Reasonable-time limitation can bar tax-deduction proceedings against non-resident deductees when no statutory period exists.

The article addresses whether proceedings under the Income-tax Act for failure to deduct or remit tax can be time-barred for non-resident deductees by applying a judicially recognised "reasonable time" limitation where Parliament has not prescribed a statutory period. It explains that the governing provisions lack an express time limit for non-residents, outlines the legal principle that a reasonable-time limitation may operate as a bar, and confirms that reliance on the Delhi High Court precedent in Bharti Airtel Ltd. is treated as appropriate; the practical effect is that such proceedings may be barred on limitation grounds in appropriate cases.

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Issues: Whether orders passed under section 201 of the Income-tax Act are barred by limitation for non-resident deductees by applying a "reasonable time limit" and whether reliance on the Delhi High Court decision in Bharti Airtel Ltd. is permissible.

Analysis: The question concerns applicability of a limitation bar to proceedings under section 201 where Parliament has not prescribed a specific time limit for non-residents, and whether a judicially recognised "reasonable time limit" may operate as such a bar. The legal framework involves the parameters of section 201 and related sub-sections, absence of a statutory time limit for non-resident deductees, and authoritative precedent establishing limitation by reference to a reasonable time period. The earlier decision of the High Court of Delhi in Bharti Airtel Ltd. is treated as directly on point and has been followed in subsequent orders addressing identical legal questions.

Conclusion: The substantial question is answered in favour of the assessee and against the revenue: proceedings and orders under section 201 are barred by limitation in the facts and law discussed, and the precedent relied upon is applicable; therefore the appeal is dismissed.

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