AS BY THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT(TDS) & ANR. VS BHARAT HOTELS LIMITED (2016) 384 ITR 77 (KARN.). THE HONBLE KARNATAKA HIGH COURT HAS DEALT THIS ISSUE IN PARA 23 TO 27 AS UNDER: 23. IN THE MEMORANDUM EXPLAINING THE PROVISIONS IN THE FINANCE (II) BILL, 2009, IT WAS CLEARLY STATED THAT 'TO PROVIDE SUFFICIENT T IME FOR PENDING CASES, IT IS PROPOSED TO PROVIDE THAT SUCH PROCEEDINGS FOR A FIN ANCIAL YEAR BEGINNING FROM 1ST APRIL, 2007 AND EARLIER YEARS CAN BE COMPL ETED BY THE 31ST MARCH, 2011. AS SUCH, THE MEMORANDUM ITSELF CLARIFIED THAT THE PROVISO IS FOR PENDING CASES, AND NOT DECIDED CASES. THE CIRCULAR DATED 3.6.2010, ISSUED BY THE CBDT, ALSO CLEARLY SPECIFIES THAT THE SAID P ROVISO WOULD BE FOR PENDING CASES AND NOT DECIDED CASES. WITH REGARD TO THE APPLICABILITY OF THE AMENDMENT MADE BY THE FINANCE ACT, 2009 WITH EFFECT FROM 1.4.2010, IT WAS ALSO CLARIFIED TO BE FROM THE ASSESSMENT YEAR 2 011-12 AND SUBSEQUENT YEARS. AS SUCH, IT IS CLEAR THAT PROVISO TO SUB-SEC TION (3) DID NOT LEGALIZE THE CASES WHERE ACTION HAD ALREADY BEEN TAKEN, BUT WAS MEANT FOR ONLY SUCH CASES WHICH WERE PENDING AT THE TIME OF INSERTION O F SUB-SECTION (3) TO SECTION 201 OF THE ACT. 24. THUS, FOR THE REASONS GIVEN ABOVE, WE FIND THAT THE TRIBUNAL WAS CORRECT IN HOLDING THAT THE ORDER PASSED UNDER SEC.201 (1) AND (1A) OF THE ACT ON 28.1.2008 FOR THE ASSESSMENT YEAR 2002-03, WOULD BE BARRED BY LIMITATION AS THE PERIOD OF LIMITATION WOULD BE FOUR YEARS FROM T HE END OF THE FINANCIAL YEAR IN QUESTION. AS SUCH, WE ANSWER THE FIRST QUES TION RAISED IN THIS APPEAL, IN FAVOUR OF THE RESPONDENT ASSESSEE AND AGAINST TH E REVENUE. ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 14 QUESTION NO.2; 25. NOW, COMING TO THE SECOND QUESTION OF LAW, IT IS TR UE THAT IN VIEW OF THE FIRST QUESTION HAVING BEEN DECIDED IN FAVOUR OF THE ASSES SEE, THIS QUESTION REMAINS ONLY ACADEMIC IN NATURE. HOWEVER, SINCE THE QUESTION WOULD BE RELEVANT FOR THE OTHER ASSESSMENT YEARS (MORE PARTI CULARLY, ASSESSMENT YEAR 2004-05 AND 2005-06), THE APPEALS REGARDING WHICH A SSESSMENT YEARS ARE ALSO CONNECTED WITH THIS APPEAL, LEARNED COUNSEL FO R BOTH THE PARTIES SUBMITTED THAT THIS QUESTION MAY ALSO BE CONSIDERED AND DECIDED IN THIS APPEAL, WHICH WOULD THEN GOVERN THE OTHER APPEALS O F THE REVENUE FILED AGAINST THE SAME ASSESSEE. 26. SRI K V ARAVIND, LEARNED COUNSEL FOR THE REVENUE HA S SUBMITTED THAT SUB- SECTION (1A) OF SECTION 201 OF THE ACT PROVIDES FOR PAYMENT OF INTEREST. THE SUB-SECTION, AS IT STOOD AT THE RELEVANT TIME, PRIO R TO 1.7.2010, READS AS UNDER: '(1A) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SE CTION (1), IF ANY SUCH PERSON, PRINCIPAL OFFICER OR COMPANY AS IS REFERRED TO IN THAT SUB-SECTION DOES NOT DEDUCT THE WHOLE OR ANY PART OF THE TAX OR AFTE R DEDUCTING FAILS TO PAY THE TAX AS REQUIRED BY OR UNDER THIS ACT, HE OR IT SHAL L BE LIABLE TO PAY SIMPLE INTEREST AT 'ONE PER CENT FOR EVERY MONTH OR PART O F A MONTH ON THE AMOUNT OF SUCH TAX FROM THE DATE ON WHICH SUCH TAX WAS DEDUCT IBLE TO THE DATE ON WHICH SUCH TAX IS ACTUALLY PAID AND SUCH INTEREST S HALL BE PAID BEFORE FURNISHING THE STATEMENT IN ACCORDANCE WITH THE PRO VISIONS OF SUB-SECTION (3) OF SECTION 200.' THE SAID SUB-SECTION CLEARLY PROVIDES THAT INTERES T WOULD BE PAYABLE FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTIBLE, I.E., TH E DATE WHEN PAYMENT WAS MADE BY THE ASSESSEE TO THE RECIPIENT; TILL THE DAT E ON WHICH SUCH TAX WAS ACTUALLY PAID, I.E., TAX WAS DEPOSITED BY THE RECIP IENT. 27. THE PROVISION FOR TAX DEDUCTION AT SOURCE IS ONLY A MECHANISM FOR COLLECTION OF TAX BY THE PAYER, EVEN THOUGH THE LIABILITY TO P AY TAX IS THAT OF THE RECIPIENT. THE PROVISION FOR PAYMENT OF INTEREST UN DER SUB-SECTION (1A) OF SECTION 201 OF THE ACT IS ONLY OF COMPENSATORY NATU RE. IT CANNOT BE A MEANS TO PENALISE THE PAYER. THE PROVISION FOR PAYMENT OF INTEREST WOULD ARISE FROM THE DATE WHEN IT OUGHT TO HAVE BEEN DEDUCTED I .E., FROM THE DATE OF PAYMENT BY THE PAYER TO THE RECIPIENT. THE LIABILIT Y TO PAY INTEREST WOULD END ON THE DATE WHEN SUCH TAX HAS BEEN DEPOSITED BY THE RECIPIENT, EITHER BY WAY OF ADVANCE TAX OR ALONG WITH THE RETURN OF INCO ME. INTEREST, HEREIN, BEING COMPENSATORY IN NATURE, CANNOT BE THUS CHARGE D FOR THE PERIOD BEYOND THE DATE WHEN SUCH TAX HAS ALREADY BEEN DEPOSITED B Y THE RECIPIENT. IF THE REVENUE IS PERMITTED TO CHARGE INTEREST EVEN AFTER THE RECIPIENT HAS DEPOSITED THE TAX, THE SAME WOULD AMOUNT TO UNDUE E NRICHMENT OF THE REVENUE, AS EVEN AFTER RECEIVING THE TAX, IT WOULD CONTINUE TO GET INTEREST ON THE AMOUNT WHICH HAS ALREADY BEEN PAID OR DEPOSITED WITH IT. AS SUCH, THE LIABILITY OF THE ASSESSEE HEREIN WOULD NOT BE FOR P AYMENT OF INTEREST AFTER THE PERIOD OF DEPOSIT OF TAX BY THE RECIPIENT. ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 15 THUS, A CONSISTENT VIEW HAS BEEN TAKEN BY THE VARIOUS HON'BLE HIGH COURTS ON THIS ISSUE THAT WHEN NO LIMITATION IS PROVIDED IN THE STATUTE THEN A PERIOD OF FOUR YEARS IS CONSIDERED AS REASONABLE FO R PASSING THE ORDER U/S 201(1)/201(1A) OF THE ACT. THE PROVISIONS OF SECTIO N 206C OF THE ACT ARE ANALOGOUS AND A MEASURE FOR COMPLIANCE OF COLLECTIO N OF TAX AT SOURCE AS A SIMILAR MEASURE FOR COMPLIANCE OF DEDUCTION OF TAX AT SOURCE IS PROVIDED U/S 201 OF THE ACT. THE DEPARTMENT HAS ACCEPTED THOS E DECISIONS AND CONSEQUENTLY BROUGHT AMENDMENT TO THE PROVISIONS OF SECTION 201 AND THEREBY PROVIDED THE LIMITATION FOR PASSING THE ORD ERS U/S 201(1)/201(1A) OF THE ACT WHICH WAS INLINE WITH THE VIEW TAKEN BY THE HON'BLE HIGH COURTS ON THIS ISSUE. THOUGH, SUBSEQUENTLY AN AMENDMENT VI DE FINANCE ACT, 2014 WAS AGAIN BROUGHT IN THE SAID PROVISIONS OF SECTION 201 ENLARGING THE PERIOD OF LIMITATION, HOWEVER, THE SAID AMENDMENT IS NOT RETROSPECTIVE. ACCORDINGLY, THE LIABILITY OF TAX COLLECTED AT SOUR CE IS ALSO A VICARIOUS LIABILITY OF THE ASSESSEE TO ASSIST THE DEPARTMENT IN THE MEASURE TO AVOID ANY POSSIBILITY OF TAX AVOIDANCE BY THE PERSONS WITH WHOM THE SPECIFIC TRANSACTIONS HAVE BEEN ENTERED INTO BY THE ASSESSEE . THEREFORE, IN OUR CONSIDERED OPINION, THE ANALOGY AND REASONING GIVEN IN THE DECISIONS OF VARIOUS HON'BLE HIGH COURTS CITED SUPRA IN RESPECT OF THE LIMITATION FOR PASSING THE ORDER U/S 201 OF THE ACT, IS ALSO APPLI CABLE FOR CONSIDERING THE REASONABLE TIME PERIOD FOR PASSING THE ORDER U/S 20 6C OF THE ACT. THE ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 16 PROVISIONS OF SECTION 201 AND 206C OF THE ACT ARE H AVING SAME SCHEME AND OBJECT BEING THE MEASURES AGAINST THE AVOIDANCE OF TAX BY THE OPPOSITE PARTIES WITH WHOM THE ASSESSEE HAD THE TRANS ACTIONS. HENCE, APPLYING THE REASONABLE PERIOD OF LIMITATION AS FOU R YEARS WITHIN WHICH THE ASSESSING OFFICER COULD PASS THE ORDER U/S 206C(6)/ 206C(7) OF THE ACT, WE HOLD THAT THE IMPUGNED ORDER PASSED BY THE ASSESSIN G OFFICER ON 30/3/2016 IS BEYOND THE SAID REASONABLE PERIOD OF L IMITATION AND CONSEQUENTLY IS INVALID BEING BARRED BY LIMITATION. ACCORDINGLY, WE QUASH THE IMPUGNED ORDER PASSED U/S 206C(6)/206C(7) OF TH E ACT. 7. SINCE, WE HAVE QUASHED THE ORDER PASSED U/S 206C( 6)/206C(7) OF THE ACT, THEREFORE, THE OTHER ISSUES RAISED ON THE MERITS OF THE ISSUE IN THE CROSS APPEALS BECOME INFRUCTUOUS. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND THAT OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/08/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29 TH AUGUST, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO (TDS-3), JAIPUR. ITA 316 & 248/JP/2018_ ITO VS. EID MOHAMMAD NIZAMUDDIN. 17 2. IZR;FKHZ @ THE RESPONDENT- M/S EID MOHAMMAD NIZAMUDDIN, TONK. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 316 & 248/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR