TMI Blog2009 (12) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the statutory power must be exercised within a reasonable period - reasonable period taking into consideration the various provisions of the Income-tax Act has been held to be four years in a number of cases - no reason to extend this period any further – In favor of assessee - ITA No. 12 of 2006 - - - Dated:- 9-12-2009 - DEEPAK GUPTA, AHUJA V. K., JJ. JUDGMENT Deepak Gupta J.- Both these appeals are being disposed of by this common judgment since the following identical question of law is involved in both the appeals : "(i) Whether, on the facts and in the circumstances of the case, the hon'ble ITAT was right in law in holding that the order under section 201 and 201(1A) passed by the Assessing Officer beyond four ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. It is contended on behalf of the Revenue that no limitation is prescribed under the Income-tax Act for taking action under section 201 and 201(1A) and, hence, the order of the Tribunal holding that notices were time barred is illegal and liable to be set aside. 4. Mrs.Vandana Kuthiala, advocate appearing on behalf of the Revenue, has placed reliance on the judgment of a Division Bench of the Kerala High Court in Secretary, Sultan Battery Co-operative Housing Society Ltd. v. CIT [2003] 261 ITR 364 (Ker). In that case, the assessee had made payments to a contractor during the period April 1, 1986, to March 31, 1990, without deducting income-tax at source in terms of section 194C of the Act. The assessee deposited the tax in 1990 after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation has been prescribed 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 period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors. 19. Revisional jurisdiction, in our opinion, should ordinarily be exercised within a period of three years having regard to the purport in terms of the said Act. In any event, the same should not exceed the period of five years. The view of the High Court, thus, cannot be said to be unreasonable. Reasonable period, keepi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Delhi High Court was whether any period of limitation is applicable to proceedings under section 201 and 201(1A) of the Act ? The Delhi High Court noted that under section 191 of the Act, the primary liability to pay tax is on the person whose income it is that is the deductee. A duty is cast upon the person who makes the payment to deduct tax at source but it does not wash away the liability of the person whose liability it is to pay the same. It is still the liability of the earner of the income or the deductee to pay the tax. The liability of the deductor in that sense is vicarious. The Delhi High Court, after referring to a number of judgments including the judgment State of Punjab v. Bhatinda District Co-operative Milk Producers U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime limit for completing the assessment, then the time limit for initiating the proceedings must be the same, if not less. Nevertheless, the Tribunal has given a greater period for commencement or initiation of proceedings. 9. 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 decision of the Supreme Court in State of Punjab v. Bhatinda District Co-operative Milk Producers Union Ltd. [2007] 9 RC 637 ; [2007] 11 SCC 363 action must be initiated by the competent authority under the Income-tax Act, where no limitation is prescribed as in section 201 of the Act within that period of four years." We are in respectful agreement with the judgment of the Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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