2025 (9) TMI 306

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.... details:- S. No WA. No. WP. No Date of ending of F.Y A.Y Date of SCN Date of final order Demand raised In Rs.   413/ 2023 8269/ 2017 31.03.2010 2010-11 14.03.2017 31.03.2017 4,24,73,595 2. 373/ 2023 8270/ 2017 31.03.2011 2011-12 08.02.2017 31.03.2017 3,91,23,060 3. 374/ 2023 11831 /19 31.03.2012 2012-13 31.01.2018 28.03.2019 8,06,92,780 4. 414/ 2023 8344/ 2021 31.03.2013 2013-14 31.01.2018 22.03.2021 9,60,51,920 5 - 415/ 2023 8351/ 2021 31.03.2014 2014-15 01.03.2021 27.03.2021 10,25,55,135 6. 375/ 2023 7939/ 2022 31.03.2015 2015-16 01.03.2021 30.03.2022 5,75,27,600 3.The appellant company is engaged in the business of mining and exploration of metals and oil and natural gas. During the relevant financial years commencing from 2009-2010 to 2014-2015, the appellant entered into a Consultancy Agreement and Representative Office Agreement with Vedanta Resources Public Limited Company (VRPLC) which is a non-resident entity. For the services rendered by VRPLC, remuneration was paid by the appellant without deducti....

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....ections 201 and 201A cannot be passed beyond a period of four years. 6.The learned Senior counsel relied on the following case laws:- (1) (2007) 1 SCC 584 (ESI Corpn. Vs. C.C.Santhakumar). (2) (2006) 3 SCC 74 (Transmission Corpn. of A.P. Ltd. and others Vs. Sri Rama Krishna Rice Mill). (3) (2004) 11 SCC 364 (Commissioner of Customs, Kandla Vs. Essar Oil Ltd., and Others). (4) (2002) 1 SCC 134 (Veerayee Ammal Vs. Seeni Ammal). (5) (AIR1969 SC 1297) (State of Gujarat Vs. Patel Raghav Natha & Ors). (6) (2007) 11 SCC 363) (State of Punjab Vs. Bhatinda District Coop. Milk Producers Union Ltd.). (7) (2020 (374) E.L.T. 15 (Mad). (J.Sheik Parith Vs. Commissioner of Customs). (8) (1997) 6 SCC 71 (Mohamad Kavi Mohamad Amin Vs. Fatmabai Ibrahim). (9) (2007) 295 ITR 136 (Mad) (M.Srinivasa Rao Vs. ACIT) (10) (2009) 316 ITR 303 (Delhi) (CIT Vs. Goyal M.G.Gases (P) Ltd.,) (11) (2017) 291 CTR 254 (Delhi) (Bharti Airtel Ltd., Vs. UOI). (12) 2008 (305) ITR 137 (Delhi) (CIT Vs. NHK Japan Broadcasting Corporation). (13) (2016) 385 ITR 436 (Delhi) (Vodafone Essar Mobile Services Ltd.,....

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....out the consequence of failure to deduct tax and provides that such a person shall be deemed to be an assessee in default. According to the Department, the assessee failed to carry out this statutory obligation and hence, they should be deemed to be an assessee in default. The learned Senior Counsel for the assessee made it clear that he is contesting the impugned orders only on the ground of limitation and not on merits. 9.It is not in dispute that during the relevant period, while specific periods were prescribed in respect of deductions to be made from the residents, no such period was prescribed in respect of non-residents. The stand of the department is that since no limitation has been prescribed in the latter case, Courts should not prescribe any ceiling period. We cannot accept such a contention. The position has been amply made clear in the recent decision of the Hon'ble Supreme Court reported in (2022) 19 SCC 188 (Union of India V. CITI Bank). It was held therein as follows:- "19. It is a settled proposition of law that when the proceedings are required to be initiated within a particular period provided under the statute, the same are required to be initi....

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.... "(3) No order shall be made under sub-section (1) deeming a person 'to be an assessee in default for failure to deduct the whole or any part of the tax from a person resident in India, at any time after the expiry of- (i) two years from the end of the financial year in which the statement is filed in a case where the statement referred to in section 200 has been filed ; (ii) four years from the end of the financial year in which payment is made or credit is given, in any other case:" This was amended in the year 2012 with retrospective effect from 01.04.2010 and the four years period was enhanced to six years. With effect from 01.10.2014, it became seven years. This was the position which prevailed when the impugned orders were passed. 12.The learned Single Judge opined that "the reasonable period" for passing order under Section 201(1) of the Act deeming a person to be an "assessee in default" for failure to deduct taxes in respect of payments to non-residents shall also be seven years from the end of the financial year in which the payment is made or credit given w.e.f 01.04.2010. Reason has also been given for taking such a view. It is well settled t....

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....ne case on 28.03.2019, in the other, final order was passed only on 22.03.2021. Show cause notices for the other two assessment years were issued only on 01.03.2021. The appellant is the assessee in respect of all the six assessment years. The subject matter is the same in respect of all the impugned orders. The recipient in all the cases is also the same entity. Since payment to overseas entity is involved, the assessee falls under the International Taxation Circle. Nothing stopped the department from issuing notices in respect of the assessment years commencing from 2012-13 to 2015-16 when they issued show cause notice on 08.02.2017 for the first time for the AY 2011-12. Even if seven years is taken as the yardstick, while it is possible to save the orders dated 31.03.2017 on that ground, the same logic cannot obviously be extended to the orders passed in respect of the other assessment years. There is no earthly reason as to why simultaneous action was not initiated in respect of all the assessment years in Feb 2017 itself. Admittedly, by then, the assessment year 2015-16 had already ended. The moot question is why show cause notice in respect of the assessment years 2014-15 and....