TaxTMI 
TaxTMI 
2009 (12) TMI 679
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.... there is no such provisions of time limitation for passing order under section 201 and 201(1A) in the Income-tax Act, 1961 ?" 2. Briefly stated the facts of the case are that the assessee is engaged in running hydroelectric power project in the State of Himachal Pradesh. Certain lands were required by the State of Himachal Pradesh on behalf of the assessee for setting up of a power project. In proceedings under the Land Acquisition Act, interest was payable to the land owners. According to the Revenue, as per law, the assessee was bound to deduct tax at source before making payment of interest to the said land owners. It is not disputed that the assessee deposited the amount payable to the land owners along with interest in appea....
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....The Assessing Officer demanded interest under section 201(1A). It was contended on behalf of the assessee that the demand was barred by limitation. The Kerala High Court held as follows (page 366) : "We feel there is no limitation under section 231 so far as the demand of interest, vide proceedings dated August 16, 1991, is concerned." 5. On the basis of the aforesaid judgment, it is contended by Mrs. Kuthiala that since the assessee till date has not deposited the tax which it was bound to deduct in terms of the Act applying the law laid down in this judgment, the claim of the Revenue is within limitation. 6. Shri M. M. Khanna, learned senior counsel appearing on behalf of the assessee, has drawn our attention to a j....
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....riod, keeping in view the discussions made hereinbefore, must be found out from the statutory scheme. As indicated hereinbefore, maximum period of limitation provided for in sub-section (6) of section 11 of the Act is five years." 7. A Division Bench of the Delhi High Court in CIT v. NHK Japan Broadcasting Corporation [2008] 305 ITR 137 (Delhi) taking note of the judgment of the apex court in State of Punjab v. Bhatinda District Co-operative Milk Producers Union Ltd. [2007] 9 RC 637 ; [2007] 11 SCC 363 held that though no period of limitation is prescribed for exercising power under section 201(1) and 201(1A) of the Income-tax Act, 1961, still if such power is not exercised within a reasonable period, the same would become timebar....
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....rative Milk Producers Union Ltd. [2007] 9 RC 637 ; [2007] 11 SCC 363, referred to above, came to the conclusion that a period of four years is a reasonable period in which power under section 201 of the Act should be exercised. The court held thus (page 140) : "In so far as the Income-tax Act is concerned, our attention has been drawn to section 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 se....