w w w . L a w y e r S e r v i c e s . i n



The Director of Income-Tax International Taxation, Bangalore & Another v/s The Executive Engineer, M/s. Bangalore Water Supply & Sewerage Board, Bangalore & Another


Company & Directors' Information:- K N INTERNATIONAL LIMITED [Active] CIN = U45201UP2002PLC026841

Company & Directors' Information:- D B H INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1950PTC057209

Company & Directors' Information:- V AND S INTERNATIONAL PVT LTD [Active] CIN = U74899DL1992PTC049964

Company & Directors' Information:- S S A INTERNATIONAL LTD [Active] CIN = U15122DL1995PLC068186

Company & Directors' Information:- A T N INTERNATIONAL LIMITED [Active] CIN = L65993WB1983PLC080793

Company & Directors' Information:- D D INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909PB1995PTC016929

Company & Directors' Information:- T K INTERNATIONAL LIMITED [Active] CIN = U55101OR1982PLC001092

Company & Directors' Information:- N R INTERNATIONAL LIMITED [Active] CIN = L74999WB1991PLC051738

Company & Directors' Information:- K J INTERNATIONAL LIMITED [Active] CIN = L15142PB1993PLC011274

Company & Directors' Information:- A K S INTERNATIONAL LIMITED [Active] CIN = U74899DL1996PLC076327

Company & Directors' Information:- S P INTERNATIONAL PRIVATE LIMITED [Active] CIN = U70100WB1994PTC063228

Company & Directors' Information:- B. K. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74999DL2006PTC157013

Company & Directors' Information:- R S C INTERNATIONAL LIMITED [Active] CIN = L17124RJ1993PLC007136

Company & Directors' Information:- J C INTERNATIONAL LIMITED [Active] CIN = U51109WB1999PLC089037

Company & Directors' Information:- M T L INTERNATIONAL PRIVATE LIMITED [Amalgamated] CIN = U24219UP2001PTC025965

Company & Directors' Information:- T C N S INTERNATIONAL PRIVATE LIMITED [Amalgamated] CIN = U51311DL1996PTC080096

Company & Directors' Information:- K V S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U18101DL2003PTC120770

Company & Directors' Information:- G N INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909DL2001PTC110766

Company & Directors' Information:- S H A M INTERNATIONAL PRIVATE LIMITED [Active] CIN = U45200MH1994PTC079867

Company & Directors' Information:- M K INTERNATIONAL LIMITED [Active] CIN = U51909DL1996PLC083430

Company & Directors' Information:- V. G. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51101DL2007PTC162540

Company & Directors' Information:- D R INTERNATIONAL PRIVATE LIMITED [Active] CIN = U24132DL1996PTC079867

Company & Directors' Information:- R H INTERNATIONAL LIMITED [Active] CIN = U72900DL2007PLC159452

Company & Directors' Information:- G & G INTERNATIONAL PRIVATE LIMITED [Active] CIN = U17120DL2012PTC234047

Company & Directors' Information:- A & D INTERNATIONAL PRIVATE LIMITED [Active] CIN = U36109RJ2007PTC024176

Company & Directors' Information:- H G E INTERNATIONAL PRIVATE LIMITED [Active] CIN = U19115UP2011PTC045112

Company & Directors' Information:- K A I INTERNATIONAL PRIVATE LIMITED [Active] CIN = U13100OR2007PTC009647

Company & Directors' Information:- C G INTERNATIONAL PRIVATE LIMITED [Active] CIN = U99999MH1996PTC097577

Company & Directors' Information:- K C INTERNATIONAL LIMITED [Active] CIN = U74899DL1994PLC060402

Company & Directors' Information:- M P INTERNATIONAL PRIVATE LIMITED [Active] CIN = U29130MH1997PTC107943

Company & Directors' Information:- A S INTERNATIONAL LIMITED [Strike Off] CIN = U74899DL1993PLC056158

Company & Directors' Information:- H C S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U15312PB2012PTC036219

Company & Directors' Information:- L N G INTERNATIONAL LIMITED [Active] CIN = U51909DL1993PLC053438

Company & Directors' Information:- S. D. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74900UP2008PTC036047

Company & Directors' Information:- S AND I INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909DL1995PTC072210

Company & Directors' Information:- L T INTERNATIONAL LIMITED [Active] CIN = U74899DL1999PLC097892

Company & Directors' Information:- A. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51102GJ2008PTC053840

Company & Directors' Information:- S J M INTERNATIONAL LIMITED [Active] CIN = U52110DL1987PLC028571

Company & Directors' Information:- S B S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U18101DL1997PTC085878

Company & Directors' Information:- R. A. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51225DL2008PTC177405

Company & Directors' Information:- B G INTERNATIONAL PRIVATE LIMITED [Active] CIN = U50300PB2014PTC038889

Company & Directors' Information:- S F INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74999PB2000PTC023654

Company & Directors' Information:- R T S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U63022DL1997PTC089328

Company & Directors' Information:- I K INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1995PTC066267

Company & Directors' Information:- C K INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1991PTC045625

Company & Directors' Information:- L A INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909PB2010PTC033683

Company & Directors' Information:- H R V INTERNATIONAL PRIVATE LIMITED [Amalgamated] CIN = U74899UP1993PTC057665

Company & Directors' Information:- K P INTERNATIONAL PRIVATE LIMITED [Active] CIN = U24110GJ2007PTC050026

Company & Directors' Information:- V S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U85100MH1997PTC109647

Company & Directors' Information:- N N INTERNATIONAL PRIVATE LIMITED [Active] CIN = U01111DL1999PTC099094

Company & Directors' Information:- S R V INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74140DL2012PTC243060

Company & Directors' Information:- V. S. Y. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74999UP2008PTC035521

Company & Directors' Information:- U M I INTERNATIONAL LTD [Strike Off] CIN = U51909WB1990PLC049671

Company & Directors' Information:- A. R. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51900MH2010PTC228539

Company & Directors' Information:- B R INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1993PTC055562

Company & Directors' Information:- M J INTERNATIONAL PRIVATE LIMITED [Amalgamated] CIN = U74899DL1982PTC013231

Company & Directors' Information:- D N INTERNATIONAL LIMITED [Active] CIN = U36911TN1996PLC034205

Company & Directors' Information:- M. H. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U70102DL2007PTC164267

Company & Directors' Information:- H AND Z INTERNATIONAL LIMITED [Active] CIN = U10102AS1995PLC004509

Company & Directors' Information:- M G M INTERNATIONAL PVT LTD [Active] CIN = U74899DL1982PTC013580

Company & Directors' Information:- J J INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51109DL1992PTC047657

Company & Directors' Information:- H D INTERNATIONAL LIMITED [Active] CIN = U74899DL1994PLC060720

Company & Directors' Information:- K. A. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51101UP2012PTC049338

Company & Directors' Information:- J & G INTERNATIONAL PRIVATE LIMITED [Active] CIN = U18109DL2012PTC238392

Company & Directors' Information:- K R INTERNATIONAL PRIVATE LIMITED [Active] CIN = U17291DL2008PTC172188

Company & Directors' Information:- D. J. INTERNATIONAL LIMITED [Strike Off] CIN = U65910MH1999PLC119298

Company & Directors' Information:- S P INTERNATIONAL PVT LTD [Strike Off] CIN = U99999UP1965PTC003091

Company & Directors' Information:- J M INTERNATIONAL PVT LTD [Active] CIN = U45201WB1991PTC050829

Company & Directors' Information:- D P C INTERNATIONAL PVT LTD [Active] CIN = U74210WB1984PTC037378

Company & Directors' Information:- B M INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1992PTC048736

Company & Directors' Information:- S G INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51109WB1998PTC086547

Company & Directors' Information:- B N INTERNATIONAL PRIVATE LIMITED [Active] CIN = U15412WB1999PTC089316

Company & Directors' Information:- V A INTERNATIONAL PRIVATE LIMITED [Active] CIN = U01111DL2000PTC104712

Company & Directors' Information:- S. J. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U27310DL2007PTC169438

Company & Directors' Information:- N H B INTERNATIONAL PRIVATE LIMITED [Converted to LLP] CIN = U67190MH1997PTC107387

Company & Directors' Information:- P D K INTERNATIONAL PVT LTD [Active] CIN = U74140WB1992PTC056468

Company & Directors' Information:- G. S. C. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U29120MH1994PTC080380

Company & Directors' Information:- A J INTERNATIONAL PRIVATE LIMITED [Converted to LLP] CIN = U74899DL1994PTC060818

Company & Directors' Information:- J S M INTERNATIONAL LIMITED [Active] CIN = U85110KA1996PLC020046

Company & Directors' Information:- M K N INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909DL2002PTC117207

Company & Directors' Information:- N M INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74120MH2012PTC234492

Company & Directors' Information:- S S M INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909DL1997PTC089876

Company & Directors' Information:- A P J INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51909HR2010PTC040304

Company & Directors' Information:- T. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U72900DL1997PTC091049

Company & Directors' Information:- V R INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51101UP2011PTC043952

Company & Directors' Information:- A & F INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U00265KA1995PTC018998

Company & Directors' Information:- M E C INTERNATIONAL PRIVATE LIMITED [Active] CIN = U33111GJ1963PTC082423

Company & Directors' Information:- J K INTERNATIONAL PRIVATE LIMITED [Active] CIN = U01100MH2004PTC144492

Company & Directors' Information:- D. S. R. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74999UP2010PTC039954

Company & Directors' Information:- B L S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74900UR2010PTC033210

Company & Directors' Information:- R B INTERNATIONAL LTD [Strike Off] CIN = U18101WB1993PLC059515

Company & Directors' Information:- P Y INTERNATIONAL PRIVATE LIMITED [Converted to LLP] CIN = U51102RJ1995PTC010133

Company & Directors' Information:- R C INTERNATIONAL LIMITED [Strike Off] CIN = U51909TG1991PLC012477

Company & Directors' Information:- N J INDIA INTERNATIONAL LIMITED [Strike Off] CIN = U70101UP2004PLC028722

Company & Directors' Information:- I AND A INTERNATIONAL PRIVATE LIMITED [Active] CIN = U72200TG1995PTC019936

Company & Directors' Information:- P V INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1998PTC094598

Company & Directors' Information:- I B INTERNATIONAL PRIVATE LIMITED [Under Process of Striking Off] CIN = U72200DL2000PTC105735

Company & Directors' Information:- A M INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U74899DL1995PTC066228

Company & Directors' Information:- K K M INTERNATIONAL PRIVATE LIMITED [Active] CIN = U17110MH1995PTC089836

Company & Directors' Information:- Z. H. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U21098MH2010PTC210735

Company & Directors' Information:- J R INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909TN2002PTC048744

Company & Directors' Information:- H P AND B G INTERNATIONAL PRIVATE LIMITED [Active] CIN = U50500DL1999PTC100851

Company & Directors' Information:- L S INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U74999DL2009PTC193390

Company & Directors' Information:- M B INTERNATIONAL PVT LTD [Strike Off] CIN = U52190DL2001PTC110572

Company & Directors' Information:- O K R INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U74900DL1996PTC077152

Company & Directors' Information:- B B C INTERNATIONAL PVT LTD [Strike Off] CIN = U25209WB1984PTC037383

Company & Directors' Information:- K S INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51909MH2001PTC134345

Company & Directors' Information:- A TO Z INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51101TN1992PTC022507

Company & Directors' Information:- C & A INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51900MH1982PTC026718

Company & Directors' Information:- J S INTERNATIONAL PVT LTD [Strike Off] CIN = U51900MH1982PTC027604

Company & Directors' Information:- A C INDIA INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1989PTC034784

Company & Directors' Information:- S. S. N. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U29306DL1981PTC012616

Company & Directors' Information:- INDIA INTERNATIONAL COMPANY PRIVATE LIMITED [Active] CIN = U51228MH1955PTC009483

Company & Directors' Information:- A H INTERNATIONAL PRIVATE LIMITED [Active] CIN = U55101RJ2021PTC073171

Company & Directors' Information:- R K INTERNATIONAL PVT LTD [Strike Off] CIN = U63040PB1982PTC004926

Company & Directors' Information:- L & P INTERNATIONAL PRIVATE LIMITED [Active] CIN = U52100DL2016PTC292025

Company & Directors' Information:- J D K INTERNATIONAL PVT LTD [Active] CIN = U74899DL1982PTC014087

Company & Directors' Information:- R B N INTERNATIONAL PRIVATE LIMITED [Active] CIN = U52300DL2012PTC243998

Company & Directors' Information:- P AND P INTERNATIONAL PRIVATE LIMITED. [Strike Off] CIN = U24100OR1993PTC003244

Company & Directors' Information:- B P INTERNATIONAL PVT LTD [Strike Off] CIN = U31909HP1984PTC005785

Company & Directors' Information:- E C INTERNATIONAL PVT LTD [Strike Off] CIN = U99999DL1982PTC013146

Company & Directors' Information:- R A R E INTERNATIONAL PRIVATE LIMITED [Active] CIN = U31900DL2005PTC134395

Company & Directors' Information:- TAXATION INDIA PRIVATE LIMITED [Strike Off] CIN = U74140DL2000PTC106716

Company & Directors' Information:- D I D INTERNATIONAL PRIVATE LIMITED [Converted to LLP] CIN = U28112MH2014PTC258750

Company & Directors' Information:- S R A INTERNATIONAL PVT LTD [Strike Off] CIN = U99999DL1980PTC010389

Company & Directors' Information:- R Z INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74900KA2012PTC064445

Company & Directors' Information:- M M INTERNATIONAL PVT LTD [Converted to LLP] CIN = U51312DL1977PTC008583

Company & Directors' Information:- K K S WATER PRIVATE LIMITED [Active] CIN = U52100WB2014PTC199844

Company & Directors' Information:- A K INDIA INTERNATIONAL PRIVATE LTD [Strike Off] CIN = U45201DL1981PTC012389

Company & Directors' Information:- OF WATER PRIVATE LIMITED [Active] CIN = U51909MH2018PTC317142

Company & Directors' Information:- O P INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U55101PB2013PTC037499

Company & Directors' Information:- J & A INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51900PB2013PTC037302

Company & Directors' Information:- A P M INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U74900TN2014PTC095953

Company & Directors' Information:- Y. A. INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U74900RJ2012PTC040431

Company & Directors' Information:- D & A INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74999MH2015PTC262713

Company & Directors' Information:- R L INTERNATIONAL PRIVATE LIMITED [Active] CIN = U18204UP2016PTC076344

Company & Directors' Information:- V P S INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U93030UP2014PTC066242

Company & Directors' Information:- F & G SUPPLY PRIVATE LIMITED [Active] CIN = U51900DL2012PTC239188

Company & Directors' Information:- ENGINEER & ENGINEER PRIVATE LIMITED [Active] CIN = U74999DL2016PTC293097

Company & Directors' Information:- C S ENGINEER PRIVATE LIMITED [Strike Off] CIN = U45201DL2003PTC122355

Company & Directors' Information:- J V INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51102DL2012PTC240197

Company & Directors' Information:- T. G. S. WATER PRIVATE LIMITED [Strike Off] CIN = U51109DL2010PTC205948

Company & Directors' Information:- R I K INTERNATIONAL PRIVATE LIMITED [Under Process of Striking Off] CIN = U52590DL2015PTC283801

Company & Directors' Information:- WATER INDIA PRIVATE LIMITED [Active] CIN = U74990DL2016PTC298912

Company & Directors' Information:- Y & H INTERNATIONAL PRIVATE LIMITED [Active] CIN = U63000DL2014PTC266649

Company & Directors' Information:- S R L INTERNATIONAL PRIVATE LIMITED [Under Process of Striking Off] CIN = U20296AP2013PTC085533

Company & Directors' Information:- M D INTERNATIONAL LIMITED [Active] CIN = U74140MH1981PTC025007

Company & Directors' Information:- INTERNATIONAL CO PRIVATE LIMITED [Strike Off] CIN = U51109UR1935PTC000663

Company & Directors' Information:- A B C INTERNATIONAL PVT LTD [Strike Off] CIN = U99999DL1990PTC041062

Company & Directors' Information:- D C M INTERNATIONAL LTD. [Strike Off] CIN = U99999DL2000PTC004208

Company & Directors' Information:- B C I INTERNATIONAL LIMITED [Strike Off] CIN = U74900DL1977PLC008468

    I.T.A. Nos. 166, 148 of 2011

    Decided On, 24 August 2020

    At, High Court of Karnataka

    By, THE HONOURABLE MR. JUSTICE ALOK ARADHE & THE HONOURABLE MR. JUSTICE H.T. NARENDRA PRASAD

    For the Appearing Parties: K.V. Aravind, Advocate, A. Shankar, Sr. Counsel, B.S. Balachandran, Ankur Pai, Advocates.



Judgment Text


(Prayer: This ITA is filed Under Section 260-A of I.T. Act, 1961, arising out f order dated 04.01.2011 passed in ITA No.1067/Bang/2008, for the Assessment Year 2000-01, praying that this Hon'ble Court may be pleased to:

(i) formulate the Substantial questions of law stated therein.

(i) allow the appeal and set aside the orders passed by the ITAT, Bangalore in ITA No.1067/Bang/2008 dated 04-01-2011 and confirm the order of the Appellate Commissioner Confirming the order passed by the Income Tax Officer, International Taxation, Ward-1(1), Bangalore in the interest of justice and equity.

This ITA is filed Under Section 260-A of I.T. Act, 1961, arising out f order dated 04.01.2011 passed in ITA Nos.1065 to 1067/Bang/2008 for the Assessment Year 2000-01 to 2002-03, praying that this Hon'ble Court may be pleased to:

(i) formulate the substantial questions of law stated therein.

(i) allow the appeal and set aside the order of the appellate tribunal dated 04-01-2011 in ITA Nos.1065 to 1067/Bang/2008, in the interest of justice and equity.)

Alok Aradhe, J.

Common Judgment

1. I.T.A.No.166/2011 under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act' for short) has been preferred by the revenue, whereas, I.T.A.No.148/2011 has been preferred by the assessee. Since, both the appeals arise out of common order passed by the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal', for short) and on account of similarity of substantial questions of law involved in these appeals, they were heard together and are being decided by this common judgment. I.T.A.No.148/2011 pertains to the Assessment years 2000-01 to 2002-03, whereas, I.T.A.No.166/2011 pertains to Assessment year 2000-01.

2. I.T.A.No.166/2011 was admitted by a bench of this Court vide order dated 30.01.2012 on the following substantial questions of law:

(i) Whether the Tribunal was right in holding that initiation of proceedings under Section 201(1) and 201(1A) of the Act is beyond the period of six years of the short deduction is above one lakh as in this case, then the same would be barred by limitation as held in the case of M/S MAHENDRA & MAHENDRA, (2002) 122 TTJ (MUM) (SB) 577 and the decision of the Delhi High Court in the case of CIT VS. NHK JAPAN BROADCASTING CORPORATION, (2008) 305 ITR 137?

(ii) Whether the Tribunal was correct in proceeding to lay down the period of limitation for initiation of proceedings under Section 201(1) of the Act when the legislation has specifically omitted such period prescribed under the earlier Section 231 of the Act and Section 201(3) of the Act proviso clearly provide that in respect of any financial year commencing on or before 1.04.2007 can be passed on or before 31.03.2011?

3. I.T.A.No.148/2011 was admitted by a bench of this court vide order dated 29.08.2011 on the following substantial question of law:

(i) What is the reasonable time within which the proceedings have to be initiated under Section 201(1) of the Income Tax Act, as during the relevant period, the statute did not prescribe any period of limitation?

4. Facts leading to filing of these appeals briefly stated are that assessee is a Government of Karnataka undertaking, which is constituted under the Bangalore Water Supply and Sewerage Act, 1964 to make provision for supply, sewerage and the sewage deposited in Bangalore Metropolitan Area and matters connected therewith. The assessee implemented and commissioned Cauvery Stage - I, II and III water supply projects and in order to meet the growing demand for water, the assessee envisaged a project called 'Cauvery Stage - IV' to draw 270 litres of water per day from Cauvery River. In order to get the benefit of consultancy services of International Standards, the assessee floated global tenders and contract for Stage - I project was awarded to a Consortium, consisting of two companies and an agreement was executed on 29.11.1996 as per which maximum charges payable for consultancy services were Rs.19,64,71,161/-. Thereafter, a supplementary agreement was executed on 29.03.2002 for enhanced charges. For the Assessment years 1998-99 to 2005-06, the assessee remitted the tax deducted at source at the rate of 30% as the amount paid was in the nature of fee for technical services payable by the State Government in pursuance of an agreement.

5. The Assessing Officer by an order dated 21.11.2006 for all the years under dispute held that the assessee was required to remit tax at the rate of 48% for the financial years upto 2001-2002 (Assessment years 2002-03) and at the rate of 40% for the subsequent years on the ground that the consultant had a permanent establishment in India and therefore, the payment would be subject to tax at the maximum rate of 40% applicable to any foreign company and the assessee action in remitting tax at the rate of 40% had resulted in short remittance. The assessee was held as an assessee in default in terms of Section 201(1) of the Act and a demand was also made for interest as per Section 201(1A) of the Act. Accordingly, a sum of Rs.3,81,21,797/- was demanded towards short deduction and a demand for a sum of Rs.2,92,92,842/- was made on account of interest for all the years. Being aggrieved, the assessee filed an appeal.

6. The Commissioner of Income Tax (Appeals) by an order dated 13.11.2007 dismissed the appeal. The assessee thereupon approached the Income Tax Appellate Tribunal. The Tribunal by an order dated 04.01.2011 inter alia held that period of limitation for initiating proceedings under Section 201(1) and 201(1A) of the Act is four years from the end of relevant Assessment years, where the tax deducted is less than Rs.1 Lakh and if it is more than Rs.1 Lakh the period of limitation would be six years. The Tribunal accordingly directed the Assessing Officer to verify the period of limitation in the aforesaid case and where the limitation of the proceeding is after six years from the end of relevant Assessment years, the said proceedings were held to be quashed. In the aforesaid factual background, the assessee as well as revenue have approached this court by filing these appeals.

7. Learned counsel for the revenue submitted that no time limit can be prescribed for initiation of a proceeding where the statute does not provide the same. It is further submitted that in any case, it should be held to be six years. On the other hand, learned Senior counsel for the assessee has held that the issue with regard to limitation for initiation of proceeding under Section 201(1) and 201(1A) of the Act is no longer res integra. In this connection, reliance has been placed on decision of the Supreme Court in 'STATE OF PUNJAB V. BHATINDA DISTRICT COOPERATIVE MILK PRODUCERS UNIION LTD.', (2007) 11 SCC 363 as well as decision of this court in 'CIT VS. BHARAT HOTELS LTD.,', 384 ITR 77 (KARNATAKA), decisions of Delhi High Court in 'CIT V. NHK JAPAN BROADCASTING CORPORATION', 305 ITR 137 (DELHI), 'BHARTI AIRTEL LTD VS. UOI', 245 TAXMAN 80 (DELHI), 'CIT VS. CJ INTERNATIONAL HOTELS (P) LTD', 372 ITR 684 (DELHI), decision of Andhra Pradesh High Court in 'CIT V. UB ELECTRONIC INSTRUMENTS LTD', 371 ITR 314 (ANDHRA PRADESH), decision of Bombay High Court in 'DIT VS. MAHINDRA AND MAHINDRA', 365 ITR 560 (BOMBAY) and decision of High Court of Himachal Pradesh in 'CIT V SATLUJ JAL VIDYUT NIGAM LTD', 345 ITR 552 (HIMACHAL PRADESH).

8. We have considered the submissions made by learned counsel on both the sides and have perused the record. The seminal issue, which arises for consideration in these appeals is with regard to the reasonable period of limitation for initiation of proceeding under Section 201(1) and 201(1A) of the Act. It is not in dispute that for the relevant Assessment years i.e., 2000-01 to 2002-03, the proceedings were initiated after a period of four years. The aforesaid issue is no longer res integra. The Supreme Court in BHATINDA DISTRICT COOPERATIVE MILK PRODUCERS UNION LTD., (supra) has held as follows:

18. Insofar as the Income-Tax Act is concerned, our attention has been drawn to S.153(1)(a) thereof which prescribes the time limit for completing the assessment, which is two years from the end of the Assessment year in which the income was first assessable. It is well known that the Assessment year follows the previous year and, therefore, the time limit would be three years from the end of the financial years. This seems to be a reasonable period as accepted under Section 153 of the Act, through for completion of assessment proceedings. The provisions of reassessment are under Sections 147 and 148 of the Act and they are on a completely differing footing and, therefore, do not merit consideration for the purpose of this case.

19. Even though the period of three years would be a reasonable period as prescribed under Section 153 of the Act for completion of proceedings, we have been told that Income Tax Appellate Tribunal has, in a series of decisions, some of which have been mentioned in the order which is under challenge before us, taken the view that four years would be a reasonable period of time for initiating action, in a case where no limitation is prescribed.

The aforesaid decision was followed by a division bench of this court in BHARAT HOTELS LTD sup

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ra. 9. In view of aforesaid enunciation of law, it is axiomatic that reasonable period for initiation of proceedings in respect of the Assessment years in question, at the time where no limitation was prescribed has been held to be four years. It is not in dispute that in the instant case, the proceedings under Section 201(1) and 201(1A) of the Act have been initiated after a period of four years. Therefore, the same cannot be held to be initiated within the reasonable time and consequently, the proceedings cannot be sustained in the eye of law. In view of preceding analysis, the substantial questions of law framed in I.T.A.No.166/2011 are answered against the revenue and in favour of the assessee. The substantial question of law framed in assessee's appeal is answered in favour of the assessee and against the revenue. The impugned order of the Tribunal insofar as it pertains to Assessment years 2000-01 to 2002-03 is hereby quashed. In the result, I.T.A.No.148/2011 is allowed, whereas I.T.A.No.166/2011 is dismissed.
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