TaxTMI 
TaxTMI 
2008 (4) TMI 182
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....for the parties, we admit this appeal and frame the following substantial question of law for consideration: "Whether the Income-tax Appellate Tribunal was correct in law in holding that the orders passed under section 201(1) and 201(1A) of the Income-tax Act, 1961, are invalid and barred by time having been passed beyond a reasonable period ?" 3. Filing of paper books is dispensed with. 4. Since the question arising in this appeal has arisen in a large number of other appeals, we have heard the matter in full and proceed to deliver the judgment rather than merely admitting the matter for taking it up in due course. 5. The assessee is a Government-company of a foreign country and is carrying on the business in India. In respect ....
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....d the interest. The apprehension of the assessee is only with regard to penalty that may be imposed under section 271C of the Act as also under section 221 of the Act. 9. The Tribunal came to the conclusion, with which we agree, that the initiation of proceeding against the assessee in treating it as in default, were not initiated within a reasonable period of time by the Revenue and that there must be some time limit within which the Revenue may initiate proceedings of this nature. 10. There is no dispute that section 201 of the Act does not prescribe any limitation period for the assessee being declared as an assessee in default. 11. Learned counsel for the Revenue relied upon Bharat Steel Tubes Ltd. v. State of Haryana [1988] 70....
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....it would be barred by limitation. In that case, the assessment proceedings had been unduly delayed and the Supreme Court came to the conclusion that for completing the assessment proceedings there is no period of limitation prescribed and that would depend upon the facts of each case. Considering the facts of the case, the Supreme Court gave a direction to the assessing authority to complete all the pending assessments within a period of four months from the date of delivery of the judgment. 16. In so far as Bhatinda District Co-op. Milk Producers Union Ltd. [2007] 9 RC 637; 11 SCC 363 is concerned, the question that arose before the Supreme Court was regarding initiation of proceedings by exercise of jurisdiction by the statutory author....
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....t for completion of proceedings, we have been told that the 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. 20. The rationale for this seems to be quite clear-if there is a time limit for completing the assessment, then the time limit for initiating the proceedings must be the same, if not less. Nevertheless, the Tribunal has given a greater period for commencement or initiation of proceedings. 21. We are not inclined to disturb the time limit of four years prescribed by the Tribunal and are of the view tha....
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.... would it extend the reasonable time that is postulated by the scheme of the Income-tax Act. The assessee cannot be put, in a sense, in a worse position merely because it has admitted its liability. If the assessee had denied its liability, the question that would have arisen would be whether the Revenue could have initiated proceedings after a lapse of four years. The answer to that would of course have to be in the negative in view of the reason that we have already indicated above. The fact that the assessee agreed to pay the tax voluntarily cannot put the assessee in a situation worse than if it had contested its liability. 25. We may also note that under section 191 of the Act, the primary liability to pay tax is on the person whose....