TaxTMI 
TaxTMI 
2011 (8) TMI 449
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....e was engaged in the business of importing and dealing in pulses and edible oil. b) For the Assessment Year 2002-03, relevant to the previous year ending on March 31, 2002, the appellant filed a return of income disclosing an income of Rs.4,66,844/- and ultimately the assessment was completed under Section 143(3) of the Act by an order dated March 27, 2006 and the net tax and the interest payable by the appellant was determined at Rs. 20,607/-. c) In the month of April, 2006 the appellant received a notice dated April 6, 2006 issued by the Income tax officer, Ward 5(3) alleging, inter alia, that it appeared from record that the appellant paid interest on loan but had not deducted tax at source from three companies, viz. 1) M/s. MMTC Ltd, 2) M/s. P. G. Foils Ltd. and 3) M/s. Globe International Ltd for the Financial Year 2001-02 relevant to the Assessment Year 2002- 03. The appellant was, thus, directed to appear before the said Income tax officer with the relevant documents for non-deduction of tax at the source. d) The Appellant by a letter through its learned Advocate replied to the said notice stating that the appellant paid interest of Rs.2,96,390/....
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....pted the reasons assigned by the CIT(A) on the question whether the amount paid by the appellant to the Globe International came within the purview of Section 194A of the Act but reduced the amount of default from Rs.60,54,301/- to Rs.49,20,681/- as according to the Tribunal the appellant was really in default of that amount in deducting the TDS. The Tribunal, accordingly, directed the Assessing Officer to recompute the tax on that amount and to calculate the consequential interest under Section 201(1A). The Tribunal, however, did not deal with the question of the period of limitation raised by the appellant. i) Against the aforesaid order passed by the Tribunal this appeal has been filed. A Division Bench of this Court at the time of admission of this appeal formulated the following questions of law for determination: "(I) Whether the learned Tribunal below committed substantial error of law in not deciding the question raised by the appellant as to whether the Assessing Officer was competent to initiate proceeding under Section 201(1)/201(1A) of the Income Tax in the year 2007 for the assessment year 2002-03. (II) Whether the learned Tribun....
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....he following decisions: 1) State of Punjab vs. Bhatinda District Co-operative Milk Procucers Union Ltd reported in (2007) 11 SCC 363; 2) Commissioner of Income tax vs. Kelvinator of India Ltd reported in (2010) 320 ITR 561 (SC)= (2010) 2 SCC 723; 3) Commissioner of Income tax vs. NHK Japan Broadcasting Corporation reported in (2008) 305 ITR 137 (Delhi). Mr. Nizamuddin, the learned Advocate appearing on behalf of the Revenue, has, on the other hand, opposed the aforesaid contentions of Ms. Roy Chowdhury and has contended that as the legislature at the relevant point of time had withdrawn the provisions of the period of limitation prescribed under Section 231 of the Act, the intention of the legislature was that there should not be any period of limitation for taking action under Section 201 and the liability to pay interest was mandatory and continuing so long the same was not paid. Mr. Nizamuddin further submits that the re-introduction of the selfsame period of limitation, which was earlier subsisting in Section 231 of the Act, by way of subsection (3) of Section 201 and that too, with effect from the year 2010, itself manifests the intentio....
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....by Mr. Nizamuddin, the Circular No. 275/201/95-IT (B), dated January 29, 1997 issued by the Central Board of Direct Taxes, has put an end to the controversy as regards the extent of liability of the deductor. The circular is quoted below: "No demand visualized under Section 201(1) of the Income-tax Act should be enforced after the tax deductor has satisfied the officer-in-charge of TDS, that taxes due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under Section 201 (1A) of the Act till the date of payment of taxes by the deductee-assessee or the liability for penalty under Section 271C of the Income-tax Act." Even if the person to whom interest was paid without deduction of tax had subsequently paid tax on that income, the deductor cannot escape the liability to pay interest under Section 201(1A) of the Act till the date of payment of taxes by the deductee-assessee nor can the deductor avoid the liability of penalty under Section 271C of the Act and the said provision is mandatory in nature. It is a different kind of a situation from the one of "income escaping assessment" and for the above reason, the legi....
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....the contention. It is seen that the order of ejectment against the applicant has become final. Section 21 of the Mamlatdar's Court Act does not prescribe any limitation within which the order needs to be executed. In the absence of any specific limitation provided thereunder, necessary implication is that the general law of limitation provided in Limitation Act (Act 2 of 1963) stands excluded. The Division Bench, therefore, has rightly held that no limitation has been prescribed and it can be executed at any time, especially when the law of limitation for the purpose of this appeal is not there. Where there is statutory rule operating in the field, the implied power of exercise of the right within reasonable limitation does not arise. The cited decisions deal with that area and bear no relevance to the facts." (Emphasis supplied by us). Even if we go back earlier to the year 1984, a Three-Judge-Bench of the Supreme Court in the case of Ishar Singh Vs. Financial Commissioner and others, reported in AIR 1984 SC 1719 by taking similar view held that no period of limitation would apply to the filing of an application under Section 43 of the Pepsu Tenancy Act of 1955....
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....r should also be exercised within three years and in any event, should not exceed five years. With great respect to the learned judges of the Bench, we are unable to accept that decision as a precedent for the general proposition of law that when there is no period of limitation prescribed in a Statute for exercising a power, that must be exercised in all cases within the reasonable period even in the absence of any intension of the legislature to the contrary because the attention of the Bench was not drawn to the earlier decisions of the Supreme Court of larger bench in the cases of Uttam Namdeo Mahale Vs. Vithal Deo and others (supra) and Ishar Singh Vs. Financial Commissioner and others (supra) indicated by us above taking a contrary view. In the case of CIT Vs. NHK Japan Broadcasting Corporation (supra), the Division Bench of Delhi High Court by relying upon the decision of the Supreme Court in the case of Punjab Bhatinda District Co-operative Milk Producers Union Ltd (supra), held that the period prescribed under Sections 147 and 148 of the Act should be reasonable period of time within which the power under Section 201 of the Act is required to be exercised. For the selfsame....
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....eview would take place." We fail to appreciate how the said decision can be of any help to the appellant for resolving the question as to the applicability of any reasonable period of limitation for invoking the power under Section 201 of the Act. In our opinion, the said decision is totally irrelevant for our purpose. Thus, the decisions cited by Ms. Roy Chowdhury are of no assistance to her client. We, therefore, find no substance in the first point raised by Ms. Roy Chowdhury as regards the question of limitation. On merit, Ms. Roy Chowdhury tried to convince us that her client did not take any loan from Globe International but utilized its unspent credit limits for importing the goods and thus, interest payable by the Global to the Bank was paid back to Global and as such, the interest was really payable by Globe International to the Bank and in such a circumstance, Section 194A was not attracted. The word "interest" has been defined in Section 2 (28A) of the Act as follows: "Section 2(28-A)- "interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or oblig....