HATHWAY CABLE & DATACOM LTD, MUMBAI V. TRO (TDS) RG 1, MUMBAI

ITA 3512/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3349 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: H
• Next Hearing Date: 23-08-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 16-05-2014
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: MANOJ DIXIT
• Keywords: Reopening of assessment; Recovery proceedings; Period of limitation; Time period of passing order; Reassessment proceedings
• Section: 143(3); 133A; 194C; 201(1); 147; 148; 144

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NOS.3512 TO 3514/MUM/2014 ASSESSMENT YEARS: 2002-03 TO 2004-05 HATHWAY CABLE AND DATACOM LIMITED (FORMERLY KNOWN AS HATHWAY CABLE AND DATACOM PVT. LTD.) RAHEJAS, 1ST FLOOR, CORNERS OF MAIN AVENUE & V.P. ROAD, SANTA CRUZ(W), MUMBAI -400054 / VS. THE TAX RECOVERY OFFICER (TDS), RG.-1, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BLDG. CHARNI ROAD, (WEST), MUMBAI-400020 ( ! ' /ASSESSEE) ( # / REVENUE) PAN. NO . AAACC6814B 2 ITA NO.4261/MUM/2014 ASSESSMENT YEAR: 2002-03 HATHWAY C - NET PRIVATE LIMITED RAHEJAS, 4 TH FLOOR, CORNERS OF MAIN AVENUE & V.P. ROAD, SANTA CRUZ(W), MUMBAI -400054 / VS. THE TAX RECOVERY OFFICER (TDS), RG.-1, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BLDG. CHARNI ROAD, (WEST), MUMBAI-400020 ( ! ' /ASSESSEE) ( # / REVENUE) PAN. NO. AAACH8338K ITA NO.6996/MUM/2014 ASSESSMENT YEAR: 2001-02 HATHWAY C - NET PRIVATE LIMITED RAHEJAS, 4 TH FLOOR, CORNERS OF MAIN AVENUE & V.P. ROAD, SANTA CRUZ(W), MUMBAI -400054 / VS. THE TAX RECOVERY OFFICER (TDS), RG.-1, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BLDG. CHARNI ROAD, (WEST), MUMBAI-400020 ( ! ' /ASSESSEE) ( # / REVENUE) PAN. NO. AAACH8338K ITA NO.4262/MUM/2014 ASSESSMENT YEAR:2002-03 HATHWAY NASIK CABLE NETWORK PRIVATE LIMITED, RAHEJAS, 4 TH FLOOR, CORNERS OF MAIN AVENUE & V.P. ROAD, SANTA CRUZ(W), MUMBAI -400054 / VS. THE TAX RECOVERY OFFICER (TDS), RG.-1, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BLDG. CHARNI ROAD, (WEST), MUMBAI-400020 ( ! ' /ASSESSEE) ( # / REVENUE) PAN. NO. AAACH9070Q 3 ITA NOS. 5371, 4263 & 4264 /MUM/2014 ASSESSMENT YEARS: 2002-03, 2003-04 & 2004-05 HATHWAY KRISHNA CABLE PRIVATE LIMITED, RAHEJAS, 4 TH FLOOR, CORNERS OF MAIN AVENUE & V.P. ROAD, SANTA CRUZ(W), MUMBAI -400054 / VS. THE TAX RECOVERY OFFICER (TDS), RG.-1, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BLDG. CHARNI ROAD, (WEST), MUMBAI-400020 ( ! ' /ASSESSEE) ( # / REVENUE) PAN. NO. AAACH9633H ITA NOS.6995, 6997, 6998 & 5372/MUM/2014 ASSESSMENT YEARS: 2001-02, 03-04, 02-03 & 04-05 HATHWAY VCN CABLENET PRIVATE LIMITED, RAHEJAS, 4 TH FLOOR, CORNERS OF MAIN AVENUE & V.P. ROAD, SANTA CRUZ(W), MUMBAI -400054 / VS. THE TAX RECOVERY OFFICER (TDS), RG.-1, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BLDG. CHARNI ROAD, (WEST), MUMBAI-400020 ( ! ' /ASSESSEE) ( # / REVENUE) PAN. NO. AAACCP2729A ! ' / ASSESSEE BY SHRI NITESH JOSHI & SHRI MANOJ DIXIT # / REVENUE BY SHRI RAJESH KUMAR YADAV - DR $ #% & ' ' / DATE OF HEARING : 24/08/2016 & ' ' / DATE OF ORDER: 07/09/2016 / O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS BUNCH OF THIRTEEN APPEALS PERTAINS TO HATHWAY GROUP AGAINST THE ORDERS OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI. THE ASSESSEE HAS TAKEN ADDITION AL 4 GROUND TO THE EFFECT THAT THE ORDER PASSED BY THE A SSESSING OFFICER U/S 201(1) AND 201(1A) HAS NOT BEEN PASSED WITHIN A REASONABLE TIME AND HENCE THE SAID ORDER IS BARRED BY LIMITATION. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESS EE, SHRI NITESH JOSHIT ALONG WITH SHRI MANOJ DIXIT, CON TENDED THAT FOR ASSESSMENT YEAR 2001-02, THE TRIBUNAL IN T HE CASE OF ASSESSEE ITSELF, VIDE ORDER DATED 01/06/2016 (IT A NO.1810/MUM/2012), CONSIDERED IDENTICAL ISSUE AND FOLLOWING THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DIT VS MAHINDRA & MAHINDRA LTD. (201 4) 365 ITR 560 (BOM.) AND THE DECISION OF THE SPECIAL BENC H OF THE TRIBUNAL IN THE SAME CASE DECIDED IN FAVOUR OF THE ASSESSEE. 2.1. ON THE OTHER HAND, THE LD. DR, SHRI RAJESH KU MAR YADAV, DEFENDED THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) BY CONTENDING THAT IN THE CASE OF HINDUST AN TIMES LTD. VS UOI (AIR 1999 SC 688)(SC), HELD THAT WHERE THE LEGISLATURE HAS MADE NO PROVISION FOR LIMITATION, I T COULD NOT BE OPEN TO THE COURT TO INTRODUCE SUCH LIMITATION O N THE GROUNDS OF FAIRNESS OR JUSTICE. RELIANCE WAS ALSO P LACED UPON THE DECISION FROM HONBLE PUNJAB & HARYANA HIGH COU RT IN THE CASE OF CIT (TDS) CHANDIGARH VS HMT LTD. IT WA S SUBMITTED THAT NO LIMIT IS PRESCRIBED IN THE INCOME TAX ACT, 1961 FOR AN ORDER TO BE PASSED U/S 201(1) AND 201(1 A) OF THE ACT. 5 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE CO MING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RE LEVANT PORTION FROM THE ORDER DATED 01/06/2016, IN THE CAS E OF ASSESSEE FOR ASSESSMENT YEAR 2001-02 (ITA NO.1810/MUM/2014) FOR READY REFERENCE AND ANALYSIS: - THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 20.12.2013 PASSED BY LEARNED CIT(A)-14, MUMBAI. 2. GROUNDS OF APPEAL RELATE TO THE DEMAND RAISED U/ S. 201(1) AND INTEREST CHARGED U/S. 201(1A) OF THE ACT. 3. THE ASSESSEE HAS ALSO RAISED A GROUND URGING THA T THE ORDER PASSED BY THE ASSESSING OFFICER IS BARRED BY LIMITATION. 4. THE FACTS RELATING TO THE RELATING TO LIMITATIO N ARE DISCUSSED IN BRIEF. THE REVENUE CARRIED OUT A SURVEY OPERATION U /S. 133A OF THE ACT IN A GROUP CONCERN OF THE ASSESSEE ON 17.09.2003. T HE ASSESSEE WAS ALSO OPERATING FROM THE VERY SAME PREMISES AND HENC E DETAILS PERTAINING TO THE ASSESSEE WERE ALSO GATHERED. DURI NG THE COURSE OF SURVEY PROCEEDINGS, THE FINANCIAL STATEMENTS OF THE ASSESSEE WERE ALSO EXAMINED AND IT WAS NOTICED THAT THE ASSESSEE HAS N OT DEDUCTED TAX AT SOURCE ON THE EXPENDITURE INCURRED AS PAY CHANNEL COST. THE AO TOOK THE VIEW THAT THE ASSESSEE SHOULD HAVE DEDUCTE D TAX AT SOURCE U/S 194C OF THE ACT ACCORDINGLY, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE ON 23.9.2003 AND THE SAME WAS SERVED UPON THE ASSESSEE ON 24.09.2003. FINALLY THE AO (HERE TRO(TDS)) PASSED ORDER ON 28 .3.2011 RAISING DEMAND U/S 201(1) AND CHARGING INTEREST U/S 201(1A) OF THE ACT. THE LD CIT(A) ALSO CONFIRMED THE ORDER OF THE AO ON MAJ ORITY OF THE ISSUES, BUT GAVE PARTIAL RELIEF WITH REGARD TO THE PERIOD FOR COMPUTING INTEREST U/S 201(1A) OF THE ACT. 5. IN THE APPEAL FILED BEFORE US CHALLENGING THE OR DER PASSED BY LD CIT(A), THE ASSESSEE HAS URGED A LEGAL ISSUE BEFORE US, I.E., THE CONTENTION OF THE ASSESSEE IS THAT THE ORDER PASSED BY THE AO IS BARRED BY LIMITATION. SINCE THIS IS A LEGAL ISSUE AND THE FACTS RELATING THERETO ARE ALREADY AVAILABLE ON RECORD, WE ADMIT THE SAME. WE HAVE NOTICED IN THE PRECEDING PARAGRAPH THAT THE ASSESSING OFFIC ER HAS PASSED THE IMPUGNED ORDER ON 28.3.2011 IN PURSUANCE OF NOTICE ISSUED ON 23.9.2003, I.E., HE HAS PASSED THE ORDER AFTER EXPI RY OF EIGHT YEARS 6 FROM THE DATE OF ISSUING OF NOTICE. IT IS PERTINENT TO NOTE THAT THE INCOME TAX ACT DOES NOT PRESCRIBE ANY TIME LIMIT FO R INITIATION OF PROCEEDINGS U/S 201(1) AND ALSO FOR PASSING ORDER A FTER INITIATION OF PROCEEDINGS. 6. THE LD A.R RELIED ON THE DECISION RENDERED BY T HE JURISDICTIONAL HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF D IT VS. MAHINDRA AND MAHINDRA LTD (2014)(365 ITR 560). THE ABOVE SAID DECISION HAS BEEN RENDERED BY THE HONBLE HIGH COUR T ON THE APPEAL FILED BY THE REVENUE CHALLENGING THE DECISION RENDE RED BY THE SPECIAL BENCH. THE SPECIAL BENCH OF TRIBUNAL HAD RENDERED ITS DECI SION ON THE ISSUE OF LIMITATION PERIOD AS UNDER:- (A) THE PROCEEDINGS U/S 201(1) CAN BE INITIATED IN T HE EXTENDED PERIOD OF SIX YEARS FROM THE END OF THE RELEVANT ASSE SSMENT YEAR IF THE INCOME BY VIRTUE OF SUM PAID WITHOUT DEDUCTION OF TAX AT SOURCE BY THE PAYER CHARGEABLE TO TAX IN THE HANDS OF THE PAYEE IS EQUAL TO OR MORE THAN ONE LAKH RUPEES. IF ON THE OTHER HAD SUCH AM OUNT IS LESS THAN RS.1 LAKH, THEN THE LOWER PERIOD OF FOUR YEA RS AS PRESCRIBED U/S 149(1)(A) FROM THE END OF THE RELEVANT ASSESSMEN T YEAR AVAILABLE FOR INITIATION OF PROCEEDINGS U/S 201(1). (B) THE COMPLETION OF PROCEEDINGS U/S 201(1), THAT IS THE PASSING OF THE ORDER UNDER THIS SUB-SECTION, HAS TO BE WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH PROCEEDINGS U/S 201 (1) WERE INITIATED. THE SAME TIME LIMITS FOR INITIATION AND P ASSING OF ORDERS WILL BE VALID FOR THE PASSING OF ORDER UNDER SECTION 201(1A) ALSO. 7. THE ASSESSEE CHALLENGED THE FIRST PART OF THE DE CISION (PARA (A)) AND THE REVENUE CHALLENGED THE SECOND PART OF THE DECIS ION (PARA(B)) SUPRA. THE HONBLE HIGH COURT DISPOSED OF THE APPEA L FILED BY THE REVENUE BY UPHOLDING THE VIEW TAKEN BY THE TRIBUNAL IN PARA (B) SUPRA WITH REGARD TO THE TIME LIMIT FOR COMPLETION OF THE PROCEEDINGS. IT WAS STATED THAT THE APPEAL FILED BY THE ASSESSEE IS STI LL PENDING BEFORE THE HONBLE HIGH COURT OF BOMBAY. 8. THUS, WE NOTICE TH AT THE HONBLE BOMBAY HIGH COURT HAS HELD THAT THE PROCEEDINGS INI TIATED U/S 201(1)/201(1A) SHOULD BE COMPLETED WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH PROCEEDINGS U/S 201(1)/ 201(1A) WERE INITIATED. ADMITTEDLY, IN THE INSTANT CASE, THE ASS ESSING OFFICER HAS PASSED THE ORDERS AFTER EXPIRY OF EIGHT YEARS FROM THE DATE OF ISSUING OF NOTICE. ACCORDINGLY, THE ORDER PASSED BY THE AO IS BARRED BY LIMITATION. ACCORDINGLY WE SET ASIDE THE ORDER PASS ED BY LD CIT(A), SINCE THE ORDER PASSED BY THE AO IS BARRED BY LIMIT ATION. ACCORDINGLY THE SAME STANDS QUASHED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED. 7 2.3. IF THE CONCLUSION ARRIVED AT BY THE TRIBUNAL VIDE AFORESAID ORDER DATED 01/06/2016 AND THE RATIO LAID DOWN BY HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF DIT VS MAHINDRA & MAHINDRA LTD. (SUPRA), ORDER DATED 03/07 /2014 ARE KEPT IN JUXTAPOSITION WITH THE FACTS OF THE PRE SENT APPEALS, WE ARE SUMMARIZING HEREUNDER THE NECESSARY DETAILS OOZING OUT FROM THE APPEALS UNDER CONSIDERA TION:- IT IS NOTED THAT THE ASSESSEE COMPANIES WERE ENGAGE D IN THE BUSINESS OF RECEIVING AND DISTRIBUTING LOCAL AND SA TELLITE CHANNEL PROGRAMS. A SURVEY ACTION WAS CONDUCTED U/ S 133A OF THE ACT AT THE OFFICE PREMISES OF HATHWAY N ASIK CABLE NETWORK PVT. LTD., WHICH IS ALSO A GROUP CONC ERN OF THE ASSESSEE ON 17/09/2003. THE ASSESSEE COMPANY WAS OPERATING FROM THE SAME PREMISES, WHERE THE SURVEY WAS CONDUCTED. THE LD. ASSESSING OFFICER AFTER A PERIO D OF SIX YEARS PASSED AN ORDER U/S 201 AND 201(1A) OF THE AC T HOLDING THAT THE ASSESSEE HAS COMMITTED DEFAULT U/S 201(1) 8 OF THE ACT BY NOT DEDUCTING THE TAX ON THE PAYMENTS AS REQUIRED U/S 194C OF THE ACT. THE ASSESSING OFFICE R DETERMINED THE IMPUGNED SUMS TO BE PAID AS TAX AND ALSO LEVIED INTEREST U/S 201(1A) OF THE ACT. HOWEVER, WI THOUT GOING INTO MUCH DELIBERATION, THE ISSUE TO BE ADJUD ICATED ON LEGAL ISSUE WHETHER THE ORDER PASSED BY THE ASSESSI NG OFFICER IS BARRED BY LIMITATION. SO FAR AS, PASSING OF IMPU GNED ORDERS IS CONCERNED, WE HAVE SUMMARIZED THE SAME IN PRECEDING PARAS OF THE ORDER, WHICH SHOWS THAT THE ORDERS HAVE BEEN PASSED AFTER EXPIRY OF EIGHT YEARS FROM T HE DATE OF ISSUING OF NOTICE. ADMITTEDLY, THE INCOME TAX ACT D OES NOT PRESCRIBED ANY TIME LIMIT FOR IMITATION OF PROCEEDI NGS, U/S 201(1) AND ALSO FOR PASSING ORDER AFTER INITIATION OF PROCEEDINGS. IT IS NOTED THAT THE SPECIAL BENCH IN THE CASE OF MAHINDRA & MAHINDRA TOOK A DECISION ON THE ISSUE OF PERIOD OF LIMITATIONS AND THE DEPARTMENT CHALLENGED THE SA ID DECISION BEFORE THE HON'BLE HIGH COURT, WHEREIN, (D IT VS MAHINDRA & MAHINDRA LTD. (2014) 365 ITR 560) (BOM.) IT WAS HELD AS UNDER:- 6 IT APPEARS THAT AFTER THE APPEALS WERE FILED AN ADDITIONAL GROUND WAS RAISED ON 18.05.2006 WHICH READS AS UNDER: WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 195 OF THE INCOME TAX ACT, 1961 IS VOID ABINITIO BEING BARRED BY LIMITATION? 7 IT APPEARS THAT THE REVENUE MADE AN APPLICATION O N 30.08.2006 BEFORE THE LEARNED PRESIDENT OF INCOME TAX APPELLAT E TRIBUNAL FOR CONSTITUTION OF A SPECIAL BENCH UNDER SECTION 255(3 ) OF THE INCOME TAX ACT, 1961 FOR CONSIDERATION OF THE ISSUE OF LIM ITATION WHICH WAS RAISED BY THE ASSESSEE AS AN ADDITIONAL GROUND. THI S REQUEST OF THE REVENUE WAS ACCEPTED AND THE LEARNED PRESIDENT CONS TITUTED A SPECIAL BENCH FOR DECIDING THE FOLLOWING QUESTION A ND ALSO DISPOSING OF THE APPEAL: 9 WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LAW, AN ORDER UNDER SECTION 195 R/W SECTION 201 OF THE INCOME TAX ACT, 1961 IS BARRED BY LIMITATION WITHIN FOUR YEARS FROM THE END OF THE RELEVANT FINANCIAL YEAR IN THE ABSENCE OF ANY EXPRESS PROVISION IN THE INCOME TAX ACT, 1961? 8 THE INCOME TAX APPELLATE TRIBUNAL FOUND THAT THE ISSUE OF LIMITATION GOES TO THE VERY ROOT OF THE EXERCISE OF JURISDICTI ON IN THIS CASE. IT REJECTED THE OBJECTIONS TO RAISING OF THIS GROUND A ND THEREAFTER, DEALT WITH THE SAME EXTENSIVELY. BY THE ORDER UNDER CHALL ENGE THE TRIBUNAL INTERALIA HELD AS UNDER: (II) SECTION 195(1) CASTS DUTY ON THE PERSON RESPO NSIBLE FOR PAYING OR CREDITING TO THE ACCOUNT OF A NONRESIDENT ANY SU M CHARGEABLE TO TAX UNDER THIS ACT FOR DEDUCTING TAX AT SOURCE. ON FAILURE TO DEDUCT OR PAY TO THE GOVERNMENT AFTER DEDUCTING, THE PERSON R ESPONSIBLE IS TREATED AS ASSESSEE IN DEFAULT U/S 201(1). (III) ANY SUCH PERSON REFERRED TO IN SECTION 201( 1) EXTENDS NOT ONLY THE PERSON DEDUCTING AND FAILING TO DEPOSIT THE TAX BUT ALSO THE PERSON FAILING TO DEDUCT THE TAX AT SOURCE. (IV) WHERE NO TIME LIMIT IS PRESCRIBED FOR TAKING A N ACTION UNDER THE STATUTE, THE ACTION CAN BE TAKEN ONLY WITHIN A REAS ONABLE TIME BY HARMONIOUSLY CONSIDERING THE SCHEME OF THE ACT. (V) TAX RECOVERY PROCEEDINGS ARE INITIATED ONLY AFT ER THE PASSING OF ORDER U/S 201(1) AND THAT TOO IF THE PERSON RESPONS IBLE FAILS TO COMPLY WITH NOTICE OF DEMAND U/S 156. (VI) THE ORDER U/S 201(1) IS AKIN TO THE ASSESSMENT ORDER. ASSESSMENT INCLUDES REASSESSMENT. (VII) THE TIME LIMIT FOR INITIATING THE PROCEEDINGS U/S 201(1) CANNOT BE THE SAME AS THAT FOR THE PASSING OF ORDER UNDER THI S SUBSECTION. TIME FOR INITIATION IS ALWAYS PRIOR TO THE TIME FOR COMP LETING THE PROCEEDINGS. (VIII) THE REASONABLE TIME FOR INITIATING AND COMPL ETING THE PROCEEDINGS U/S 201(1) HAS TO BE AT PAR WITH THE TI ME LIMIT AVAILABLE FOR INITIATING AND COMPLETING THE REASSESSMENT AS T HE ASSESSMENT INCLUDES REASSESSMENT. (IX) THE MAXIMUM TIME LIMIT FOR INITIATING THE PROC EEDINGS U/S 201(1) OR (1A) IS THE SAME AS PRESCRIBED U/S 149 I.E. FOUR YEARS OR SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, AS TH E CASE MAY BE DEPENDING UPON THE AMOUNT OF INCOME IN RESPECT OF W HICH THE PERSON RESPONSIBLE IS SOUGHT TO BE TREATED AS ASSESSEE IN DEFAULT. (X) THE MAXIMUM TIME LIMIT FOR PASSING THE ORDER U/ S 201(1) OR (1A) IS THE SAME AS PRESCRIBED U/S 153(2) BEING ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH PROCEEDINGS U/S 201(1) ARE INITIATED. (XI) ANY ORDER PASSED UNDER SECTION 201(1) OR (1A) CANNOT BE HELD AS BARRED BY LIMITATION IF IT IS NOT PASSED WITHIN FOU R YEARS FROM THE END OF THE RELEVANT FINANCIAL YEAR. 9 IT IS THE CORRECTNESS OF THESE FINDINGS WHICH IS AN ISSUE BEFORE US. 10 10 MR.SURESH KUMAR, LEARNED COUNSEL APPEARING IN SU PPORT OF THIS APPEAL TENDERED THE REFRAMED QUESTIONS OF LAW AND T ERMED THEM AS SUBSTANTIAL. HE SUBMITS THAT IN RELATION TO QUESTIO NS (1) AND (2) THE ASSESSEE HAS CHALLENGED THE ORDER OF THE TRIBUNAL I N INCOME TAX APPEAL NO.1968/2009 FILED BEFORE THIS COURT. THAT A PPEAL HAS BEEN ADMITTED PARTICULARLY BECAUSE IT RAISES THE ISSUE O F APPLICABILITY OF SECTION 201(1) AND SECTION 201(1A) OF THE INCOME TA X ACT, 1961. HE SUBMITS THAT SELFSAME ISSUE AND QUESTION IS RAISED IN THE INSTANT APPEAL. THEREFORE, IT DESERVES TO BE ADMITTED AND T AGGED WITH THE ASSESSEE'S APPEAL, NAMELY, INCOME TAX APPEAL NO.196 8/2009. 11 MR.SURESH KUMAR SUBMITS THAT THE REVENUE HAS BEE N URGING BEFORE THE TRIBUNAL AND EQUALLY BEFORE THIS COURT T HAT THE IMPUGNED ORDER AND CONCLUSION REACHED BY THE TRIBUNAL IS EXF ACIE ERRONEOUS AND VITIATED IN LAW. IT IS SUBMITTED THAT THERE COULD N OT BE ANY TIME LIMIT LEAVE ALONE PERIOD OF LIMITATION FOR THE PURPOSE OF EXERCISE OF POWERS BY THE AUTHORITY. IN SUCH CIRCUMSTANCES THE TRIBUNA L SHOULD NOT HAVE FIXED ANY OUTER LIMIT. MR.SURESH KUMAR SUBMITS THAT THE ASSESSEE IS AGGRIEVED BY THE FINDING RENDERED BY THE TRIBUNAL, NAMELY, OF SIX YEARS LIMITATION FOR INVOKING THE PROVISION. THE AS SESSEE IS CONTENDING THAT IT SHOULD NOT BE SIX YEARS, BUT FOU R YEARS. ON THE OTHER HAND, THE REVENUE CONTENDS THAT THERE CANNOT BE ANY OUTER LIMIT FOR EXERCISE OF POWERS. MR.SURESH KUMAR SUBMI TS THAT THE FINDING RENDERED BY THE TRIBUNAL AMOUNTS TO PROVIDI NG FOR LIMITATION AND IN THE ABSENCE OF ANY LEGAL PROVISION THE TRIBU NAL COULD NOT HAVE FIXED THE TIME LIMIT. CONSEQUENTLY, THE APPEAL DESE RVES TO BE ADMITTED. 12 ON THE OTHER HAND, MR.J.D.MISTRY, LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE, SUBMITS THAT THIS APPEA L HAS NOTHING IN COMMON TO ONE WHICH HAS BEEN FILED BY THE ASSESSEE, NAMELY, INCOME TAX APPEAL NO.1968/2009. HE SUBMITS THAT THE ARGUMENT, THAT THERE SHOULD NOT BE ANY LIMITATION OR RESTRICT ION ON EXERCISE OF POWERS, IS AN EXTREME ONE. THE ASSESSEE'S APPEAL IS IN RELATION TO THE FINDING ON THE POINT OF TIME. THE TRIBUNAL HAS HELD THAT SIX YEARS WOULD BE REASONABLE TIME WITHIN WHICH THE POWER CAN BE EXERCISED WHEREAS THE ASSESSEE SUBMITS THAT IT SHOULD NOT BE SIX YEARS, BUT SHORTER. SUCH AN ISSUE OR QUESTION CANNOT BE EQUATE D WITH THE CONTROVERSY RAISED BY THE REVENUE, NAMELY, THAT THE RE SHOULD BE NO PERIOD OF LIMITATION AT ALL. 13 EVEN OTHERWISE, ACCORDING TO MR.MISTRY, THE TRIB UNAL HAS APPLIED A SETTLED PRINCIPLE OF LAW. THAT HAS BEEN APPLIED IN SERIES OF JUDGMENTS OF THE HONOURABLE SUPREME COURT AND OTHER HIGH COUR TS. THAT PRINCIPLE IS THAT WHEN A STATUTE IS SILENT ON THE P ERIOD OR TIME FOR INVOKING ANY PROVISION OR EXERCISING ANY POWER, THE N, WHAT IS REQUIRED TO BE READ IN IT IS THE PRINCIPLE OR DOCTR INE OF REASONABLE TIME. MR.MISTRY SUBMITS THAT WHAT WOULD BE THE REAS ONABLE TIME DEPENDS ON THE FACTS AND CIRCUMSTANCES IN EACH CASE . ALL THAT THE TRIBUNAL HAS HELD IS THAT THERE IS A REASONABLE TIM E FOR INVOCATION AND EXERCISE OF THE POWERS. THAT FINDING IS IN NO WAY V ITIATED BY ANY ERROR OF LAW APPARENT ON THE FACE OF RECORD OR PERVERSITY . THIS APPEAL, THEREFORE, DESERVES TO BE DISMISSED. 14 AFTER PERUSING THE MEMO OF APPEAL AND ANNEXURES THERETO INCLUDING THE IMPUGNED ORDER WE ARE OF THE VIEW THA T THIS APPEAL CAN 11 BE SAID TO BE RAISING ESSENTIALLY ONLY TWO GROUNDS WHICH READ AS UNDER: (1) WHETHER THE TRIBUNAL WAS JUSTIFIED IN PRESCRIBI NG THE TIME LIMIT FOR INITIATION AND COMPLETION OF PROCEEDINGS UNDER SUB SECTIONS (1) AND (1A) OF SECTION 201 OF THE INCOME TAX ACT, 1961 IN THE ABSENCE OF ANY TIME LIMIT PROVIDED UNDER THE SAID ACT? (2) WHETHER THE TRIBUNAL WAS JUSTIFIED IN PRESCRIBI NG THE TIME LIMIT STATUTORILY PROVIDED FOR INITIATION AND COMPLETION OF REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE INCOME TAX ACT , 1961 FOR THE PURPOSES OF SUBSECTIONS (1) AND (1A) OF SECTION 201 OF THE SAID ACT? 15 UPON PERUSAL OF THE ORDER IMPUGNED IN THIS APPEA L WE ARE INCLINED TO AGREE WITH MR.MISTRY. THE BARE AND ESSENTIAL FAC TS HAVE ALREADY BEEN NOTED BY US ABOVE. THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 201(1) AND 201(1A) DATED 30.03.1999 T REATED THE ASSESSEE IN DEFAULT FOR NON DEDUCTION OF TAX AS PER THE PROVISIONS OF SECTION 195 OF THE INCOME TAX ACT, 1961 FROM THE PA YMENT MADE TO THE LEAD MANAGERS AND ITS ASSOCIATES IN CONNECTION WITH THE SERVICES RENDERED BY THEM FOR EURO ISSUES. THE ASSESSEE FILE D TWO APPEALS AND WHICH WERE PARTLY ALLOWED BY THE COMMISSIONER OF IN COME TAX (APPEALS) ON 01.03.2000. THAT IS HOW THE MATTER WAS CARRIED TO THE INCOME TAX APPELLATE TRIBUNAL. 16 TRUE IT IS THAT THE TRIBUNAL RELIED UPON THE ORD ER PASSED IN THE CASE OF RAYMOND LIMITED V/S DEPUTY COMMISSIONER OF INCOME TAX REPORTED IN (2003) 86 ITD 791 (BOM.) , COPY OF WHICH IS AT ANNEXUREF TO THE MEMO OF APPEAL. FURTHER, THE INCOM E TAX APPEAL NO.246/2004 HAS BEEN ADMITTED BY THIS COURT ON 31.0 1.2005 AGAINST THE ORDER PASSED IN THE CASE OF RAYMOND LIMITED (SU PRA) BY THE INCOME TAX APPELLATE TRIBUNAL DATED 24.04.2002. HOW EVER, WE DO NOT FIND THAT THE EXTREME STAND OF THE REVENUE AND TAKEN BEFORE US HAS ANY CONNECTION WITH THE CONTROVERSY RAISED IN T HE INCOME TAX APPEAL NO.246/2004 IN CASE OF RAYMOND LIMITED OR TH E PENDING APPEAL OF THE ASSESSEE BEFORE US. 17 IN RELATION TO THE ARGUMENT THAT WAS CANVASSED B EFORE US BY MR.SURESH KUMAR WE FIND THAT THE TRIBUNAL MAY HAVE RENDERED SEVERAL FINDINGS, BUT IF THE FINDING ON THE POINT O F LIMITATION CAN BE SUSTAINED AND THE APPEAL COULD BE DISPOSED OF ONLY ON THAT GROUND, THEN, ON MERITS WE WOULD NOT BE REQUIRED TO GO INTO THE CORRECTNESS OF THE FINDINGS RENDERED BY THE TRIBUNAL. IN OTHER WORDS, IF WE ARE SATISFIED WITH THE CONCLUSIONS OF THE TRIBUNAL ON T HE POINT OF LIMITATION, THEN, ALL THE CONTENTIONS OF BOTH SIDES ON MERITS CAN BE KEPT OPEN FOR BEING DECIDED IN AN APPROPRIATE CASE. WE CLARIFY ACCORDINGLY. 18 IN PARAGRAPH 12.1 OF THE ORDER THE TRIBUNAL CONS IDERED THE QUESTION AS TO WHETHER THE ORDER UNDER SECTION 195 R/W SECTION 201 OF THE INCOME TAX ACT, 1961 IS BARRED BY LIMITATION WITHIN FOUR YEARS FROM THE END OF THE RELEVANT FINANCIAL YEAR IN THE ABSENCE OF ANY EXPRESS PROVISION IN THE INCOME TAX ACT, 1961. THE TRIBUNAL HELD THAT THE AUTHORITY MUST HAVE FIRSTLY JURISDICTION AND ON THAT ASSUMPTION AN INQUIRY CAN BE HELD ON THE POINT OF LIMITATION. IN THE PRESENT CASE THE TRIBUNAL FOUND THAT UNLESS AND UNTIL THE AUTHORITY HAD JURISDICTION THE QUESTION OF LIMITATION FOR PASSING AN ORDER DOES NO T ARISE. THAT QUESTION IS SUBSEQUENT TO THE ASPECT OF JURISDICTIO N. IF THE ASSESSING 12 OFFICER HAS JURISDICTION TO PASS AN ORDER UNDER SEC TION 201(1) ONLY, THEN, IT CAN BE DECIDED WHETHER SUCH AN ORDER PASSE D IS WITHIN THE PERIOD OF LIMITATION OR NOT. IF THERE IS NO LAWFUL JURISDICTION FOR PROCEEDING UNDER SECTION 201(1), THERE CANNOT BE AN Y QUESTION OF EXAMINING THE LIMITATION. THE TRIBUNAL PROCEEDED ON THE FOOTING THAT THERE IS CERTAIN LIABILITY TO DEDUCT TAX AT SOURCE ON THE PAYMENTS MADE TO NON RESIDENTS AND THE ASSESSEE HAS FAILED T O DISCHARGE HIS DUTY. THEREAFTER, THE TRIBUNAL EXAMINED AS TO WHETH ER SECTION 201(1) APPLIES TO THE CASE OF NON DEDUCTION OF TAX AT SOUR CE AND CONCLUDED THAT THERE IS NO SUBSTANCE IN THE CONTENTIONS OF TH E ASSESSEE'S REPRESENTATIVE. IT HELD THAT SECTION 201 REFERS TO NOT ONLY THE PERSON DEDUCTING AND FAILING TO DEPOSIT TAX WITH THE GOVER NMENT, BUT ALSO ENCOMPASSES THE PERSON FAILING TO DEDUCT TAX AT SOU RCE. WE DO NOT BOTHER OURSELVES WITH THIS CONCLUSION AND FOR DEALI NG WITH THE ONLY CONTENTION RAISED BEFORE US. 19 FROM PARAGRAPH 14.1 ONWARDS OF THE ORDER UNDER C HALLENGE THE TRIBUNAL DEALT WITH THE ISSUE AS TO WHETHER ANY TIM E LIMIT CAN BE PRESCRIBED FOR PASSING OF THE ORDER UNDER SECTION 2 01(1) OF THE INCOME TAX ACT, 1961. IN RELATION TO THAT THE TRIBU NAL CONSIDERED THE CONTENTIONS OF THE REVENUE THAT THE LEGISLATURE IN ITS WISDOM HAD CHOSEN NOT TO PRESCRIBE ANY TIME LIMIT FOR PASSING AN ORDER UNDER SECTION 201(1) OR 201(1A) OF THE INCOME TAX ACT, 19 61. THE REVENUE CONTENDED THAT THE COURT OR TRIBUNAL SHOULD NOT ATT EMPT TO LAY DOWN ANY PARTICULAR TIME LIMIT AS THAT WOULD AMOUNT TO P LACING UNDUE RESTRICTION ON EXERCISE OF POWER WHICH IS LEGITIMAT ELY CONFERRED AND BY LAW. IN RELATION TO THAT THE TRIBUNAL REFERRED TO T HE JUDGMENTS RELIED UPON BY THE REVENUE. 20 THE TRIBUNAL THEN NOTED THE ARGUMENT OF THE ASSE SSEE THAT WHERE NO TIME LIMIT IS PRESCRIBED FOR EXERCISE OF POWER U NDER A PARTICULAR SECTION OF THE STATUTE, THEN, IT SHOULD BE EXERCISE D WITHIN A REASONABLE TIME. 21 AFTER REFERRING TO THE PROVISIONS EXTENSIVELY FR OM PARAGRAPH 14.2 ONWARDS, THE TRIBUNAL ANALYZED THEM. THE TRIBUNAL T HEN CONSIDERED THE JUDGMENTS RELIED UPON. IT HELD IN PARAGRAPH 14. 4 AS UNDER: 14.4 IF WE LOOK AT THE SCHEME OF SECTION 201(1) IT IS FOUND THAT A DUTY HAS BEEN CAST UPON THE PERSON RESPONSIBLE TO M AKE DEDUCTION OF TAX AT SOURCE FROM ANY PAYMENT MADE ON WHICH TAX IS DEDUCTIBLE. THE FAILURE TO DEDUCT OR PAYMENT AFTER DEDUCTION ENABLE S THE AUTHORITIES TO TREAT HIM AS ASSESSEE IN DEFAULT. THIS DEDUCTION OF TAX AT SOURCE IS ONLY ONE MODE OF RECOVERY. THE DEDUCTEE ALWAYS REMA INS RESPONSIBLE FOR THE PAYMENT OF TAX ON THE AMOUNT WHICH IS PAID TO HIM WITH OR WITHOUT DEDUCTION OF TAX AT SOURCE. HENCE WE DO NOT FIND ANY MATCH BETWEEN THE FACTS OF THE CASE OF HINDUSTAN TIMES LI MITED (SUPRA) AND OTHERS ON SIMILAR LINES, RELIED UPON BY THE LEARNED D.R. VISAVIS THE FACTS UNDER CONSIDERATION. ON THE CONTRARY SO MANY AUTHORITIES HAVE BEEN CITED ON BEHALF OF THE ASSESSEE, SOME OF WHICH HAVE BEEN REFERRED TO ABOVE IN WHICH IT HAS BEEN CATEGORICALL Y HELD THAT THE STATUTORY POWER SHOULD BE EXERCISED WITHIN A REASON ABLE TIME EVEN IF NO TIME LIMIT IS PRESCRIBED. THE SAME OPINION HAS B EEN EXPRESSED BY THE HON'BLE SUPREME COURT IN THE CASE OF MOHAMAD KA VI MAHAMAD AMIN VS. FATMABAI IBRAHIM [(1997) 6 SCC 71]. IN VIE W OF THE FOREGOING DISCUSSION WE ARE OF THE CONSIDERED OPINI ON THAT THERE IS NO 13 MERIT IN THE CONTENTION OF THE LEARNED D.R. THAT IN THE ABSENCE OF TIME LIMIT SPECIFIED U/S 201, ACTION CAN BE TAKEN AT ANY POINT OF TIME. IT IS NATURALLY SO FOR THE REASON THAT TIME IS THE CORE O F EVERY ACTION UNDER LAW. IF THE LEGISLATURE IS SILENT IN PRESCRIBING A PARTICULAR TIME LIMIT THEN THE ACTION CAN BE TAKEN WITHIN A REASONABLE TI ME. THE LD. D.R., DURING THE COURSE OF SUBSEQUENT ARGUMENTS, WAS FAIR ENOUGH TO CONCEDE THAT THE TIME LIMIT MAY BE SPECIFIED, BUT R EQUESTED THAT IT SHOULD NOT BE KEPT RIGID AT FOUR YEARS AS HAS BEEN HELD IN THE CASE OF RAYMOND WOOLEN MILLS LTD. VS. ITO [(1996) 57 ITD 53 6 (BOM.)]. NOW THE NEXT QUESTION IS THAT WHAT CAN BE THE REASONABL E PERIOD FOR ACTION U/S 201(1). THERE CANNOT BE A PARTICULAR TIME LIMIT SAY TWO YEARS OR FIVE YEARS OR TEN YEARS, WHICH CAN BE DESCRIBED AS REASONABLE FOR ALL THE ACTIONS UNDER THE ACT, WHEN NO TIME LIMIT IS PR ESCRIBED. THE REASONABLE TIME FOR TAKING ACTION UNDER A PARTICULA R SECTION LARGELY DEPENDS ON HOST OF FACTORS, INTER ALIA, THE NATURE OF PROCEEDINGS, THE CHARACTER OF THE ORDER ETC.. IN ORDER TO DETERMINE THE REASONABLE TIME FOR TAKING ACTION U/S 201, IT IS IMPORTANT TO HAVE A LOOK AT SUCH NECESSARY FACTORS. 22 THEREAFTER, THE TRIBUNAL DEALT WITH THE NATURE O F THE PROCEEDINGS UNDER SECTION 201(1) AND TYPE OF THE ORDER UNDER SE CTION 201(1). THE TRIBUNAL RELIED ON THE JUDGMENT OF THE HONOURAB LE SUPREME COURT [REPORTED IN (2001) 252 ITR 772 (SC) ITO VS. DELHI DEVELOPMENT AUTHORITY] APPROVING THE VIEW OF THE HO NOURABLE DELHI HIGH COURT THAT THE ORDER UNDER SECTION 201(1) IS A N ORDER OF ASSESSMENT. 23 THE TRIBUNAL THEN DEALT WITH WHAT WOULD BE THE R EASONABLE TIME FOR PASSING AN ORDER UNDER SECTION 201(1). THE DISC USSION IN RELATION THERETO IS TO BE FOUND IN PARAGRAPH 17.1 ONWARDS OF THE ORDER UNDER CHALLENGE. AFTER REFERRING TO THE RIVAL CONTENTIONS THE TRIBUNAL CONCLUDED IN PARAGRAPHS 17.9 AND 17.10 AS UNDER: 17.9 SECTION 201(1) DECLARES THAT WHERE THE PERSON RESPONSIBLE FOR PAYING ANY SUM CHARGEABLE TO TAX UNDER THE PROVISIO NS OF THIS ACT FAILS TO DEDUCT OR AFTER DEDUCTING FAILS TO PAY THE TAX AS PER THE PROVISIONS OF THIS ACT, HE SHALL BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF THE TAX. FURTHER THE EXPLANAT ION TO SECTION 191, WHICH WILL BE DISCUSSED INFRA HAS DIRECT IMPACT ON THE LIABILITY OF THE PERSON LIABLE TO DEDUCT BUT FAILING TO DEDUCT OR FA ILING TO PAY AFTER DEDUCTION OF TAX AT SOURCE. ON GOING THROUGH THE EX PLANATION TO SECTION 191 IN JUXTAPOSITION TO SECTION 201(1) IT I S DIVULGED THAT THE PERSON RESPONSIBLE FOR DEDUCTING OR FAILING TO PAY TAX DEDUCTED AT SOURCE IS TO BE DEEMED TO BE AN ASSESSEE IN DEFAULT ONLY IF THE PAYEE OF INCOME HAS ALSO FAILED TO PAY SUCH TAX DIRECTLY. FROM THE DETAILED DISCUSSION UNDER THE SUCCEEDING MAIN HEAD, WE WILL ALSO NOTICE THAT WHERE THE PAYEE IS NOT LIABLE TO PAY TAX ON THE AMO UNT OF INCOME RECEIVED BY HIM WITHOUT DEDUCTION OF TAX AT SOURCE, THEN ALSO THE PERSON RESPONSIBLE CANNOT BE TREATED AS ASSESSEE IN DEFAULT. TO SUM UP THE LIABILITY OF THE PERSON RESPONSIBLE IS DEPEN DENT UPON THE DEDUCTEE FAILING OR OTHERWISE TO PAY SUCH TAX DIREC TLY. THUS THE ACTION U/S 201(1) IS DEPENDENT ON THE OUTCOME OF THE ASSES SMENT OF THE PAYEE AND THE TIME LIMIT FOR PASSING ORDER U/S 201( 1) HAS TO BE VIEWED IN THE LIGHT OF THE FATE OF THE ASSESSMENT I N THE HANDS OF THE RECIPIENT. LOGICALLY THE PERSON RESPONSIBLE FOR PAY ING SUM CHARGEABLE 14 TO TAX CAN BE TREATED AS ASSESSEE IN DEFAULT AT ANY TIME PRIOR TO THE ASSESSMENT OF THE PAYEE OR THE TIME AVAILABLE FOR T HE MAKING OF THE ASSESSMENT OF THE PAYEE. IF THE PERSONS RESPONSIBLE IS DEEMED TO BE AN ASSESSEE IN DEFAULT AFTER THE ASSESSMENT OF THE PAYEE OR THE TIME AVAILABLE FOR MAKING ASSESSMENT HAS EXPIRED THEN SU CH AMOUNT OF TAX WILL BE INCAPABLE OF ADJUSTMENT AGAINST TAX LIABILI TY OF THE PAYEE AND WOULD REQUIRE RETURN TO SUCH PERSON WHO HAS BEEN TR EATED AS ASSESSEE IN DEFAULT. THUS BOTH THE INITIATION OF PR OCEEDINGS U/S 201(1) AS WELL AS THE COMPLETION OF SUCH PROCEEDINGS BY PA SSING ORDER HAVE TO BE PRIOR TO THE TIME LIMIT WITHIN WHICH THE TAX CAN BE DETERMINED IN THE HANDS OF THE PAYEE. IT CANNOT BE BEYOND SUCH PE RIOD. THERE MAY BE DIFFERENT SITUATIONS IN THE ASSESSMENT OF THE PA YEE. IF THE PAYEE HAS INCLUDED THE AMOUNT RECEIVED FROM PAYER IN HIS TOTAL INCOME BUT THE TAX HAS NOT BEEN PAID IN FULL OR PART THEN THE PAYER CAN BE TREATED AS ASSESSEE IN DEFAULT TO THE EXTENT OF THE NON PAY MENT OF TAX ON THE SUM PAID TO HIM PROVIDED THE TAX IS NOT RECOVERED F ROM THE PAYEE. IF THE PAYEE HAS FURNISHED THE RETURN OF INCOME WITHOU T DISCLOSING THE SUM PAID BY THE PAYER ON WHICH TAX WAS DEDUCTIBLE A S PER THE PROVISIONS OF THE ACT THEN THE TAX DEDUCTIBLE AT SO URCE CAN BE RECOVERED FROM THE PAYER BY TREATING HIM AS ASSESSE E IN DEFAULT IF THE INCOME HAS NOT BEEN ASSESSED IN THE HANDS OF THE PA YEE. STILL IN ANOTHER SITUATION WHERE THE PAYEE HAS NOT AT ALL FI LED HIS RETURN OF INCOME AGAIN THE PERSON RESPONSIBLE CAN BE TREATED AS ASSESSEE IN DEFAULT IN RESPECT OF THE TAX ON THE SUM PAID BY HI M IN VIOLATION OF THE PROVISIONS OF THIS CHAPTER. WITH THIS DISCUSSIO N THERE REMAINS NO DIFFICULTY IN ANSWERING THE QUESTION THAT HOW MUCH TIME IS AVAILABLE WITH THE REVENUE FOR TREATING THE PAYER AS ASSESSEE IN DEFAULT U/S 201(1). THE OBVIOUS ANSWER IS THAT THE MAXIMUM TIME LIMIT AVAILABLE FOR ASSESSMENT OF THE PAYEE IS THE MAXIMUM TIME LIM IT WITHIN WHICH THE PAYER CAN BE TREATED AS ASSESSEE IN DEFAULT. WI TH THE EXPANSION OF THE SCOPE OF SECTION 147, ALSO ROPING IN THE CAS ES OF AASSESSMENT APART FROM REASSESSMENT, IT IS CLEAR THAT THE ASSES SMENT OF PAYEE SHALL ALSO INCLUDE ASSESSMENT MADE UNDER 147. THUS, THE MAXIMUM TIME LIMIT FOR INITIATING AND COMPLETING THE PROCEE DINGS U/S 201(1) HAS TO BE AT PAR WITH THE TIME LIMIT AVAILABLE FOR INITIATING AND COMPLETING THE REASSESSMENT. 17.10 PROVISO TO SECTION 143(3) STATES THAT NO NOTI CE UNDER CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE AFTER EXPIRY OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN IS FURNISHED. THE TIME LIMIT FOR COMPLETION OF ASSESSMENT U/S 143 OR 144 HAS BEEN PR ESCRIBED U/S 153(1) AS TWO YEARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSESSABLE. THE TIME LIMIT FOR NOTICE OF ASSESSMENT OR REASSESSMENT U/S 147 HAS BEEN PRESCRI BED U/S 149. THIS SECTION, IN TURN, PROVIDES THAT NO NOTICE U/S 147 SHALL BE ISSUED FOR THE RELEVANT ASSESSMENT YEAR IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE CASE FALLS UNDER CLAUSE (B). CLAUSE (B) FURTHER STATES THAT NO NOTIC E U/S 147 SHALL BE ISSUED IF FOUR YEARS BUT NOT MORE THAN SIX YEARS HA VE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOU NTS TO OR IS LIKELY TO AMOUNT TO ONE LAKH RUPEE OR MORE FOR THAT YEAR. THE PRESENT TWOFOLD TIME LIMIT FOR ISSUING NOTICE U/S 149 HAS C LEAR CUT DEMARCATION OF ITS APPLICABILITY IN ONE SITUATION OR THE OTHER. WHERE THE INCOME 15 CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT, BY REASON OR UNDERASSESSMENT OR NO ASSESSMENT, AMOUNTS TO OR IS LIKELY TO AMOUNT TO ONE LAKH RUPEES OR MORE FOR THAT YEAR THE N THE EXTENDED PERIOD OF SIX YEARS IS AVAILABLE BUT IF THE AMOUNT OF SUCH INCOME IS LESS THAN RS.1 LAKH THEN THE SHORTER PERIOD OF FOUR YEARS IS PROVIDED FOR. SECTION 153(2) DEALS WITH THE TIME LIMIT FOR T HE COMPLETION OF ASSESSMENT, REASSESSMENT OR RECOMPUTATION U/S 147. IT PROVIDES THAT NO ORDER OF ASSESSMENT, REASSESSMENT OR RECOMPUTAT ION SHALL BE MADE U/S 147 AFTER THE EXPIRY OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH NOTICE U/S 148 WAS SERVED. AS WE HAVE HELD ABOVE THAT THE ORDER U/S 201(1) IS AKIN TO ASSESSME NT AND FURTHER THE ASSESSMENT INCLUDES REASSESSMENT, NATURALLY THE REA SONABLE TIME LIMITS FOR INITIATION AND COMPLETION OF ACTION U/S 201(1) HAVE TO BE SIMILAR TO THOSE AVAILABLE FOR ASSESSMENT U/S 147. ACCORDINGLY, WE HOLD THAT PROCEEDINGS U/S 201(1) CAN BE INITIATED I N THE EXTENDED PERIOD OF SIX YEARS FROM THE END OF THE RELEVANT AS SESSMENT YEAR IF THE INCOME BY VIRTUE OF SUM PAID WITHOUT DEDUCTION OF TAX AT SOURCE BY THE PAYER CHARGEABLE TO TAX IN THE HANDS OF THE PAYEE IS EQUAL TO OR MORE THAN ONE LAKH RUPEE. IF ON THE OTHER HAND S UCH AMOUNT IS LESS THAN RS.1 LAKH THEN THE LOWER PERIOD OF FOUR Y EARS AS PRESCRIBED U/S 149(1) (A) FROM THE END OF THE RELEVANT ASSESSM ENT YEAR IS AVAILABLE FOR INITIATION OF PROCEEDINGS U/S 201(1). GOING BY THE SAME LOGIC AND TAKING ASSISTANCE FROM SECTION 153(2), TH E COMPLETION OF PROCEEDINGS U/S 201(1), THAT IS THE PASSING OF THE ORDER UNDER THIS SUBSECTION, HAS TO BE WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH PROCEEDINGS U/S 201(1) WERE INITIATED . SAME TIME LIMITS FOR INITIATION AND PASSING OF ORDERS WILL BE VALID FOR THE PASSING OF ORDER U/S 201(1A) ALSO. WE HOLD ACCORDINGLY. 24 THEREAFTER, FROM PARAGRAPH 17.11 THE TRIBUNAL DE ALT WITH THE CONTENTIONS OF THE ASSESSEE THAT THE TIME LIMIT FOR INITIATION AND COMPLETION OF THE PROCEEDINGS UNDER SECTION 201(1) OUGHT TO BE THE PERIOD OF FOUR YEARS. THE CASES RELIED UPON HAVE BE EN REFERRED TO AND IN PARAGRAPH 17.14 IT IS HELD THAT THE ORDER PASSED UNDER SECTION 195 R/W 201(1) OR 201(1A) OF THE INCOME TAX ACT, 1961 C ANNOT BE HELD AS BARRED BY LIMITATION IF IT IS NOT PASSED WITHIN FOU R YEARS FROM THE END OF THE RELEVANT FINANCIAL YEAR. WITH THE CORRECTNES S OF THIS FINDING WE ARE NOT CONCERNED IN THIS APPEAL. EQUALLY WE ARE NO T CONCERNED WITH THE FINDINGS ON THE POINT OF JURISDICTION OR LIABIL ITY UNDER SECTION 201 IN THE PRESENT CASE. 25 WE ARE ONLY CONCERNED WITH THE CORRECTNESS OF TH E FINDING OF THE TRIBUNAL, NAMELY, REASONABLE TIME. 26 MR.MISTRY, LEARNED SENIOR COUNSEL HAS PLACED BEF ORE US THE COMPILATION OF JUDGMENTS ESSENTIALLY OF THE HONOURA BLE SUPREME COURT AND WHICH ARE FOLLOWED BY SOME OF THE HIGH CO URTS. IN THE CASE OF STATE OF GUJARAT V/S PATEL RAGHAV NATHA AND OTHE RS REPORTED IN AIR 1969 SC 1297 THE HONOURABLE SUPREME COURT HELD AS UNDER: 11. THE QUESTION ARISES WHETHER THE COMMISSIONER C AN REVISE AN ORDER MADE UNDER SECTION 65 AT ANY TIME. IT IS TRUE THAT THERE IS NO PERIOD OF LIMITATION PRESCRIBED UNDER SECTION 211, BUT IT SEEMS TO US PLAIN THAT THIS POWER MUST BE EXERCISED IN REASONAB LE TIME AND THE LENGTH OF THE REASONABLE TIME MUST BE DETERMINED BY THE FACTS OF THE CASE AND THE NATURE OF THE ORDER WHICH IS BEING REV ISED. 16 27 IN THE CASE OF THE STATE OF PUNJAB AND OTHERS V/ S BHATINDA DISTRICT COOPERATIVE MILK PRODUCERS' UNION LIMITED REPORTED IN (2007) 11 APPLIED IT TO EVEN TAX LAW. THE HONOURABLE SUPREME COURT IN THE CONTEXT OF REVISIONAL POWERS CONFERRED BY THE PUNJA B GENERAL SALES TAX ACT, 1948 ENABLING REOPENING OF THE ASSESSMENT, FOLLOWED THE PRINCIPLE AFOREQUOTED AND HELD AS UNDER: 17. A BARE READING OF SECTION 21 OF THE ACT WOULD REVEAL THAT ALTHOUGH NO PERIOD OF LIMITATION HAS BEEN PRESCRIBE D THEREFOR, THE SAME WOULD NOT MEAN THAT THE SUO MOTU POWER CAN BE EXERCISED AT ANY TIME. 18. IT IS TRITE THAT IF NO PERIOD OF LIMITATION HAS BEEN PRESCRIBED, STATUTORY AUTHORITY MUST EXERCISE ITS JURISDICTION WITHIN A REASONABLE PERIOD. WHAT, HOWEVER, SHALL BE THE REASONABLE PERI OD WOULD DEPEND UPON THE NATURE OF THE STATUTE, RIGHTS AND LIABILIT IES THEREUNDER AND OTHER RELEVANT FACTORS. 28 THEN, AGAIN IN THE CASE OF SANTOSHKUMAR SHIVGOND A PATIL AND OTHERS V/S BALASAHEB TUKARAM SHEVALE AND OTHERS REP ORTED IN (2009) 9 SCC 352 , THE HONOURABLE SUPREME COURT FOLLOWED THE RATIO IN THE JUDGMENTS OF PATEL RAGHAV NATHA (SUPRA ) AND THE STATE OF PUNJAB V/S BHATINDA DISTRICT COOPERATIVE MILK PRODU CERS' UNION (SUPRA) AND REITERATED THE PRINCIPLE AS REFERRED AB OVE. 29 THE SAME VIEW APPEARS TO HAVE BEEN TAKEN EARLIER ALSO IN THE CASE OF THE GOVERNMENT OF INDIA V/S CITADEL FINE PHARMAC EUTICALS AND OTHERS REPORTED IN 1990 (VOL.184) ITR 467 (SC) . 30 OUR ATTENTION HAS ALSO BEEN INVITED TO TWO JUDGM ENTS OF THE HONOURABLE DELHI HIGH COURT WHICH ARE ON THE SAME P RINCIPLE AND AS TO WHETHER IN THE ABSENCE OF ANY TIME LIMIT THE PRO CEEDINGS UNDER SECTIONS 201 AND 201(1A) OF THE INCOME TAX ACT, 196 1 COULD BE INITIATED AT ANY INCOME TAX V/S NHK JAPAN BROADCAST ING CORPORATION REPORTED IN (2008) 305 ITR 137 (DELHI) , THE DELHI HIGH COURT UPHELD THE VIEW OF THE TRIBUNAL AND DISMISSED THE R EVENUE'S APPEAL [COMMISSIONER OF INCOME TAX V/S HUTCHISON ESSAR TEL ECOME LTD. REPORTED IN (2010) 323 ITR 230 (DELHI) ]. 31 IN THE CASE OF NHK JAPAN BROADCASTING CORPORATIO N (SUPRA), THE HONOURABLE MR. JUSTICE MADAN B. LOKUR (AS HIS LORDS HIP THEN WAS) SPEAKING FOR THE BENCH ANSWERED THE QUESTION DIRECT LY POSED BEFORE US IN THE FOLLOWING TERMS: THERE IS NO DISPUTE THAT SECTION 201 OF THE ACT DO ES NOT PRESCRIBE ANY LIMITATION PERIOD FOR THE ASSESSEE BEING DECLAR ED AS AN ASSESSEE IN DEFAULT. LEARNED COUNSEL FOR THE REVENUE RELIED UPON BHARAT STEEL TUBES LTD. V. STATE OF HARYANA (1988) 70 STC 122 (SC) TO CONTE ND THAT NO PERIOD OF LIMITATION CAN BE PRESCRIBED IN A SITUATI ON SUCH AS THE PRESENT FOR INITIATING PROCEEDINGS. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON STATE OF PUNJAB V. BHATINDA DISTRICT COOP. MILK PRODUCERS UNION LTD. [ 2007] 11 SCC 363 : [2007] 9 RC 637 TO CONTEND THAT IF NO PERIOD OF L IMITATION IS PRESCRIBED, A STATUTORY AUTHORITY MUST EXERCISE ITS JURISDICTION WITHIN A REASONABLE PERIOD. WHAT SHOULD BE THE REASONABLE PERIOD DEPENDS UPON THE NATURE OF THE STATUTE, RIGHTS AND LIABILIT IES THEREUNDER AND OTHER RELEVANT FACTORS. 17 RELYING UPON THIS DECISION, IT IS SUBMITTED BY LEAR NED COUNSEL FOR THE ASSESSEE THAT SINCE SECTION 201 OF THE ACT DOES NOT PRESCRIBE ANY PERIOD OF LIMITATION FOR INITIATING OR FOR COMPLETI NG PROCEEDINGS IN DECLARING THE ASSESSEE AS AN ASSESSEE IN DEFAULT, E XERCISE OF JURISDICTION SHOULD COMMENCE INSOFAR AS THE STATUTO RY AUTHORITY IS CONCERNED WITHIN A REASONABLE PERIOD OF TIME. WE ARE UNABLE TO AGREE WITH LEARNED COUNSEL FOR THE REVENUE INASMUCH AS THE DECISION RELIED UPON BY HIM DEALS W ITH REASONABLE TIME FOR COMPLETING THE ASSESSMENT OR FOR COMPLETIN G THE TASK ON HAND. IN BHARAT STEEL TUBES LTD. (1988) 70 STC 122 (SC) T HE QUESTION THAT AROSE BEFORE THE COURT (AND WHICH HAS BEEN STATED O N PAGE 130 OF THE REPORT) IS WHETHER AN ORDER OF ASSESSMENT UNDER SECTION 11(3) OF THE PUNJAB GENERAL SALES TAX ACT, 1948 OR SECTION 2 8(3) OF THE HARYANA GENERAL SALES TAX ACT, 1973 COULD NOW BE CO MPLETED OR IT WOULD BE BARRED BY LIMITATION. IN THAT CASE, THE AS SESSMENT PROCEEDINGS HAD BEEN UNDULY DELAYED AND THE SUPREME COURT CAME TO THE CONCLUSION THAT FOR COMPLETING THE ASSESSMEN T PROCEEDINGS THERE IS NO PERIOD OF LIMITATION PRESCRIBED AND THA T WOULD DEPEND UPON THE FACTS OF EACH CASE. CONSIDERING THE FACTS OF THE CASE, THE SUPREME COURT GAVE A DIRECTION TO THE ASSESSING AUT HORITY TO COMPLETE ALL THE PENDING ASSESSMENTS WITHIN A PERIO D OF FOUR MONTHS FROM THE DATE OF DELIVERY OF THE JUDGMENT. INSOFAR AS BHATINDA DISTRICT COOP. MILK PRODUCERS U NION LTD. [2007] 9 RC 637 : 11 SCC 363 IS CONCERNED, THE QUESTION THAT AROSE BEFORE THE SUPREME COURT WAS REGARDING INITIATION OF PROCEEDIN GS BY EXERCISE OF JURISDICTION BY THE STATUTORY AUTHORITY. THE SUPREM E COURT HELD THAT EXERCISE OF JURISDICTION MUST BE WITHIN A REASONABL E PERIOD OF TIME AND CONSIDERING THE PROVISIONS OF THE PUNJAB GENERA L SALESTAX ACT, 1948, IT WAS HELD THAT A REASONABLE PERIOD OF TIME FOR INITIATING PROCEEDINGS WOULD BE FIVE YEARS. THERE IS A QUALITATIVE DIFFERENCE BETWEEN BHARAT ST EEL TUBES LTD. [1988] 70 STC 122 (SC) AND BHATINDA DISTRICT COOP. MILK PRODUCERS UNION LTD. (2007) 9 RC 637 : 11 SCC 363. IN THE FOR MER CASE, THE QUESTION PERTAINED TO COMPLETION OF PROCEEDINGS, WH ILE IN THE LATTER CASE IS PERTAINED TO INITIATION OF PROCEEDINGS. WE ARE CONCERNED WITH INITIATION OF PROCEEDINGS. INSOFAR AS THE INCOMETAX ACT IS CONCERNED, OUR ATTE NTION HAS BEEN DRAWN TO SECTION 153(1)(A) THEREOF WHICH PRESCRIBES THE TIMELIMIT FOR COMPLETING THE ASSESSMENT, WHICH IS TWO YEARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSES SABLE. IT IS WELL KNOWN THAT THE ASSESSMENT YEAR FOLLOWS THE PREVIOUS YEAR AND, THEREFORE, THE TIMELIMIT WOULD BE THREE YEARS FROM THE END OF THE FINANCIAL YEAR. THIS SEEMS TO BE A REASONABLE PERIOD AS ACCEPTED UN DER SECTION 153 OF THE ACT, THOUGH FOR COMPLETION OF ASSESSMENT PRO CEEDINGS. THE PROVISIONS OF REASSESSMENT ARE UNDER SECTIONS 147 A ND 148 OF THE ACT AND THEY ARE ON A COMPLETELY DIFFERENT FOOTING AND, THEREFORE, DO NOT MERIT CONSIDERATION FOR THE PURPOSES OF THIS CASE. EVEN THOUGH THE PERIOD OF THREE YEARS WOULD BE A RE ASONABLE PERIOD AS PRESCRIBED BY SECTION 153 OF THE ACT FOR COMPLET ION OF PROCEEDINGS, WE HAVE BEEN TOLD THAT THE INCOME TAX APPELLATE 18 TRIBUNAL HAS, IN A SERIES OF DECISIONS, SOME OF WHI CH HAVE BEEN MENTIONED IN THE ORDER WHICH IS UNDER CHALLENGE BEF ORE US, TAKEN THE VIEW THAT FOUR YEARS WOULD BE A REASONABLE PERIOD O F TIME FOR INITIATING ACTION, IN A CASE WHERE NO LIMITATION IS PRESCRIBED. THE RATIONALE FOR THIS SEEMS TO BE QUITE CLEARIF TH ERE IS A TIMELIMIT FOR COMPLETING THE ASSESSMENT, THEN THE TIMELIMIT FOR I NITIATING THE PROCEEDINGS MUST BE THE SAME, IF NOT LESS. NEVERTHE LESS, THE TRIBUNAL HAS GIVEN A GREATER PERIOD FOR COMMENCEMENT OR INIT IATION OF PROCEEDINGS. 32 MR.SURESH KUMAR SUBMITTED BEFORE US THAT THE DEL HI HIGH COURT JUDGMENT DOES NOT TAKE NOTE OF THE PRINCIPLE THAT W HEN THERE IS NO LIMITATION PRESCRIBED BY THE STATUTE, THE COURT CAN NOT READ INTO THE PROVISION ANY TIME LIMIT OR RESTRICTION. IN THAT RE GARD HE RELIED UPON THE JUDGMENT OF THE HONOURABLE SUPREME COURT IN THE CASE OF AJAIB SINGH V/S SIRHIND COOPERATIVE MARKETING CUM PROCESS ING SERVICE SOCIETY LIMITED AND ANOTHER REPORTED IN (1999) 6 SCC 82 . THE ISSUE BEFORE THE HONOURABLE SUPREME COURT IN THAT CASE WA S WHETHER THERE IS ANY PERIOD OF LIMITATION PRESCRIBED FOR INITIATI ON OF PROCEEDINGS UNDER SECTION 33C(2) OF THE INDUSTRIAL DISPUTES ACT , 1947. IN THAT REGARD THE HONOURABLE SUPREME COURT NOTED THE FACTU AL POSITION, NAMELY, THAT SERVICES OF WORKMAN WERE TERMINATED ON 16.07.1974. HE HAD ISSUED THE NOTICE OF DEMAND ONLY ON 18.12.19 81. HOWEVER, IT WAS NOT DISPUTED THAT NO PLEA REGARDING DELAY WAS R AISED BY THE MANAGEMENT BEFORE THE LABOUR COURT. IT WAS ALSO ACK NOWLEDGED THAT ARTICLE 137 OF THE LIMITATION ACT, 1963 HAS NOT BEE N SPECIFICALLY MADE APPLICABLE TO THE PROCEEDINGS UNDER THE INDUSTRIAL DISPUTES ACT, 1947 SEEKING REFERENCE OF INDUSTRIAL DISPUTES TO THE LAB OUR COURT. THEREFORE, NEITHER THIS PROVISION NOR ANY PRINCIPLE INCORPORATED THEREIN IS APPLICABLE TO THE PROCEEDINGS UNDER THE INDUSTRIAL DISPUTES ACT, 1947 AND THAT IS HOW THE HONOURABLE SUPREME CO URT PROCEEDED TO ANALYZE THE AMBIT AND SCOPE OF THE PROCEEDINGS U NDER THE SPECIAL PROVISION, NAMELY, A REFERENCE BY THE CONCERNED WOR KMAN UNDER THE INDUSTRIAL DISPUTES ACT, 1947. THE JUDGMENT OF THE HONOURABLE SUPREME COURT DEALS WITH A CASE WHERE ANY PROVISION IN THE NATURE OF LIMITATION OR OUTER LIMIT IS PRESCRIBED FOR REFEREN CE UNDER THE INDUSTRIAL DISPUTES ACT, 1947. THE HONOURABLE SUPRE ME COURT WAS NOT DEALING WITH A CASE OF EXERCISE OF POWERS ENABL ING REOPENING OF ASSESSMENT UNDER THE INCOME TAX ACT, 1961 OR ANY TA XING STATUTE. IN FACT, IT WAS NOT DECIDING A CASE CONCERNED WITH INVOKING OF ANY SUOMOTU POWERS OR REOPENING OF ASSESSMENT FINALIZED UNDER THE TAX LAW. THEREFORE, THIS JUDGMENT IS CLEARLY DISTINGUIS HABLE ON FACTS. 33 IF ONE CAREFULLY PERUSES SECTION 201(1) AND 201( 1A) OF THE INCOME TAX ACT, 1961, THEN, THE PRINCIPLE LAID DOWN IN THE DELHI HIGH COURT DECISIONS IN NHK JAPAN BROADCASTING CORPORATION AND HUTCHISON ESSAR TELECOM (SUPRA) WOULD SQUARELY APPLY. 34 THE SECTION 201 OF THE INCOME TAX ACT, 1961 READ S AS UNDER: 201. CONSEQUENCES OF FAILURE TO DEDUCT OR PAY: (1) WHERE ANY PERSON, INCLUDING THE PRINCIPAL OFFIC ER OF A COMPANY, (A) WHO IS REQUIRED TO DEDUCT ANY SUM IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT; OR 19 (B) REFERRED TO IN SUBSECTION (1A) OF SECTION 192, BEING AN EMPLOYER, DOES NOT DEDUCT, OR DOES NOT PAY, OR AFTER SO DEDUC TING FAILS TO PAY, THE WHOLE OR ANY PART OF THE TAX, AS REQUIRED BY OR UNDER THIS ACT, THEN, SUCH PERSON, SHALL, WITHOUT PREJUDICE TO ANY OTHER CONSEQUENCES WHICH HE MAY INCUR, BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX: [PROVIDED THAT ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF A COMPANY, WHO FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER ON T HE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT O F SUCH TAX IF SUCH RESIDENT (I) HAS FURNISHED HIS RETURN OF INCOME UNDER SECTIO N 139; (II) HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME IN SUCH RETURN OF INCOME; AND (III) HAS PAID THE TAX DUE ON THE INCOME DECLARED B Y HIM IN SUCH RETURN OF INCOME, AND THE PERSON FURNISHES A CERTIF ICATE TO THIS EFFECT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBE D:] [PROVIDED FURTHER THAT] NO PENALTY SHALL BE CHARGED UNDER SECTION 221 FROM SUCH PERSON, UNLESS THE ASSESSING OFFICER IS S ATISFIED THAT SUCH PERSON, WITHOUT GOOD AND SUFFICIENT REASONS, HAS FA ILED TO DEDUCT AND PAY SUCH TAX.] [(1A) WITHOUT PREJUDICE TO THE PROVISIONS OF SUBSEC TION (1), IF ANY SUCH PERSON, PRINCIPAL OFFICER OR COMPANY AS IS REF ERRED TO IN THAT SUB- SECTION DOES NOT DEDUCT THE WHOLE OR ANY PART OF TH E TAX OR AFTER DEDUCTING FAILS TO PAY THE TAX AS REQUIRED BY OR UN DER THIS ACT, HE OR IT SHALL BE LIABLE TO PAY SIMPLE INTEREST, (I) AT ONE PER CENT. FOR EVERY MONTH OR PART OF A M ONTH ON THE AMOUNT OF SUCH TAX FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTIBLE TO THE DATE ON WHICH SUCH TAX IS DEDUCTED; AND (II) AT ONE AND ONEHALF PER CENT. FOR EVERY MONTH O R PART OF A MONTH ON THE AMOUNT OF SUCH TAX FROM THE DATE ON WHICH SU CH TAX WAS DEDUCTED TO THE DATE ON WHICH SUCH TAX IS ACTUALLY PAID, AND SUCH INTEREST SHALL BE PAID BEFORE FURNISHING T HE STATEMENT IN ACCORDANCE WITH THE PROVISIONS OF SUB SECTION (3) O F SECTION 200:] [PROVIDED THAT IN CASE ANY PERSON, INCLUDING THE PR INCIPAL OFFICER OF A COMPANY FAILS TO DEDUCT THE WHOLE OR ANY PART OF TH E TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER ON T HE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SUB- SECTION (1), THE INTEREST UNDER CLAUSE (I) SHALL BE PAYABLE FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTIBLE TO THE DATE O F FURNISHING OF RETURN OF INCOME BY SUCH RESIDENT.] (2) WHERE THE TAX HAS NOT BEEN PAID AS AFORESAID AF TER IT IS DEDUCTED, THE AMOUNT OF THE TAX TOGETHER WITH THE AMOUNT OF S IMPLE INTEREST THEREON REFERRED TO IN SUB SECTION (1A) SHALL BE A CHARGE UPON ALL THE ASSETS OF THE PERSON, OR THE COMPANY, AS THE CASE M AY BE, REFERRED TO IN SUBSECTION (1). 20 [(3) NO ORDER SHALL BE MADE UNDER SUBSECTION (1) DE EMING A PERSON TO BE AN ASSESSEE IN DEFAULT FOR FAILURE TO DEDUCT THE WHOLE OR ANY PART OF THE TAX FROM A PERSON RESIDENT IN INDIA, AT ANY TIME AFTER THE EXPIRY OF (I) TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE STATEMENT IS FILED IN A CASE WHERE THE STATEMENT RE FERRED TO IN SECTION 200 HAS BEEN FILED; (II) [SIX YEARS] FROM THE END OF THE FINANCIAL YEAR IN WHICH PAYMENT IS MADE OR CREDIT IS GIVEN, IN ANY OTHER CASE: PROVIDED THAT SUCH ORDER FOR A FINANCIAL YEAR COMME NCING ON OR BEFORE THE 1ST DAY OF APRIL, 2007 MAY BE PASSED AT ANY TIM E ON OR BEFORE THE 31ST DAY OF MARCH, 2011. (4) THE PROVISIONS OF SUBCLAUSE (II) OF SUBSECTION (3) OF SECTION 153 AND OF EXPLANATION 1 TO SECTION 153 SHALL, SO FAR A S MAY, APPLY TO THE TIME LIMIT PRESCRIBED IN SUBSECTION (3).] [EXPLANATION.FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'ACCOUNTANT' SHALL HAVE THE MEANING ASSIGNED TO IT IN THE EXPLANATION TO SUBSECTION (2) OF SECTION 288.] 35 ONCE SAME PROVISIONS ARE INVOKED IN THE PRESENT CASE, THEN, THE HONOURABLE DELHI HIGH COURT, WITH RESPECT, RIGHTLY CONCLUDED THAT THOUGH SECTION 201 DOES NOT PRESCRIBE ANY LIMITATIO N PERIOD FOR THE ASSESSEE BEING DECLARED AS AN ASSESSEE IN DEFAULT Y ET THE REVENUE WILL HAVE TO EXERCISE THE POWERS IN THAT REGARD WIT HIN A REASONABLE TIME. IN SUCH CIRCUMSTANCES WE ARE OF THE VIEW THAT THE TRIBUNAL'S ORDER IN THIS CASE DOES NOT SUFFER FROM ANY ERROR O F LAW APPARENT ON THE FACE OF RECORD OR PERVERSITY WARRANTING OUR INT ERFERENCE IN APPELLATE JURISDICTION. 36 WE ARE ALSO SHOWN THE JUDGMENT OF THE CALCUTTA H IGH COURT IN THE CASE OF BHURA EXPORTS LTD. V/S INCOME TAX OFFICER ( TDS), WARD 57(2) IN G.A. NO.1319 AND ITAT NO.118 AND IT APPEAL NO.11 6/2011 AND IT 1163/2011 DECIDED ON 30.08.2011. WITH RESPECT AND F OR THE REASONS INDICATED BY US ABOVE WE CANNOT AGREE WITH THE VIEW TAKEN BY THE DIVISION BENCH OF THE CALCUTTA HIGH COURT. THAT DEC ISION OVERLOOKS THE FUNDAMENTAL PRINCIPLES NOTED ABOVE. THEY NEED NOT B E REITERATED HERE. 37 HOWEVER, WE CLARIFY THAT OUR ORDER SHALL NOT HAV E ANY IMPACT ON THE APPEAL WHICH HAS BEEN FILED BY THE ASSESSEE IN THIS COURT AND WHICH IS STATED TO BE PENDING. OUR JUDGMENT AND ORD ER SHALL NOT BE CONSTRUED AS EXPRESSION OF ANY OPINION AS TO WHAT S HOULD BE THE REASONABLE TIME. IN OTHER WORDS, WHETHER IT SHOULD BE AS INDICATED IN THE DELHI HIGH COURT JUDGMENTS OR OTHERWISE IS AN A SPECT WHICH IS KEPT OPEN. EQUALLY, ONCE WE UPHOLD THE VIEW OF THE TRIBUNAL ON THE POINT OF LIMITATION, THEN, WE MUST ALSO CLARIFY THA T WE HAVE EXPRESSED NO OPINION ON MERITS OF THE IMPUGNED DEDUCTIONS/ CL AIMS IN THAT REGARD. THEREFORE, WE DO NOT EXPRESS ANY OPINION ON THE RIVAL CONTENTIONS PARTICULARLY AS TO WHETHER THERE IS ANY LIABILITY IN TERMS OF SECTION 201 OF THE INCOME TAX ACT, 1961 IN THE PRES ENT CASE. 38 AS A RESULT OF THE ABOVE DISCUSSION WE ARE OF TH E VIEW THAT THE PRESENT APPEAL DOES NOT RAISE ANY SUBSTANTIAL QUEST ION OF LAW. IT IS, ACCORDINGLY, DISMISSED. THERE WILL BE NO ORDER AS T O COSTS. 21 2.4. WE NOTE THAT WHILE COMING TO A PARTICULAR CONCLUSION, AFTER CONSIDERING VARIOUS JUDICIAL PRONOUNCEMENT CONCLUDED AS UNDER:- EVEN THOUGH SECTION 201 DOES NOT PRESCRIBE ANY LIMI TATION PERIOD FOR ASSESSEE BEING DECLARED AS AN ASSESSEE IN D EFAULT, YET REVENUE IS REQUIRED TO EXERCISE THE POWERS IN THA T REGARD WITHIN A REASONABLE TIME, AND THUS TRIBUNAL WAS JUSTI FIED IN PRESCRIBING TIME LIMIT STATUTORILY PROVIDED FOR INITI ATION AND COMPLETION OF REASSESSMENT PROCEEDINGS UNDER SECTION 147 FOR PURPOSES OF SUBSECTIONS (1) AND (1A) OF SECTION 201. THIS IS EXACTLY THE ISSUE BEFORE US. THE HON'BLE CO URT ALSO CONSIDERED THAT NO TIME LIMIT HAS BEEN SPECIFIED IN THE ACT BUT STILL THE ORDER MUST BE PASSED WITHIN A REASONA BLE TIME AND THUS PASSING OF ORDER HAS TO BE WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH PROCEEDINGS U/S 201(1) WERE INITIATED. IT WAS FURTHER HELD THAT SAME TIME LIMIT WILL BE APPLICABLE FOR PASSING OF ORDER U/S 201(1A) OF T HE ACT. THE HON'BLE HIGH COURT AFFIRMED THE DECISION OF THE SPE CIAL BENCH OF THE TRIBUNAL IN MAHINDRA & MAHINDRA LTD. V S DCIT (2009) 313 ITR (AT) 263 (MUM.)(SB). THE HON'BLE HI GH COURT HAS MADE AN ELABORATE DISCUSSION ON THE ISSUE AND AFTER CONSIDERING VARIOUS DECISIONS INCLUDING FROM VARIOUS HIGH COURTS AND HON'BLE APEX COURTS, REACHED TO A PARTICULAR CONCLUSION. IN VIEW OF THE FOREGOING DIS CUSSION AND THE DECISION FROM HON'BLE HIGH COURT, WE ARE OF THE VIEW THAT STATUTORY POWERS SHOULD BE EXERCISED WITHIN A REASONABLE TIME EVEN IF NO TIME LIMIT IS PRESCRIBED . FINALITY OF THE ISSUE IS THE UNDERLYING PRINCIPLE EMBEDDED A ND IS THE 22 CORE OF EVERY ACTION UNDER THE LAW. IF THE LEGISLAT URE IS SILENT IN PRESCRIBING A PARTICULAR TIME LIMIT, THEN THE AC TION CAN ONLY BE TAKEN WITHIN A REASONABLE TIME. THE SPECIA L BENCH OF THE TRIBUNAL RELIED UPON THE DECISION FROM HON'B LE APEX COURT IN INCOME TAX OFFICER VS DELHI DEVELOPMENT AU THORITY REPORTED IN (2001) 252 ITR 772 (SC) APPROVING THE V IEW OF HON'BLE DELHI HIGH COURT THAT THE ORDER U/S 201(1) IS AN ORDER OF ASSESSMENT. THE RATIO LAID DOWN IN GOI VS CITADEL FINE PHARMACEUTICALS (1990) 184 ITR 467 (SC), DELHI HIGH COURT IN CIT VS NHK JAPAN BROADCASTING CORPORATION (2008) 305 ITR 137 (DEL.) SUPPORTS OUR VIEW. FURTHER, THE HON'BLE APEX COURT IN BHATINDA DISTRICT COOPERATIVE MILK PR ODUCERS UNION LTD. (2007) 11 SCC 363 ON A QUESTION, WHICH A ROSE FROM THE HON'BLE APEX COURT REGARDING INITIATION OF PROCEEDINGS BY EXERCISE OF JURISDICTION BY THE STAT UTORY AUTHORITY HELD THAT IT MUST BE WITHIN A REASONABLE PERIOD OF TIME. 2.5. SO FAR AS, THE DECISION OF HINDUSTAN TIMES L TD., AIR 1998 SC 688, RELIED UPON BY THE LD. DR, IS CONC ERNED, WE FIND THAT THE HON'BLE HIGH COURT HAS ALREADY COM MENTED UPON THE DECISION AND THE SPECIAL BENCH OF THE TRIB UNAL IN THE CASE OF MAHINDRA & MAHINDRA IN PARA 14.4 HAS AL READY DISCUSSED THIS CASE INCLUDING THE CASE OF MOHAMAD K AVI MOHAMAD AMIN VS FATMABAI IBRAHIM (1997) 6 SCC 71, THEREFORE, THE OBJECTION OF THE LD. DR HAD ALREADY BEEN MET WITH BY THE SPECIAL BENCH AS WELL AS BY THE HON'BLE JURISDICTIONAL HIGH COURT. TO SUM UP THE MATTER, WE FIND 23 THAT THE HON'BLE BOMBAY HIGH COURT HAS HELD THAT PROCEEDINGS INITIATED U/S 201(1)/201(1A) SHOULD BE COMPLETED WITHIN ONE YEAR FROM THE END OF THE FINAN CIAL YEAR IN WHICH PROCEEDINGS U/S 201(1)/201(1A) WERE INITIA TED. ADMITTEDLY, IN THE APPEALS BEFORE US, THE ASSESSING OFFICER PASSED THE ORDERS AFTER EXPIRY OF EIGHT YEARS FROM THE DATE OF ISSUANCE OF NOTICE, THEREFORE, THE ORDER PASSED BY THE ARE BARRED BY LIMITATION. CONSEQUENTLY, WE SET ASIDE TH E ORDERS PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA L) AS THE ORDERS PASSED BY THE ASSESSING OFFICER ARE BARR ED BY LIMITATION. ALL THESE APPEALS OF THE ASSESSEE, ARE, THEREFORE, ALLOWED. FINALLY, ALL THE APPEALS OF THE ASSESSEES ARE ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 07/09/2016. SD/- SD/- ( ASHWANI TANEJA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ) DATED : 07/09/2016 F{X~{T? P.S / # %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 $ 1' ( *+ ) / THE CIT (TDS), MUMBAI. 24 4. 0 0 $ 1' / CIT(A)-, MUMBAI 5. 3#4 .' , 0 *+' * 5 , $ % / DR, ITAT, MUMBAI 6. 6 7% / GUARD FILE. / BY ORDER, /3+' .' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI