TMI Blog2020 (8) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable period for initiation of proceedings in respect of the Assessment years in question, at the time where no limitation was prescribed has been held to be four years. It is not in dispute that in the instant case, the proceedings under Section 201(1) and 201(1A) of the Act have been initiated after a period of four years. Therefore, the same cannot be held to be initiated within the reasonable time and consequently, the proceedings cannot be sustained in the eye of law. - Decided in favour of the assessee - I.T.A. NO.166 OF 2011 C/W I.T.A. NO.148 OF 2011 - - - Dated:- 24-8-2020 - HON BLE MR. JUSTICE ALOK ARADHE AND HON BLE MR. JUSTICE H.T. NARENDRA PRASAD APPELLANT (BY SRI. A. SHANKAR, SR. COUNSEL, A/W SRI. B.S. BALACHANDRAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Whether the Tribunal was correct in proceeding to lay down the period of limitation for initiation of proceedings under Section 201(1) of the Act when the legislation has specifically omitted such period prescribed under the earlier Section 231 of the Act and Section 201(3) of the Act proviso clearly provide that in respect of any financial year commencing on or before 1.04.2007 can be passed on or before 31.03.2011? 3. I.T.A.No.148/2011 was admitted by a bench of this court vide order dated 29.08.2011 on the following substantial question of law: (i) What is the reasonable time within which the proceedings have to be initiated under Section 201(1) of the Income Tax Act, as during the relevant period, the statute did not pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t years 2002-03) and at the rate of 40% for the subsequent years on the ground that the consultant had a permanent establishment in India and therefore, the payment would be subject to tax at the maximum rate of 40% applicable to any foreign company and the assessee action in remitting tax at the rate of 40% had resulted in short remittance. The assessee was held as an assessee in default in terms of Section 201(1) of the Act and a demand was also made for interest as per Section 201(1A) of the Act. Accordingly, a sum of ₹ 3,81,21,797/- was demanded towards short deduction and a demand for a sum of ₹ 2,92,92,842/- was made on account of interest for all the years. Being aggrieved, the assessee filed an appeal. 6. The Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 363 as well as decision of this court in CIT VS. BHARAT HOTELS LTD., , 384 ITR 77 (KARNATAKA) , decisions of Delhi High Court in CIT V. NHK JAPAN BROADCASTING CORPORATION , 305 ITR 137 (DELHI), BHARTI AIRTEL LTD VS. UOI , 245 TAXMAN 80 (DELHI), CIT VS. CJ INTERNATIONAL HOTELS (P) LTD , 372 ITR 684 (DELHI), decision of Andhra Pradesh High Court in CIT V. UB ELECTRONIC INSTRUMENTS LTD , 371 ITR 314 (ANDHRA PRADESH ), decision of Bombay High Court in DIT VS. MAHINDRA AND MAHINDRA , 365 ITR 560 (BOMBAY) and decision of High Court of Himachal Pradesh in CIT V SATLUJ JAL VIDYUT NIGAM LTD , 345 ITR 552 (HIMACHAL PRADESH). 8. We have considered the submissions made by learned counsel on both the sides and have perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h have been mentioned in the order which 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 limitation is prescribed. The aforesaid decision was followed by a division bench of this court in BHARAT HOTELS LTD supra. 9. In view of aforesaid enunciation of law, it is axiomatic that reasonable period for initiation of proceedings in respect of the Assessment years in question, at the time where no limitation was prescribed has been held to be four years. It is not in dispute that in the instant case, the proceedings under Section 201(1) and 201(1A) of the Act have been initiated after a period of four years. Therefore, the same cannot be held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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