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TMI Blog2019 (9) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... 06C 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 dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 01.06.2017 arising in the assessment order dated 18.03.2015 passed by the Assessing Officer (AO) under sec. 206C(6A)/206C(7) of the Income Tax Act, 1961 (the Act) concerning A.Y. 2009-10. 2. The grounds of appeal raised by the assessee read as under:- 1. On the facts and in the circumstances of the case, the learned C.I.T. (Appeals) erred in rejecting the relevant ground of appeal raised before him by the appellant-company to the effect that the order passed by the Assessing Officer dated 18.3.2015 under section 206C(6A)/ 206C(7) of the I. T. Act is bad in law, being time barred. 2. On the facts and in the circumstances of the case, the learned C.I.T. (Appeals) erred in confirming the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2014 i.e. beyond the reasonable period of four years and hence is time barred. The AO however did not find substance in either of the plea and treated the assessee as in default under sec. 206C(6A) of the Act in respect of failure to collect tax. A demand of ₹ 1,48,527/- was imposed for default in respect of tax under sec. 206C(6A) of the Act. Interest of ₹ 1,71,397/- on such default was also levied under sec. 206C(7) of the Act. The aggregate demand of ₹ 3,19,934/- was accordingly raised on the assessee by the AO by passing order under sec. 206C(6A)/206C(7) of the Act order dated 16.03.2015 for A.Y. 2009-10 in question. 4. Aggrieved, the assessee preferred appeal before the CIT(A) without any success. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r years from the financial year in which the default was allegedly committed. It is the case of the assessee that in the absence of any statutory time limit prescribed for passing such order under sec. 206C of the Act, such orders are required to be passed within a reasonable period of time and the AO cannot be permitted to pass such order of alleged default in compliance of TCS provisions under sec. 206C of the Act after unreasonable lapse of time. It is thus contended on behalf of the assessee and order passed under sec. 206C of the Act imposing tax and interest for alleged default is vitiated by lapse of time in this regard. It is the case of the assessee that it is an established legal position that wherever under the scheme of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. We notice that no time limit has been prescribed for passing order under sec. 206C of the Act. The CIT(A) has assumed that in the absence of statutory time limit provided, the provisions of Section 201(3) of the Act providing time limit for deduction of tax at source can be parallelly adopted for the purposes of viewing what is reasonable time. We do not see much force in such presumption especially in the matter of limitation. The limitation prescribed under one provision of the Act cannot be applied straightway to some other provisions of the Act. The legislature, in its wisdom, inserted sub-section (3) under sec. 201 of the Act by the Finance (No.2) Act, 2009 w.e.f. 2001 proposing time limit for passing orders under sec. 201 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligations towards TDS provisions, the Hon ble Bombay High Court in DIT (International Taxation) v. Mahindra Mahindra Ltd. [2014] 48 taxmann.com 150/225 Taxman 306/365 ITR 560 concerning A.Y. 1998-99 ruled that limitation period would apply to TDS orders under sec. 201/1A of the Act even though no time limit was prescribed under the Act at the relevant time. The Hon ble High Court observed that time limit would be three years from the end of the financial year which seemed to be reasonable period as accepted under sec. 153 of the Act, though for completion of assessment proceedings. However, a greater period of four years for commencement or initiation of proceedings was given by the Hon ble Delhi High Court in NHK Japan Broadcasting Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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