Y.ii^pl^ Hyoerao,Lo :T _In,Li 1... T. Uj4. [Laborarorres ]Lelalgana.[Ltd ][, ][8-2_337, ][Foad ][N: ][) ], [Banlara ][Hrils v. Naras,Imharn

IN THE HIGH COURT AT HYDERABAD(Special Original Jurisdiction) WEDNESDAY, THE TWENTY TWO THOUSAND AND PRESENT THE HONOURABLE THE ANDTHE HONOURABLE SRI JUSTICE [N.TUKARAMJI] WRIT PETITIO N NO: [1513 ] [2019] Between: Dr. Reddv's Laboratories [Ltd., 8-2-337, ][Road ][No. ][3.. ][Banjara Hills, Hyderabad]- 500 03'4, Telangana, lndia, [Through ][its ][Authorized Signatory' ][Mr' ] [V']Narasimham ...PETITIONER AND 1The Deputy Commissioner [of lncome Tax ][-1, lnternational ][Taxation ][Aayakar]Bhavan, Bisheerbagh [Hyderabad - 500 004]Bhavan, Bisheerbagh [Hyderabad - 500 004] The Union of lndia, through [the ][Secretary, Ministry ][of ][Finance, ][Government of]lndia, North Block, NewDelhi [1'10101.]lndia, North Block, NewDelhi [1'10101.] 2 ...RESPONDENTS Petition under Article [226 ][of ][the constitution ][of ][lndia ][praying ][that in ][the]circumstances stated in the [affidavit filed ][therewith, ][the ][High ][court ][may ][be]pleased to issue a writ of certiorari [or ][any ][other ][writ ][order ][or ][direction ][under]Article 2261227 of the [constitution ][of ][lndia calling ][for ][the ][records ][of ][the ][case]of [the lmpugned ][order ][dated December ][14,2018 ][(Exhibit]leading to the [passing ]H) anJ, after going through [and examining ][the ][question of ][the ][validity, ][propriety]ano legality ine16 ot, be [pleased ][to ][declare ][the ][same ][to ][be ][illegal ][and]unenforceable, and [quash ][the ][same.] lA NO: 2 OF 2019 Petition under Section [151 ][C]PC praying that in the [circumstances ][stated]in the affidavit filed in support [of the]petition, the High Court may be [pleased ][may]be pleased [pending ]the [hearing]and final disposal of [this ][Petition' ][the]Respondents be restrained [from ][taking ][any ][steps ][pursuan]t to the imPugnedOrder dated December [14,2018] lA NO: 3 OF 20 19 Between: 1t he Detr;rrty [r-; ]) ,missioner of Income Tax -1, lnternatio r:rl T;rxation #505.Aayakar Bha,r r,'. Elasheerbagh Hyderabad _ 500 004Aayakar Bha,r r,'. Elasheerbagh Hyderabad _ 500 004 2,l [lra ][Uf.r ][rrt,r,t ] [ta ].tlrror-rglt [lhe Secretary. ][t\4inistry ][of ][r ][n ][rnc ]-,, [Governrnent ]oftr [rora ]N{,rth H I k. New D-lltr [.l ]10 101,l [lra ][Uf.r ][rrt,r,t ] [ta ].tlrror-rglt [lhe Secretary. ][t\4inistry ][of ][r ][n ][rnc ]-,, [Governrnent ]oftr [rora ]N{,rth H I k. New D-lltr [.l ]10 101 ..,PETITIONERS AND Y.ii^Pl^ HyoeraO,lO :t _In,li 1..*. t. UJ4. [Laborarorres ]lelalgana.[Ltd ][, ][8-2_337, ][foad ][N: ][) ], [Banlara ][Hrils,] Through its Ar llr:rrzed Signatory, Mr. M. V. Naras,imharn ...RESPONDENTS Petition :ncrer r:,ection 151 cpc praying that i. the crr.curnstances stated in the affidavit frled rr support of the peiition, t.-f,e Ulgr, Cou rt me y be pleased tovacate the inte'rm o .'ior dated 15.02 2o1g in wp No 1513 c' 20i 9 as extendedvacate the inte'rm o .'ior dated 15.02 2o1g in wp No 1513 c' 20i 9 as extendedfrom time to tinre zrnr ismiss the present W.p. No. 1513 of 2(. 1g with costs_ counsel for the Peti ir:ner: SRI DEEPAK cHopRA & sRl plt/r.Tls;HTHA sINGHREPRESENTING FOR SRI ROHIT POGULA Counsel for tho Res )ondent No..l: M/s. K. MAMATA C:HOU|)AR\., SR. SC FOR INCOME TAX DEFARTT\IE:NT Counsel for ther Res rondent No.2: SRI GADI PRAVEEN KU Mi\R, DY. SOLICITOR GENERAI- OF INDIA The Court made the rollowing: ORDER THE HON'BLE[T] HIEF IUS UIIAL BH[T]YAN]AND TEHON'BLE[ SR]I ruSTICE N.TUKARAMIIw.P.No.13 oft9 ORDER, 1ne, [rl,e ][t ][1on'hh rl'e ][Lhil ][lttri'e ][ttjlal ][tshryan)] Ffuard Mr. [Deepak Chopra ][and ][Mr' ][Pratishtha ][Singh'] counsel for the Peti ir:ner: SRI DEEPAK cHopRA & sRl plt/r.Tls;HTHA sINGHREPRESENTING FOR SRI ROHIT POGULA Counsel for tho Res )ondent No..l: M/s. K. MAMATA C:HOU|)AR\., SR. SC FOR INCOME TAX DEFARTT\IE:NT Counsel for ther Res rondent No.2: SRI GADI PRAVEEN KU Mi\R, DY. SOLICITOR GENERAI- OF INDIA The Court made the rollowing: ORDER THE HON'BLE[T] HIEF IUS UIIAL BH[T]YAN]AND TEHON'BLE[ SR]I ruSTICE N.TUKARAMIIw.P.No.13 oft9 ORDER, 1ne, [rl,e ][t ][1on'hh rl'e ][Lhil ][lttri'e ][ttjlal ][tshryan)] Ffuard Mr. [Deepak Chopra ][and ][Mr' ][Pratishtha ][Singh'] Ieamed counsel [for ][the petitioner ][and ][I\4s' ][K'Mamata ][Choudary]leamed Senior [Standing Counsel, ][Income Tax ][Department ][for]respondent [No.1. ]['We ][have also heard ][Mr' ][Gadi ][Praveen ][Kumaq]leamed [DepurySolicitor ][General ][of ][India ][for ][respondent ][No'2'] 2. By [filing ][this petidon ][under ][Article ][226 ][of ][the ][Constitution] of India, Petitioner [has ][assailed ][legaliry ][and validiry ][of ][the ][order]dated 14.12.2018 [passed ][by ][respondent ][No'1 ][under]Sections 201(1) [and 201(1A) ][read ][with ][Section ][195 ][of ][the]Income Tax [Act, ][1961 ][(briefly'the ][Act' ][hereinafter)'] 3. Petitioner [before ][us ][is a ][pharmaceutical ][comPany] incorporated [in ][the ][year ][1984 ][and ][is ][engaged ][in ][the ][business ][of]manufacture [and ][sale ][of ][pharmaceutical ][producs' ][It ][is ][also]in [research ][and ][development ][of ][dntg ][products']engaged Activitie:; ,,1 the petirioner al-e undertaken rhrorrgh three corebusini,sses ,,i, phamaceutical services and a(:1. ve ingredients,glob.rl ecr,' r. s .rrrd pr,,prietan.producrs.4' [t is rrite i] tiiat pciirioner haci entereci rr t< a 'I rademarkAssignrnenr [fgreeurenr ](IAA) with two foreign ( onrpanles zt,USB I'archi rr SAn Switz.crland ,[ISB (for shon Su,rzrrland) andUSB Iliophrr;na SpRI_, Belgium (for shor_ .t_.r,SB Belgium) forpurchase ci c'163in tradcmark for identicar tcrrrt rie; rncludingIndia. Ir. ; starecl rhar peririoner had parcl an i,,mounr ofRs.115,l4,3C,irIC.OC ro USB Switzerland antj a;r :rnount ofRs.244.16,1C:()0.00 ro USB Belgium during ,he financialyear 2a1'5-2i Ir> rercva.it to t'e assessmenr year 2)1G2a17 forpurchasc of t r- said rraclerr-rar-i<s. 4'l' r\ stur.')'opcr-arion uncler Section 13rA cr the Act wascanied ,rrLt ir rhe corpor.rre ofl'ice premises of tlr: per.itioner ati{yderah.rcl c,n 3).12.2)15 ro verify Tax l)eciucr.i :rr Sor-rrce(1DS) li,rbijit, :l-rhe peritioner with re.specr ro pa\an,,nrs made byit ro LSII Sr r:zerlarrd .rnrl USB Belgium. Durilr. rlLc suley I1 operation, it was [found ][that petitioner ][had ][not deducted'IDS ][on]the remittances made by it [during the financial ][year ][2075-2016 ][to]the two foreign companies. [Pursuant ][to ][the ][survey' petitioner]made its submission [and also ][filed ][the trademark ][agreemenrs ][with]respondent No.1 on 04.01.2016 [and07.01.2016.] 4.2. On 20.01.2016, [respondent ][No.l' ][initiated ][proceedings]under Section [201(1)/(1A) ][of ][the ][Act ][by ][issuing a ][notice ][to ][the]petitioner to show [cause ][as ][to ][why it ][should ][not ][be ][construed ][to]be an assessee in [default ][for ][failure ][to ][deduct ][TDS on ][payments]made by it to the two [foreign companies. ][It ][is submitted ][that ][in]response to the show [cause ][notice' ]Petitioner [had ][submitted ][reply]on 11.02.2016 and [also ][made ][cenain ][other ][explanations']Petitioner contended [that ][palT ][nents ][made ][to ][the ][two ][foreign]companies [were ][not ][taxable ][in ][India. ][Therefore, there ][was ][no]question of deducting [any ] [thereon. ][In ][such circums[ances']petitioner cannot [be ][treated ][to ][be an ][assessee ][in ][default']Therefore,, provisions [of ][Section 195 ][of ][the ][Act ][were ][not]attracted ( ( 5. r\ccor :Jing to rhr- pctirioner, ir was clllv on C3 10.201g, irbec,rnl: rr\\ u-l that thc tu,o foreign con4:,anies had filedapplicario'rs l;efore the Authoritv for Ad..ance Jitrling (briefry'AAR' h.".; r.lt...\ -^-l-:--^ ^ .--l:-- )!L ^rrr5 d r uutrB oIl tn-l .r tat{ llaDltlty , , [.!.]oI thePa)''rlr('nts [m ][,rt: ][to ]the,r .n account of transrer.f t] .e t:adcrnarls.Petiriorrer br,rrght this facr ro the norice o[ respon:len tNc>.I uidcIener d:rte<l ( 8.10.2018 and requesred respondenr \ t.1 to keep inabel.ance thc Proceedings initiated against it undr:r liection 201 ofthe Act. Perrrr>ner had also raised an objection rs ro linntation2.a., iniri;rtion,rJ proceedings uas bared byli mrarir r arLd that thereasonable p [,riocl ]for passing an order unde r Se:c.j,,n .lO1 of theAct had Iapsr ,1. 6. r\lter- (rrring the nratter, responder,t Nk,.. passccl theimpugrr<'d tr {,:r clated 14.12.201g dcclaring lhat sir:ce pcririonerd.id nor declu, r TDS as r-equired under Section 195 r,f t:re Act onthe tanble p; yllcnts mrrdc to rhe two foreign c()rnl )an.cs duringthe fin,rrrci;ri t,nr 2C15-2a16, it is decrned t.r lrr. a r ar;scssce indefault unie Section 201(1) o[ the A,:t. .rrdvr:ning ro ( Section 201(1AXD of the Act, [respondent ]No.1 [held ]that [as no]tax was deducted at source by the petitioner, [interest ][would ][have]to be levied @ lo/o for the period for [which ][the ][tax deduction ][was]not made. Accordingly, the total tax payable by [the ][petitioner]after adding the interest [was ]quantified [at ][Rs.55,55,18,964.00.] It is stated that consequent upon is stated that consequent upon that consequent upon consequent upon upon [[passing ]]of [[the ][impugned]][[impugned]] 7It is stated that consequent upon is stated that consequent upon that consequent upon consequent upon upon [[passing ]]of [[the ][impugned]][[impugned]]order, Additional C-ommissioner of [Income ][Tax ][(International]Taxation), Hlderabad initiated penalty [proceedings ][under]Secdon 27lCof the Act [uide ][show ][catse ][notice ][dated2l.l2.20l8-] 8. It is in the above [circumstances ][that the ][writ ][petition ][came]to be filed seeking the [relief ][as ][indicated ][above.] 8.1. This Court [uitle ]order [dared ][15.02.2019 ][noted ][that ][two]important issues arise for [consideration ][in ][the ][writ ][proceedings;]fintly, u4rether the period of [limitation ][stipulated ][in]Section 201(3) of the [Act ][would ][apply ][to ][the ][petitioner ][especially]when the same uses the expression ['a ][person ][resident ][in ][India'; ][)]and secondly, the impact of [double ][hxation ][avoidance] agreeme,t. I. the mea.wlrile, respondent l.Io.1 [.,v:rs ]directed notto take an'y' < r>r:rcive action against the petitic,ner. 9. It u.ru Irereafter that respondent Nc.1 has lileC coLurter_:rf[i,1.',..';r r,. ,.,!! r!,, dr arr l'r((rr(i\LiiUi) ." ^,. ;,.,--!-......-- ---r:- .' appiiC;tLt()1 . Iy,.111,, | [- ]r i.t\.r\tl.j^ N,of 2019 [or" ar:aringthe interirnorderdatcd $.AZ2i)19.10. In hjs vrcate peridon -clrm- counrcr-ailir-Li,it. respondenrNo.1 has ;rt :lre ourset quesrioned the main_ainabiltv,tf the writpetitior. lt ; submitted that asainst the in-rtuqrLid or,ler, appeallies befort t rc (bmnissioner o[ Income Tax (p.p rcrls) (briefly'Ol'(A ' lLe r :irafter) under Section 2a6A(1)(ha) oi tl-e Act. Ifthe petrtion< r- .ontinues to remain aggr.ieve,J [v rr:y clecision ofCIT(A), it r ray prefer further appeal bcfc,re rle In:onrc TaxAppellate I ribunal (briefly 'the Tribunal ht:r,:irraher) underSection 251 of the Act and cven Lhercafrer ;f hc petitionercontinLles tr, remain aggrieved, an apperl rv,rt kl lie on asubstantial q rcsrion of law before the jurisrlicr.ir> ral I figh Coun\unde r Sec:ic n 26AA o[ the Act. 'Iherelor"i:, o r L]t point of l \ alternative remedy, respondent No.1 seek dismissal of the writPetltlon. 10.1. fu regards the issue of limitation raised bythe petitioner, it l \ alternative remedy, respondent No.1 seek dismissal of the writPetltlon. 10.1. fu regards the issue of limitation raised bythe petitioner, it is stated that initially no time limit was prescribed by the statutefor concluding the proceedings under Section 201 of the Act.Sub-section (3) to Section 201 of the Act was inserted by Finance(No.2) Act, 2009 w.e.,f.,01.04.2010 providing the time limit in caseof payrnent to persons resident in India, which [was ][four ]pars. Itis stated that the notes on clauses attached to the Financ. [(Itfo.2)]Bill, 2009 also clearly reflects the legislative intent that no timeIimit is sought to be prescribed where the recipient is a [non-]resident as it may not be administratively possible to [recover ][the]tax from a non-resident. 10.2. Vide the Finance Act, 2012, the period of four [years]respect of resident Indians was replaced by six yean. ln ) 10.3. Vidr the Finance (No.2) Act,2014, Section [201(3) ]of [the ][J] Act was funher amended w.e.l., 01.10.2014 [and as ][per ][the] amended [)r( vjsion, tinre lirnit of seven years has l>r :n prescribedfor passing :n order undcr Section 201(1) ir. thc ,:r;r, r>f residcntIndi:rns.for passing :n order undcr Section 201(1) ir. thc ,:r;r, r>f residcntIndi:rns. 10 4 I Inv;e' c-, no linre limir r.ns !-i.red f rr i119 nn ,-. r-<ler1-,3s, undcr Sectic;r 201(1) of the Act in the case ,,1 ron-rcsidenrs.Thus, lcsisla u,re has deenred it prudent not to li;: ,ny time limitfor passing c l.'rn order under Section 201(1) of th: \ct in case ofnon- resident [. ].1-,3s, undcr Sectic;r 201(1) of the Act in the case ,,1 ron-rcsidenrs.Thus, lcsisla u,re has deenred it prudent not to li;: ,ny time limitfor passing c l.'rn order under Section 201(1) of th: \ct in case ofnon- resident [. ]. 10.5. [nsofa .he prescnt case is concemed, tht, s u.!,e \ opcrationrvas carrierJ ( )u: on 3AJ2.2AL5 and show cairse n()t.ie ,ras issuedon 20.01.201rr. fltimarely, ordcr utder Scct;on ,l{)1,1) oi the Actcamc 1o b, passed on 14.12.2018 2.r., within three vearc.The.ei.rc. ir :;uch circtrmstances, it cannot lre srri, l .ha. the orcrerpassed Lrnrls iisc1i.. 201(1) of the Act r.var; pas:c:l b:lrrteclly orwas bel,ond 'rrritation. 10.6. Thereafter, respondent No.l has also pleaded on the rneritsof the case in respect of which we are of the view that the samemay not be gone into at this stage. 11. In the hearing held on 13.12.2022, this C-oun had referred to its earlier order passed on 15.02.2019 and also the fact thatrespondent No.1 had filed interlocutory application for vacatingthe stay order. Flowever, this C-oun took the view that instead ofhearing the interlocutory application, it would be moreappropriate to hear the writ petition itself. It was thereafter thatthe writ petition was heard. 12. Mr. Deepak Chopra, Ieamed counsel for the petitioner at the outset submitted that objection of respondent No.1 regardingmaintainability of the writ petition on the ground of non-availingof altemative remedy provided under thestatute is whollyuntenable. He submits that petitioner has raised a fundamentalquestion as to whether the impugned order is barred bylimitation. Question of limitation goes to the root of the matter.It relates to [jurisdiction. ]Therefore, even if the statute provides j for altematirrr remedy, thar would be no gnrurrci t<r non-srrit thepetitioner [o ,.ssailing the impugned order ()n such iurisdictionalgrolrnd 12. Mr. Deepak Chopra, Ieamed counsel for the petitioner at the outset submitted that objection of respondent No.1 regardingmaintainability of the writ petition on the ground of non-availingof altemative remedy provided under thestatute is whollyuntenable. He submits that petitioner has raised a fundamentalquestion as to whether the impugned order is barred bylimitation. Question of limitation goes to the root of the matter.It relates to [jurisdiction. ]Therefore, even if the statute provides j for altematirrr remedy, thar would be no gnrurrci t<r non-srrit thepetitioner [o ,.ssailing the impugned order ()n such iurisdictionalgrolrnd 1)1drarru th,: altention of thrs C-ourt to the 1r11'1.i5ie115 o[Sections 4/)'t95 and 2al of the Act. He subrrit:; tl,at thoughthe lceislatur has not provided any limitatirn f,lr ,)i1s jing of anorder ur.rder S:ction 20i(1) of the Act insofar. n()n-rcsident isconcerrLed, r:.)netheless it is a settled propos;tion lh;rr even in rhcabsenc:c th<:r of, proceedings have to be iniriated arrd concludedborh n'irhi r ; r'.,esonable tirue.12.2. \\&i:r' initiation of the proceel :rqs r,rnderSection 2C1(l) of the Acr may be wrthin li-ruratic r, lc subrnitsthat thc irr4 ur;ned order passed is certain:y b,:.rc,nd linritationhaving reerrr l to the inrerpreration given tr suL-section (3) ofSection 2Cl r, tl-re Act by the Special Bench r>[ rire ['l ]r-ibLrnal at\ Munrbai in il4ahindra & Mahindra LimiterlDcpury ( Commissioner of lncome Taxl. Refening to the said dccision,leamed counsel submits that Special Bench has held that going bythe same logic as is evident from Section 153(2) of the Acqcompletion of proceedings under Section 201(1) of the Act that ispassing of the order under the said provision has to be within oneyear from the end of the financial year in which thoseproceedings under Section 201(1) were initiated. This view of theSpecial Bench of the Tribunal in Mahindra & MahindraLirnited (1 supra) has been accepted by the Bombay F[gh C-ounwhen the appeal filed bythe revenue against the said decision inDirector of lncome Tax (International Taxation)vMatrindra & Mahindra Limited2 came to be dismissed by theBombay Flgh C-ourt. FIe has also referred to a decision of theDelhi Flgh Cpurt in Bharti Airtel Limited v. Union of India3and submits that in the aforesaid decision, Delhi Flgh Coun [had]set aside the notices issued under Section [201(1) ]of the [Act]regarding non-deduction of TDS in respect of pay,ments [made ][to] ' [[2009] ][30 ][soT ][374 ][(MumbaixsB)]' l21l4) [48 ][taxmann.com ][150 ][(Bombay)]31ZOte1 zO taxmann.com 256 (Delhi)' l21l4) [48 ][taxmann.com ][150 ][(Bombay)]31ZOte1 zO taxmann.com 256 (Delhi) \I non-resiclent . llhose shol1, cause notices verc s31 as de on thegrourd that tosc. were issued beyrcnd a reasc,nabk l,cricd; lravingregard to the l'.rrch consequences, such a procee.dlrSl cntails.!2.-1. ['t- ]c:1rn( ,l ccunse I tl.re l-efore, subm.its thal tlre irq;ugnedorder h,rvin! l'cen passed on 14.12.2018, the shcu cause noricebcing issut:d ,rn 20.01.2C16, is well beyond tire nrsrrnable preriodand thercl.,rr, , .hc san'rc should be set aside.grourd that tosc. were issued beyrcnd a reasc,nabk l,cricd; lravingregard to the l'.rrch consequences, such a procee.dlrSl cntails.!2.-1. ['t- ]c:1rn( ,l ccunse I tl.re l-efore, subm.its thal tlre irq;ugnedorder h,rvin! l'cen passed on 14.12.2018, the shcu cause noricebcing issut:d ,rn 20.01.2C16, is well beyond tire nrsrrnable preriodand thercl.,rr, , .hc san'rc should be set aside. 13. P,r' ,,,,'1,i1, N.&. K.Mamata Choud;.ry, le,,mr.d SeniorStanding [(lo ]rr sel of the Income Ta.r Dep:rnrnel rcrresr.nringresponclent ['r,;.1 ]reiterated the preliminary <>bje,.tion rhar anorder prssec r nder Section 201(1) is an appealat,lt, order turderSection 246,'. of the Act before the C_omrnissi,cn,.r of IncomeTax (Appea st. Thus, petitioner has gor rn ,,de<1uatc andeffrcacir>r-r-s ;.r(.rxarive remedy. \(rthout av;rilinr; s,rch adcquateand eilica:r< Lr,; altemarive remedy, petitiorrer h,r.s straightauayapproa.he',,J h s Court under Article 226 of the rlrns_ituLion ofLrdirr arrd lu; sought lrtr qr-rashing of thc irnpugrre,C r,rdcr borhon the Poi.t , limitari.r-r as well as on meri,.. 'I'hLs. she s.Lr,ilts. I is impermissible and on this ground itself, the writ petition isliable rc be dismissed. 13.1. On the poinr of limitation, leamed Senior StandingC-ounsel has drawn the attention of the C-oun to Section 201(1)of the Act including the various amendments made therein. Shesubmits that initially no limitation was provided for [passing ][an]order under sub-section (1) of Section 201 of [the ]Act both [in]respect of residents and non-residents. Bythe [first ][amendment, ][a]limitation of two was introduced for [resident ][indian ][which])rears was subsequently enhanced to four yrars. [Thereafter, ][the]limitation was extended to six 1rears and finallyto [seven ][years. ][All]this u,{rile, Parliament consciously did [not ][provide ][for ][any]limitation insofar non-resident Indians are concerned. [This]clearly reflects the legislative intent that [there ][can ][be ][no ][limitation]insofar passing of an order under Section [201(1) ][of ][the Lct ][qua]non- residens is concemed 13.2. Adverting to the present [case, ][leamed Senior ][Standing]Counsel submis that the [impugned ][order ][has ][been ][passed ][within] io r-rr yers tr, nr initiation of proceedings un<ler Sec,ior 201(1) ofthe ,'\r:t ,rncl 1: rt is cerrainly within a reason;.blt: p:r.Lod. ln firct,it was passec irr a span ,rf tu,o 1earc nine mo rths f rr m :he end ofthc frnanciai [,.tar ]in whrch the transaction to,rk pl:.cr:. ln supportol her corLtc ri,ion, she has placed reliance .n a <le :ision of thisthe ,'\r:t ,rncl 1: rt is cerrainly within a reason;.blt: p:r.Lod. ln firct,it was passec irr a span ,rf tu,o 1earc nine mo rths f rr m :he end ofthc frnanciai [,.tar ]in whrch the transaction to,rk pl:.cr:. ln supportol her corLtc ri,ion, she has placed reliance .n a <le :ision of thisCo urt in []l t' v. U.B.Elcctronic Instrunrents ,l_inLiteda tocontencl tha by and large four years is treared ,s rhe period*.ithi. .,r'l-Lic L ar.ry penal action can be initiat,:cl ar]ainst theassessr:cs/,-.le ir Lonen. Since in that case, th. nor.i:e,s .rere issuedaftc-carly, :,,\'e, )ran those were interfere,l *etlr. Sl.e has also*.ithi. .,r'l-Lic L ar.ry penal action can be initiat,:cl ar]ainst theassessr:cs/,-.le ir Lonen. Since in that case, th. nor.i:e,s .rere issuedaftc-carly, :,,\'e, )ran those were interfere,l *etlr. Sl.e has alsoplaced :eli:r't'on rhe clecision of the punjab anc :laryana ts[ghC,oun in CI', r.. H.N{.11. Lirniteds and that <>l rhe CricurtaFtrgh [(burr ]ir Bhura Exports Ltd. v. [ncorne Tax Officer(TDS)'.C,oun in CI', r.. H.N{.11. Lirniteds and that <>l rhe CricurtaFtrgh [(burr ]ir Bhura Exports Ltd. v. [ncorne Tax Officer(TDS)'. 13.3' I ear.ru J standing c-ounsel has also porntecllr rr rhat thoughthe B.r.b;r' ligh C;urt had dismissed the zppe;rJ r:i the re'enueagai^st th., l,.cisio, oi the Special Bench oi th., Tiibu.al inn 371 flR l1.l ',t rclrra pradesh)[2012] [40 ][r;,/ ][g,Punlab ]& Harydna)' [zot+] es I [: ]5..8 rcal;ulta) Mahindra & Mahindra [(1 ]supra), that [was ]on [the ][ground ][that] no substantial question of law arose in that appeal. [But ][Bombay]F[gh Coun lrcpt open the question as to what can [be ][a]reasonable period for passing of an order under Section [201(1) ][of]the Act. She has also distinguished the [decision ][of ][the ][Delhi]F[gh Coun in Bharti Airtel Limited [(3 ]supra). 13.3' I ear.ru J standing c-ounsel has also porntecllr rr rhat thoughthe B.r.b;r' ligh C;urt had dismissed the zppe;rJ r:i the re'enueagai^st th., l,.cisio, oi the Special Bench oi th., Tiibu.al inn 371 flR l1.l ',t rclrra pradesh)[2012] [40 ][r;,/ ][g,Punlab ]& Harydna)' [zot+] es I [: ]5..8 rcal;ulta) Mahindra & Mahindra [(1 ]supra), that [was ]on [the ][ground ][that] no substantial question of law arose in that appeal. [But ][Bombay]F[gh Coun lrcpt open the question as to what can [be ][a]reasonable period for passing of an order under Section [201(1) ][of]the Act. She has also distinguished the [decision ][of ][the ][Delhi]F[gh Coun in Bharti Airtel Limited [(3 ]supra). 14.Submissions made by learned counsel [for ][the ][panies ][have]received the due corsideration of the Coun. 15. At the outset, we ruy advert to [some ][of ][the ][relevant]provisions of the Act having a bearing [on the ][/zi.] 16. Section 4 of the Act deals with [charge ][of ][income ][tax. ][fu] per sub-section (1) thereof, [where ][any ][Crntral ][Act ][enacts that]income tax shall be charged for any [assessment ]Far [at any ][rate ][or]rates, income tax at that [rate ]or [those ][rates ][shall ][be charyed ][for]that year in accordance with and [subject ][to ][the ][provisions](including provisions for the lery of additional [income tax) ][of ][the]Act in respect of the total [income ][of ][the previous ][year ][of ][every] pe6on. SL 5.section (2) clarilies that in resp,r( r c,f incomecharge ablc tr ,cier sub-section (1), income tax shatl b,: d:c{ucted atsource or p: rcl in aclvancc, u4rere it is so dedu<ril-,lc ,>r palableunder anv pr ,r is;on oi thc Act. 17. Sub-se tron (1) ol Scction 195 sals rllirt arry personrcsponsibl,: f r peying to a non-resident, not being a company, orto a l'oreign ()mpan% any inrerest (not bein,4 interersr reler.red toin Section 1t4LI) etc..) or any orher sum chargeal,le under theprovisic,ns o .he Acr (not being income chargeal.,le under thehcad's;rlarier ). shall ar rhe rinrc of credit of such income to rheaccorurt ot rl -, payee ()r-ar the tin.re of pa)rnent tlx,r.,of i, cash orbytl.re i;sue ,,1 a cheqLre ordraft orbyanyorher nrc,de whicheveris earlie'. dcc r,..t income tax there on at the rares in 1, ,rcr:. 17.1. \s pr-. :.ub-secrion (2) of Section 19:i, u,her.e the personresponsiblt, I rr payng lny such sum chargeable u.r<:er rhe Acr toa no^-n..si<.l.. rt considcrs that the whole of ;uch ;rrnr would notbc inc,rmi, :;rgcable ro tax in the case of the re,:ipierrt, he maymakc rrr ap; lit;ation in such fonn and mar]ne r t,r thc assessing ] officer, to determine in such rranner as nny be prescribed theappropriate proponion of such sum so chargeable and upon suchdetermination, tax shall be deducted under sub-section (1) onlyon that proportion of the sum u'hich is so chargeable. 18. Consequences of such non-deduction under Section 195(2) of the Act or such other provision is dealt with in Section 201 ofthe Act. 18.1. \Vhile dealing with Section 201 of the Act, it is necessary that we refer to the Section as it originally stood and also thechanges brought in by various amendments from time to time.Original Secdon 201 of the Act as it stood read as under: Consequences of failure to deduct or pay 201.(1) If any such penon and in the cases referred to inSection 194, the principal officer and the companyof [which ]heis the principal officer does not deduct or after deducting failsto pay the tax as required by or under this Act, he or it shall,wjthout prejudice to any other consequences which he or it/^ y ncrx, be deemed to be an assessee in default in respect ofthe tax: 1 \ Prori<kd l':lt no pena[y shail be chaqcd .rn<lcr !,:cticn 221fror-r-. strcl rerson, principal officer or compan / Lrnl:ss theIncomer-u [.: ]()tficcr is setisl:icd that such plrsorl (: - p incipaloffrcer ,rr ],mp"rrr. a-s the cxse may be, ha, r,il-[:l]v failed todeduct,rn, tax.Ir:r).the Consequences of failure to deduct or pay 201.(1) If any such penon and in the cases referred to inSection 194, the principal officer and the companyof [which ]heis the principal officer does not deduct or after deducting failsto pay the tax as required by or under this Act, he or it shall,wjthout prejudice to any other consequences which he or it/^ y ncrx, be deemed to be an assessee in default in respect ofthe tax: 1 \ Prori<kd l':lt no pena[y shail be chaqcd .rn<lcr !,:cticn 221fror-r-. strcl rerson, principal officer or compan / Lrnl:ss theIncomer-u [.: ]()tficcr is setisl:icd that such plrsorl (: - p incipaloffrcer ,rr ],mp"rrr. a-s the cxse may be, ha, r,il-[:l]v failed todeduct,rn, tax.Ir:r).the f.') \\4r,,:',. !1e !.!lt !!r. ,,,.,r I'o.,-l n.'i.l [.'. ], ..1 ,lro,. ,r i"^,-,,." deducted. ir shall be ,r charge upon all the as;ets ,r r he rerson,ot'the cor U)i1ny, as the case may be, refentrl t<> ir. :;ub-secti<>n(1). 18.2. ['fhu;. ]ilrb-section (1) of Section 2a1 ct tlrr: \ct providedthat il the re [,,,rrs ]fai[Lre to deduct tax at sour]e or al ter deductingnot pa)-rng tl ,- tax, the person concemed as well .s the companyincludine i,s ,rincipal officer would be deenred tc l.e an assesseein dcfarrlt in n: spect of the tax. As per the pr<xis,> rJrerel.o, nopenaltv uc,til l bc charged l-r-,om such person, princr ral officer orcomPar.v trn rt-\s the Incopte Tax Officer wirs satrslied that suchpe6or1 or pr rrrcipal oliicer or company as the cas(, may be hadqllifLrlir fa le ro deduct or palr1[6 12L. 18.3.S,-rb-se rjon (2) thercof provided tlrat whr:re tle tax had (not been p,rL,: rtfter it u,as deducted, it would be :L :l.arge upon all (not been p,rL,: rtfter it u,as deducted, it would be :L :l.arge upon all the assets of the person or the [comPany ][as ][the ][case ][may ][be,]referred to in sub-section [(1).] 18.4. Thus, we find that no [limitadon ][was ][prescribed ][for ][passing] an order under sub-section [(1) ]of [Section ][201 ][of ][the ][Act ][and ][also]an order under the proviso to [sub-section (1) ][of ][Section ][201 ][of]the Act. 18.5. By the Finance [(No.2) ][Act, ][2009, ][t4rich ][came ][intc ][force] w.eJ, 0I.04.2010, sub-sections [(3) ][and (+) ][were ][insened ][in]Section 2Ol of the Act [after ][sub-section ][(Z). ][Sub-sections ][(3)]and (a) as were insened [read ][as ][follows:] (3) No or,Jer shall be made under [sub-section ][(1) ][deeming ][a]to be an assessee [in ][default ][for ][failure ][to ][deduct ][the]to be an assessee [in ][default ][for ][failure ][to ][deduct ][the]person whole or any part of the [tax ][from ][a ][person resident ][in India, ][at]any tirne after dre [expiry ][of]whole or any part of the [tax ][from ][a ][person resident ][in India, ][at]any tirne after dre [expiry ][of] (f wo pan from the end of [the ][financial ][year ][in which]the statement is filed in a [case ][vrhere ][the ][statement]referred to in Section [200 ][has ][been ][filed;]the statement is filed in a [case ][vrhere ][the ][statement]referred to in Section [200 ][has ][been ][filed;] (if four years from the end of [the ][financial year ][in]which pay,rnent is made or [credit is ][given, ][in ][any ][other]case:which pay,rnent is made or [credit is ][given, ][in ][any ][other]case: \ ])ro,.irlt.d rlrlr such order for ir financial )cil[ (]crlr)rcn jing on<lr btforr' irc 1" dav of Apni, 2OO7 tnal, be passe,i ,rr an).rirneou r:r. bclr r. thc J1', dl.of tr4arch, 2011.(a) Ihr. jir-:)visions ol sub-clause (if of r,ub_se:t on (3) ofS<-curtlt 1; i rnd o[ explanation 1 to Section i:1] ,;lLa l. s,r iar as<lr btforr' irc 1" dav of Apni, 2OO7 tnal, be passe,i ,rr an).rirneou r:r. bclr r. thc J1', dl.of tr4arch, 2011.(a) Ihr. jir-:)visions ol sub-clause (if of r,ub_se:t on (3) ofS<-curtlt 1; i rnd o[ explanation 1 to Section i:1] ,;lLa l. s,r iar asnrr1v. .rDr)1. ro rlre tir.ne Ln:it prescribed in sul_secr.i,;i; (.3). \ ])ro,.irlt.d rlrlr such order for ir financial )cil[ (]crlr)rcn jing on<lr btforr' irc 1" dav of Apni, 2OO7 tnal, be passe,i ,rr an).rirneou r:r. bclr r. thc J1', dl.of tr4arch, 2011.(a) Ihr. jir-:)visions ol sub-clause (if of r,ub_se:t on (3) ofS<-curtlt 1; i rnd o[ explanation 1 to Section i:1] ,;lLa l. s,r iar as<lr btforr' irc 1" dav of Apni, 2OO7 tnal, be passe,i ,rr an).rirneou r:r. bclr r. thc J1', dl.of tr4arch, 2011.(a) Ihr. jir-:)visions ol sub-clause (if of r,ub_se:t on (3) ofS<-curtlt 1; i rnd o[ explanation 1 to Section i:1] ,;lLa l. s,r iar asnrr1v. .rDr)1. ro rlre tir.ne Ln:it prescribed in sul_secr.i,;i; (.3). 18.6.'['htrs;, [.,.c ]find rhar sub-section (3) of Srctior 2,)1,,if the Actintrod.ecd i< r rhe first time rimitation in passing rr, orcer undersub-section ( ) cf Section 201 of the Act in nrspecr <rf arr assesseein defaLLh for l.:rilure to deduct the tax from r pen c 1 r,:sident inInc'lia. I,:r r rle where sratement has been fik:d, the limitation. prescrit,,d x,:l two lears from the end of the iinant:irrl 1.r:ar:r'd inan1, othc'r c.isr , ,he lirnitation prescribed was [otu. .e ,us from theend oi t re lir ancial lear- in rvhich payment ffas nr:Ce or credit\1AS glvL.n. 18 2' sub-st:cr ron (4) o1- Secrion 2ar of the Act c ariiiecl thatpr-ovisiorrs c,l [,,ircrion ]153(3)(ii) of the Act an,1 Ir>:Pl:.narion 1 toSectior.r 153 ol Llre Act shall so far as mayapplytr:, rlre tirne lirnitprcscribcrl irr s rt:-secrion (3) thertof. 18.8. In the memorandum preceding enactment of Finance (I.{o.2) Act 2009,it v/as mentioned that while time limit has beenintroduced for passing an order under Section 201(1) of the Act,no time limit has been prescribed for passing an order under sub-section (1) of Section 201, of the Act where amongst others, thedeductee is a non-resident as it may not be administrativelypossible to recover the tax from a non-resident. This has alsobeen clarified by Grcular No.5 of 2010 issued by th. CrntralBoard of Direct Taxes (CBDT). 18.9. fu already noticed above, the limitation [was ]thereafrcr extended in respect of resident Indians to six years [and ]finallytoseven )€a$. Sub-sections (3) and [(4) ]of Section [201 ]of [the ][Act ][as]those provisions srand todayread as follows: (3) No order shall be made under sub-section [(1) ]deeming [a]person to be an assessee in default for [failure ]to [deduct ][the]vzhole or any part of the tax from [a ]penon [resident ][in India, ][at]any time after the expiry of seven [years ][from ][the ][end ][of ][the]financial year in which palanent is made or credit [is given.] (a) Ihe 1 r'visions of sub-clause (ii) oi s ub-se :tion (3) ofsccr-i,rn I5' :rnd ol' E xplanarion I to reeUon 1J-l s r:.ll so Iar asrlar,.rpplv o rhe rirne limir prescribed h sub sectic n (J), 18.1C. ['lhrrs ]a; per sub-section (3) of Secrion 20i of tlre Acr, nourricL ^--l^.- sjr.iii [.l ]- [l- ]ir( r ._ 1 r.lde rurdcr, ls ub-scction (i) cle<.mrng . lre :Soll ro bean asscsse(, i r ,lefauit for failure to deduct the u,h.le or anypartof the t:rx i:r<:-a percorl resident inlndia at :rn\r:irrL. al'terexpiryol seven 1e,r s from the end of the financi,rl lrar in which thepayrent is rr or credit is given.'t,-le 18.11. Sinr: ,ul>section (4) of Section 2Ol ol tlr, Acr refers toSection 151 i the Act, it would be apposite tc, bri..fl), deal withthe said p^r' ision. Secrion 151 of rhe Act rleals w th time rimitfor conrpl<:Li ,n o[ assessnrent, reassessment and ft:ornputation.Sub-seciion l') thereof deals with a situatiol 1,hir, a remand is,-iad.' i.llo*,,f; a. order by the Income Ta;t Apire latt: T'ibunalr-rnder Sccr.i<; t 254 cti the Act or by the (brnnu:;sioner underSectiorrs 2(:1 t 264 of the Act. In sucl.r a c;Lse. l're:;h assessrnenruoulc{ lr,rr': ,,r bc made by thc assessing olf cer- be1 cre expiry olnine nr,rnths [jrrom ]thc end of the financial )rir- n ,r,hic[r the )) 18.11. Sinr: ,ul>section (4) of Section 2Ol ol tlr, Acr refers toSection 151 i the Act, it would be apposite tc, bri..fl), deal withthe said p^r' ision. Secrion 151 of rhe Act rleals w th time rimitfor conrpl<:Li ,n o[ assessnrent, reassessment and ft:ornputation.Sub-seciion l') thereof deals with a situatiol 1,hir, a remand is,-iad.' i.llo*,,f; a. order by the Income Ta;t Apire latt: T'ibunalr-rnder Sccr.i<; t 254 cti the Act or by the (brnnu:;sioner underSectiorrs 2(:1 t 264 of the Act. In sucl.r a c;Lse. l're:;h assessrnenruoulc{ lr,rr': ,,r bc made by thc assessing olf cer- be1 cre expiry olnine nr,rnths [jrrom ]thc end of the financial )rir- n ,r,hic[r the )) above orders were passed. [Before ][proceeding ][funher, ][we ][may]mention that Section [153 ]of [the ][Act ][as ][noticed ][above ][deals ][with]the tirne limit for completion [of ][assessment, reassessment ][and ][re-]computation. [Therefore, ][the ][intent ][behind ][sub-section ][(4) of]Section 201 of the Act [is ][that ][in ][the event ][of ][interference ][with ][an]order passed under [sub-section (1) ][of ][Section ][201 ][of ][the ][Act ][by]the appellate authorities, [the time ][limit ][prescribed ][for ][completion]of assessment [etc., ]under [Section 153 ][of ][the ][Act ][would ][be]applicable to an [order ][to ][be ][passed ][under ][Section 201(1) ][r/w ][sub-]section 3 of Section [201 ][of ][the ][Act.] lg. Before proceeding [further, ][a ][brief ][reference ][to] sub-section (1A) of [Section 2Ol ][of ][the ][Act ][would ][be ][in ][order']The said provision [fastens ][liability ][on ][the ][assessee ][in ][default to]payinterest for [failure ][to ][deduct ][or ]Paythe [TDS'] 20. Fhving said [so, we may ][now ][deal ][with ][the ][decisions ][cited ][at] the bar. Insofar [the ][decision ][of ][this ][C-ourt ][in ] [v']U.B.Electronic [lnstruments ][Ltd ][(4 ][supra) ][is ][concemed' ][this ]]\C-ourt referred to [various ][provisions ][of ][the ][Act ][including ]['] lg. Before proceeding [further, ][a ][brief ][reference ][to] sub-section (1A) of [Section 2Ol ][of ][the ][Act ][would ][be ][in ][order']The said provision [fastens ][liability ][on ][the ][assessee ][in ][default to]payinterest for [failure ][to ][deduct ][or ]Paythe [TDS'] 20. Fhving said [so, we may ][now ][deal ][with ][the ][decisions ][cited ][at] the bar. Insofar [the ][decision ][of ][this ][C-ourt ][in ] [v']U.B.Electronic [lnstruments ][Ltd ][(4 ][supra) ][is ][concemed' ][this ]]\C-ourt referred to [various ][provisions ][of ][the ][Act ][including ]['] Secrions 14i . r49 ard 263 and thereafter c,bsenc.l tlrat by andlartc [j.,',ul ]v rrrs is trcated as thc period withirr v,l- ich anr,. pcnalaction jar [-. initiated agair-rst an assessee ]s a (r.,nsequence of'o.-dc.{ucri',rr [of ][TDS. ]['rhis ][Coun funher ][obse:rr..,d ][rhat ]failureto i.itiate stt ,:; 'ri,'irhi, such pedod would di;aL,kr rlre depanmentto prcrr'eerl [.gainst ]the assessee. With ea,:h l.,as:;ing year, thelartc [j.,',ul ]v rrrs is trcated as thc period withirr v,l- ich anr,. pcnalaction jar [-. initiated agair-rst an assessee ]s a (r.,nsequence of'o.-dc.{ucri',rr [of ][TDS. ]['rhis ][Coun funher ][obse:rr..,d ][rhat ]failureto i.itiate stt ,:; 'ri,'irhi, such pedod would di;aL,kr rlre depanmentto prcrr'eerl [.gainst ]the assessee. With ea,:h l.,as:;ing year, theassessc(. is r-r ,lrrired to adjust his or her own aflar,rs n such a ivaythat tlrt' art.,,r _y rLndenalen by it goes on smo,)t y. In caseliabilitv for- r Lir preceding one or r'wo years is f.rst,:ned, there canbe sc,rpe l,,r nraking adjtstments in tht, suLs, qu,:nt years.I {oue'r.r, ii' r [;airly ]lorg gap inrervenes, it [,econre ,, dilficrrlt forn'raking suc: adjmtmenrs panicularly when rhr, :rctivity isthat tlrt' art.,,r _y rLndenalen by it goes on smo,)t y. In caseliabilitv for- r Lir preceding one or r'wo years is f.rst,:ned, there canbe sc,rpe l,,r nraking adjtstments in tht, suLs, qu,:nt years.I {oue'r.r, ii' r [;airly ]lorg gap inrervenes, it [,econre ,, dilficrrlt forn'raking suc: adjmtmenrs panicularly when rhr, :rctivity iscomrne rciai n nature. In that case, the asse.sment )earsu.ert 1989..)( ['. ]1gg0_91 and 1gg1_g2. Ir was nea.l,. s(ven )ears)earsu.ert 1989..)( ['. ]1gg0_91 and 1gg1_g2. Ir was nea.l,. s(ven )earsther-r,:rlt,rr rl: Lr the in-rpugned notices wer,-, jssrLc.,l. In suchcrrcurnsr,ancr: ;, this C_oLrrt concur:red with thc l,ir:.i. takcn L_.,y thel'ribLrnal an( ,rns$ere(l arnongst others, thl: <1uts.ion that tl_reinconre [-lrrr ],,1,ppellarc Tnbunal was justif ed irL rpp,lying thetheorv o1- r'i.;onable period for passing the ,rrder underl'ribLrnal an( ,rns$ere(l arnongst others, thl: <1uts.ion that tl_reinconre [-lrrr ],,1,ppellarc Tnbunal was justif ed irL rpp,lying thetheorv o1- r'i.;onable period for passing the ,rrder under Section 201(1A) of the Act in the [absence ][of ][time ][limit ][specilicd]in the Act. 20.1. \(e may mention that in [the ][said ][case, ][when the impugned]notices were issued or the order [under ][Section 201(1) ][of ][the ][Act]was passed bythe assessing officer [on3l.O3.l999' ][the statute ][did]not provide for any limitation [either ][in ][respect ][of ][a ][resident]Indian or a non-resident [Indian.] 21. In CIT V. H.M.T. Limited [(5 ][supra), ][which ][was ][an]appeal bythe revenue [under ][Section ][26OLof ][the ][Act, ][one ][of ][the]substantial questions of [law ][before ][the ][Punjab ][and ][Fhryrana ][Flgh]C-oun was whether on [the ][facts ][and ][in ][the ][circumstances ][of ][the]case, Tribunal had [erred ][in ][law ][in ][allowing ][the ][appeal ][of ][the]assessee by holding that [four ])ears [was ][a ][reasonable ][period ][to]issue show cause notice [under Section ][2OL ][of ][the ][Act ][by ][the]assessing officer to the [assessee ][though ][no ][such ][limitation ][was]under Section [2Ol ][of ][the ][Act. ][This ][appeal ][pertained ][to]provided the financial years [1994-95 ]to [1997-98 ][and ][the ][order ][under] 21. In CIT V. H.M.T. Limited [(5 ][supra), ][which ][was ][an]appeal bythe revenue [under ][Section ][26OLof ][the ][Act, ][one ][of ][the]substantial questions of [law ][before ][the ][Punjab ][and ][Fhryrana ][Flgh]C-oun was whether on [the ][facts ][and ][in ][the ][circumstances ][of ][the]case, Tribunal had [erred ][in ][law ][in ][allowing ][the ][appeal ][of ][the]assessee by holding that [four ])ears [was ][a ][reasonable ][period ][to]issue show cause notice [under Section ][2OL ][of ][the ][Act ][by ][the]assessing officer to the [assessee ][though ][no ][such ][limitation ][was]under Section [2Ol ][of ][the ][Act. ][This ][appeal ][pertained ][to]provided the financial years [1994-95 ]to [1997-98 ][and ][the ][order ][under] Scction 2Cl 1\/(,lA) ol the Act was passed on.2r). 2.lt0O5 u,henthc star.rre rj I not pror,ide lor an1.lirni1x1i611. 21.1. [rr rht::)bove context, Punjab and I{ary:lr:. High Counfo llou,", l Times l-ir.i r,,l r.. [Jnion of India/ wherein Supr,:r,c (]un heldthlt [qhi,n ]tl r Legislature has not considered ir rl)prcprirrre ropre scnL,.., lirr trLtion, it cannot be read in srrch a 1. ror.ision andbased t rcre,- rr, answercd the above questi()n in [;r'our of therc\re ,Lre [r' h ri,1i,g that it couid not be conc luclec r r;rt tire or<]erpasscd irr. rlrt :rssessing officcr under Section 20I(1) an1201(1A)of the ;\ct w rs liable to be annulled on the ,lround ol. del,rv andlaches. 22' Ins.l;rr the decisi.n of rhe Carcutta High (orut in BrruraExports Lirr rirccl (6 supra) is concemed, r.hat 1rc;1xlrs ro theasscssnr(,nl_ vr:. 2a02-2a0j. In that case, ass(,ssee r:,;r,ir.ed noticedatcd 0(.04.1 lC6 issued bythe Income Tax Jf[ic,:r allt:qing irtt,ttrli,t ll,,t.rsscs (,1 had peid interest on loan brrt haci :xrt dedLrcted' 199s 5c rjBt TDS from the paynents made to the three companies for thefinancial yar200l-02 relevant to the assessment year 2002-03. Itv/as thereafter that assessing officer passed an orderdated 07.03.2008 treating the assessee to be in default [and]demanded a sum of Rs.21,64,471.00 as the tax payable. [In]appeal, both the appellate authorities [affirmed the order ][of ][the]assessing officer though the Tribunal [reduced ][the ][amount ][of]default. 22.1. Question before the Glcutta Flgh [Clurt ][was ][whether ][the]assessing officer [was ]competent to [initiate ][proceedings under]Section 201,(l)/(l$) of the Act in [the ][year ][2007 ][for ][the]assessment year 2002-03. Calcutta Flgh C-,oun C-,oun held that [[the ][time ][limit ][prescribed ][in]][[time ][limit ][prescribed ][in]][[limit ][prescribed ][in]][[prescribed ][in]][[in]] 22.2.Calcutta Flgh C-,oun C-,oun held that [[the ][time ][limit ][prescribed ][in]][[time ][limit ][prescribed ][in]][[limit ][prescribed ][in]][[prescribed ][in]][[in]]Section 1,49 of the Act for taking [action under ][Section ][147]thereof 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 derrrol r; deduct r.ax on interest while rnaliin,; p,ryment ofintcrest in vir lrrtion of Section 194A of the A:t. 22.3. t-..rlc.rr. r i{igh (-irurt ftrnher posed th:: quesr on rhat if in.rnr' ''''l 5" [.'i',.,', ][,r1 ]['r ]re rlra.,. r\ ir ,c .^ ,.,o^^L,t i iL., ir-iivu (ji iiiiiiiaiiu-i I l;,-;..+:^^ ..-,^^.iL.t i-(.s_-ilD(,Li ioi-r^--raking rrcri'rr. r ,der rh,rt statute, whether such actir), should betakerr u,irhin rrasonable pe riod ? 22.4. [( ]hlcu t:L ftrgh (bun opined that if nc, perir>cl of limitationis prescribt:.1 u.tder a st,ttute for taking actio;t lLnde-. it and at thesamc ti,ne rl e lintitation Ao, 1963 does t.ror rt1.ly to such astatLrte, tlte rr: c;rnnot b. any prt,scription of ; peri.cl of limitationfor takirrg ''t on rLndcr the said sratute un[es:; thcre is anycontran' iutt, tjon expt'ssed thurein. 22.3. t-..rlc.rr. r i{igh (-irurt ftrnher posed th:: quesr on rhat if in.rnr' ''''l 5" [.'i',.,', ][,r1 ]['r ]re rlra.,. r\ ir ,c .^ ,.,o^^L,t i iL., ir-iivu (ji iiiiiiiaiiu-i I l;,-;..+:^^ ..-,^^.iL.t i-(.s_-ilD(,Li ioi-r^--raking rrcri'rr. r ,der rh,rt statute, whether such actir), should betakerr u,irhin rrasonable pe riod ? 22.4. [( ]hlcu t:L ftrgh (bun opined that if nc, perir>cl of limitationis prescribt:.1 u.tder a st,ttute for taking actio;t lLnde-. it and at thesamc ti,ne rl e lintitation Ao, 1963 does t.ror rt1.ly to such astatLrte, tlte rr: c;rnnot b. any prt,scription of ; peri.cl of limitationfor takirrg ''t on rLndcr the said sratute un[es:; thcre is anycontran' iutt, tjon expt'ssed thurein. 23. ['I'his ]b irLss Lrs ro the decision of the lipecll Bench ol-the'I'ribtLr,al i' I I:rhincrra & Mahindra Linritr:d (r srrpra). Special1 Bench r!as ,)l rhe view rhar even thoui;h n,r liniltation is\prescdbecl r. r,.ler- Scction 201(1) of the Act, n:r,eftrelcss rhe order thereunder would have to be passed within a reasonableperiod. 23.1. Ye rnay mention that in that case, the assessment year under consideration was 1998-99 and the order [under]Section 201(1) of the Act was passed on 30.03.1999. 23.2. It was submitted before the Tribunal that [a ][period ]of [four]yean from the end of the [relevant ][financial ]1rear [would ][be]reasonable for initiation of proceedings [as ][well ][as ][passing ][of ][the]order under Section 201(1) of the Act. [Tribunal ][referred to]different provisions of the Act, such [as, ][Sections ][147, ][148, ][1'49]and l53Q) and thereafter concluded that [completion ][of]proceedings under Section 201(1) of [the ][A