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TMI Blog2019 (5) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1A) of the Act on 27th March 2015 is after expiry of six years from the end of the relevant financial year i.e., F.Y. 2005 06. That being the case, even as per the provisions of section 201(3) the order passed by the AO u/s 201(1) treating the assessee as assessee in default is grossly barred by limitation. - Decided in favour of assessee. - ITA no.671/Mum./2018, ITA no.836/Mum./2018 - - - Dated:- 30-4-2019 - Shri Saktijit Dey, Judicial Member And Shri N.K. Pradhan, Accountant Member For the Assessee : Shri Yogesh Thar For the Revenue : Shri S.H. Usmani ORDER PER SAKTIJIT DEY. J.M. The aforesaid cross appeals arise out of order dated 7th November 2017, passed by the learned Commissioner (Appeals) 55, Mumbai, pertaining to the assessment year 2006 07. ITA no.836/Mum./2018 Revenue s Appeal 2. The grounds raised by the Revenue are on the common issue, whether learned Commissioner (Appeals) was justified in holding that the order passed under section 201(1) and 201(1A) of the Income-tax Act, 1961 (for short the Act ) is barred by limitation? 3. Brief facts are, the assessee, earlier known as Indian Rayon I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014] 365 ITR 560 (Bom.), held that the Assessing Officer could not have passed the order under section 201(1) and 201(1A) of the Act after expiry of six years from the end of the financial year relevant to the impugned assessment year. Accordingly, holding the order passed by the Assessing Officer to be barred by limitation, learned Commissioner (Appeals) quashed the same. 5. The learned Departmental Representative relying upon the observations of the Assessing Officer and grounds raised submitted, there being no limitation prescribed under section 201 of the Act, learned Commissioner (Appeals) was not justified in quashing the order passed by the Assessing Officer. He submitted, when the assessee is in default in deducting tax at source which it was obliged to do under the Act, the Assessing Officer was justified in raising the demand under section 201(1) and 201(1A) of the Act. 6. The learned Authorised Representative drawing our attention to the observations of the Assessing Officer submitted, the issue before the High Court was whether the assessee can be treated as representative assessee. Therefore, the High Court never had an occasion to deal with the issue wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Writ Application was in relation to the issue whether the assessee can be treated as representative assessee of certain overseas companies. A careful reading of the aforesaid judgment of the Hon'ble Jurisdictional High Court clearly reveals that it has nothing to do with the proceedings under section 201 of the Act. Therefore, the issue arising in the present appeal is in no way connected to the issue in dispute adjudicated by the Hon ble High Court in the judgment referred to above. When a question was raised, whether during the existence of a certificate issued under section 195(2) of the Act proceedings under section 163 of the Act can be initiated against the assessee, the Hon ble High Court held that since the certificate issued under section 195(2) of the Act has already expired and remittances have been made without deduction of tax, Revenue can proceed under section 163 of the Act. However, in the present appeal, we are on the issue of validity of the order passed under section 201(1) and 201(1A) of the Act. Undisputedly, the financial year involved in the present appeal is F.Y. 2006 07. The Assessing Officer has issued the show cause notice under section 201(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a financial year commencing on/or before 1st Day of April 2007, an order under section 201(1) of the Act may be passed at any time on/or before 31s March 2011. We propose to deal with the applicability of proviso to sub-section (3) of section 201 of the Act at a later stage. Thus, it is clear from the facts on record as well as the provisions of section 201 of the Act as applicable to the impugned assessment year no limitation period was prescribed under section 201 of the Act either for initiation or for completion of the proceedings. Therefore, as held in judicial precedents, absence of limitation period will not empower the Assessing Officer to pass an order under section 201 of the Act at any time at his sweet will. The Hon'ble Courts have held that, even, in the absence of limitation period prescribed under a particular provision, the order has to be passed within a reasonable period. In the context of section 201 of the Act itself, the Hon'ble Delhi High court in NJK Japan Broadcasting Corpn. (supra) approving the decision of the Tribunal has held that a period of four years would be reasonable period of time for initiation of proceeding under section 201 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer could have completed the proceedings under section 201 of the Act not beyond 31st March 2011. The Hon'ble Gujarat High Court in Tata Teleservices Ltd. v. Union of India [2016] 66 taxmann.com 157/238 Taxman 331/385 ITR 497 Guj.) have held that in respect of financial year 2007-08 and earlier years, only proceedings that were pending could be completed by 31st March 2011 and as such no fresh proceedings to be commenced for the said period. Undisputedly, in the facts of the present case, no proceedings under section 201 of the Act were pending before the Assessing Officer. By the time the proceedings under section 201 of the Act were initiated by issuing notice under section 201 on 27th January 2014, it has already become barred by limitation. That being the case, looked at from any angle, the impugned order passed under section 201(1) and 201(1A) of the Act being barred by limitation has to be quashed. Accordingly, we do so. Consequently, the impugned order of the learned Commissioner (Appeals) is reversed and set aside. 8. The aforesaid decision of the Co ordinate Bench squarely applies to the facts of the present appeal. Undisputedly, the order passed under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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