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TMI Blog2011 (8) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... eal under Section 260A of the Income-tax Act, 1961 ( Act ) is at the instance of an alleged deemed assessee in default and is directed against an order dated February 18, 2011, passed by the Income-tax Appellate Tribunal, B Bench, Kolkata in I. T. A. No.495/ Kol/ 2010 for the Assessment Year 2002-03 modifying the order of the CIT(A) and partly allowing the appeal preferred by the appellant before us. Being dissatisfied, the alleged deemed assessee in default has come up with this appeal. The facts giving rise to filing of this appeal may be summed up thus: a) The appellant is an assessee within the meaning of Section 2(7) of the Act and at the material time was engaged in the business of importing and dealing in pulses and edible oil. b) For the Assessment Year 2002-03, relevant to the previous year ending on March 31, 2002, the appellant filed a return of income disclosing an income of Rs.4,66,844/- and ultimately the assessment was completed under Section 143(3) of the Act by an order dated March 27, 2006 and the net tax and the interest payable by the appellant was determined at Rs. 20,607/-. c) In the month of April, 2006 the appellant received a notice dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated March 7, 2008 not only on merit but also on the ground that initiation of proceedings was barred by the period of limitation. The appellate authority, however, affirmed the order of assessing officer by overruling the objections taken by the appellant and further held that the time limit for initiating action for the period in question should be 6 years which is the maximum period available under the Act for reopening an assessment of the amount in question and in this case, it was passed within the said period. h) Being dissatisfied, the appellant preferred an appeal before the Tribunal. The Tribunal by the order impugned accepted the reasons assigned by the CIT(A) on the question whether the amount paid by the appellant to the Globe International came within the purview of Section 194A of the Act but reduced the amount of default from Rs.60,54,301/- to Rs.49,20,681/- as according to the Tribunal the appellant was really in default of that amount in deducting the TDS. The Tribunal, accordingly, directed the Assessing Officer to recompute the tax on that amount and to calculate the consequential interest under Section 201(1A). The Tribunal, however, did not deal with the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the unspent credit limit of Globe International Ltd. and in lieu thereof, her client paid the amount to Globe International by way of reimbursement of the interest paid by the latter to the bank and thus, there was no liability to deduct in terms of Section 194A of the Act as her client did not pay anything to Globe International as interest. Ms. Roy Chowdhury, therefore, prays for setting aside the order of the Tribunal as well as the assessing officer on the ground that Section 194A had no application to the payment in question. In support of her contentions, Ms. Roy Chowdhury placed strong reliance upon the following decisions: 1) State of Punjab vs. Bhatinda District Co-operative Milk Procucers Union Ltd reported in (2007) 11 SCC 363; 2) Commissioner of Income tax vs. Kelvinator of India Ltd reported in (2010) 320 ITR 561 (SC)= (2010) 2 SCC 723; 3) Commissioner of Income tax vs. NHK Japan Broadcasting Corporation reported in (2008) 305 ITR 137 (Delhi). Mr. Nizamuddin, the learned Advocate appearing on behalf of the Revenue, has, on the other hand, opposed the aforesaid contentions of Ms. Roy Chowdhury and has contended that as the legislature at the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, find substance in the contention of Ms. Roy Chowdhury that the time limit prescribed in Section 149 of the Act for taking action under Section 147 by giving notice under Section 148 cannot have any application for taking action under Section 201 of the Act as it is not a case of income escaping assessment but a case of inaction of a debtor to deduct tax on interest while making payment of the interest in violation of Section 194A of the Act. As pointed out the Supreme Court in the case of M/s. Hindustan Coca Cola Beverage Pvt. Ltd Vs. CIT (supra), relied upon by Mr. Nizamuddin, the Circular No. 275/201/95-IT (B), dated January 29, 1997 issued by the Central Board of Direct Taxes, has put an end to the controversy as regards the extent of liability of the deductor. The circular is quoted below: "No demand visualized under Section 201(1) of the Income-tax Act should be enforced after the tax deductor has satisfied the officer-in-charge of TDS, that taxes due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under Section 201 (1A) of the Act till the date of payment of taxes by the deductee-assessee or the liability for pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant, contends that in the absence of fixation of rule of limitation, the power can be exercised within a reasonable time and in the absence of such prescription of limitation, the power to enforce the order is vitiated by error of law. He places reliance on the decisions in State of Gujarat v. Patel Raghav Natha (1970) 1 SCR 335: (AIR 1969 SC 1297); Ram Chand v. Union of India, (1994) 1 SCC 44: (1993 AIR SCW 3479) and Mohamad Kavi Mohamad Amin v. Fatmabai Ibrahim [CA No. 5023/85 decided on August 22, 1996]. We find no force in the contention. It is seen that the order of ejectment against the applicant has become final. Section 21 of the Mamlatdar's Court Act does not prescribe any limitation within which the order needs to be executed. In the absence of any specific limitation provided thereunder, necessary implication is that the general law of limitation provided in Limitation Act (Act 2 of 1963) stands excluded. The Division Bench, therefore, has rightly held that no limitation has been prescribed and it can be executed at any time, especially when the law of limitation for the purpose of this appeal is not there. Where there is statutory rule operating in the field, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpleting assessment is three years which can be extended to maximum five years on recording reasons by the Commissioner. In such a case, the said Bench held that if no period of limitation is prescribed, the statutory authority must exercise its jurisdiction within a reasonable period. According to the said Bench, what should be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors. In that case, it was held that the revisional power should also be exercised within three years and in any event, should not exceed five years. With great respect to the learned judges of the Bench, we are unable to accept that decision as a precedent for the general proposition of law that when there is no period of limitation prescribed in a Statute for exercising a power, that must be exercised in all cases within the reasonable period even in the absence of any intension of the legislature to the contrary because the attention of the Bench was not drawn to the earlier decisions of the Supreme Court of larger bench in the cases of Uttam Namdeo Mahale Vs. Vithal Deo and others (supra) and Ishar Singh Vs. Financial Commissioner a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to reopen assessments on the basis of mere change of opinion , which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to reassess. The assessing officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of certain precondition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. We fail to appreciate how the said decision can be of any help to the appellant for resolving the question as to the applicability of any reasonable period of limitation for invoking the power under Section 201 of the Act. In our opinion, the said decision is totally irrelevant for our purpose. Thus, the decisions cited by Ms. Roy Chowdhury are of no assistance to her client. We, therefore, find no substance in the first point raised by Ms. Roy Chowdhury as regards the question of limitation. On merit, Ms. Roy Chowdhury tried to convince us that her client did not take any loan from Globe International but utilized its unspent credit limits for importing the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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