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2019 (9) TMI 851 - AT - Income TaxAssessee in default u/s. 206C(6A) - non-collection of tax at source on sale of heavy scrap - Period of limitation - as alleged default u/s 206C after the end of four years from the financial year in which the default was allegedly committed - as contented by assessee ‘scrap’ imported from other countries have been sold in the domestic market without involving any manufacture or mechanical working of materials carried out by the assessee and thus do not fall within the sweep of Explanation (b) to Section 206C - HELD THAT:- No such limitation provision has been enacted with regard to tax collection at source as provided in Section 206C till date. Under the circumstances, where no time limit has been prescribed by the statute for passing order in respect of default in collection of tax at source, a guidance can be possibly obtained from judicial precedents laying down a reasonable time limit as implicit for imposition of levy of tax at source. We notice that the judicial precedents cited on behalf of the assessee have read a period of four years to be reasonable time limit. The liability of the Collector of tax on behalf of the Government (assessee herein) is a vicarious liability and cannot be allowed to remain hanging on his head for all times to come where the department decides not to take action either by proceedings u/s 206C or by making assessment on the deductee. The show cause notice in the instant case has been issued after five years from the end of the relevant F.Y. 2008-09. Thus, in the absence of statutory time limit prescribed for passing order with reference to collection of taxes, we follow the suit and read reasonable time limit to be four years from the end of the financial year for passing the order under sec. 206C in tune with the judicial precedents in NHK Japan Broadcasting Corpn.’s case [2008 (4) TMI 182 - DELHI HIGH COURT] and Hutchison Essar Telecom Ltd.’s case [2010 (4) TMI 45 - DELHI HIGH COURT] In view of the judicial fiat available in this regard which is beneficial to the assessee qua the time period prescribed for deduction of tax at source in Section 201(3) of the Act, we would give primacy to the judicial precedents in the absence of express statutory provision towards time limit in respect of obligation attached to Section 206C - Decided in favour of assessee
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