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2016 (12) TMI 1601 - HC - Income TaxLimitation in respect of deduction from non-residents - administrative convenience - TDS u/s 195 - reopening of assessment - Assessee in default - Petitioner, a telecommunications service provider, engaged the services of both domestic (resident) and foreign (non-resident) entities for providing interconnections to its users - Held that:- The court was conscious of the absence of any limitation period in respect of payments to non-residents, for the purpose of Section 195 read with Section 201. Yet, it was held that proceedings could be initiated within reasonable time. The circular relied on by the revenue, furnishing a rationale for not providing limitation: "as it may not be administratively possible to recover the tax from the non-resident”, was decisively rejected in G.E. Technologies (2010 (9) TMI 7 - SUPREME COURT OF INDIA) Since Vodafone Essar (2016 (8) TMI 509 - DELHI HIGH COURT) considered the entire issue and noted that even recently a reasonable period was read into the Act, in relation to exercise of powers (although in a different context) accepting the petitioner’s contention in the present case is based on precedent. Furthermore, the only reason cited by the respondent, i.e. administrative convenience, cannot outweigh the harsh nature of the consequence, which would expose resident payers to the onerous responsibility of maintaining books and documents for an uncertain period of time. Given these considerations, the impugned notices are quashed. The writ petition is allowed in these terms
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