Delhi High Court
Commissioner Of Income Tax vs Hutchison Essar Telecome Ltd on 15 April, 2010
Author: Badar Durrez Ahmed
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 15.04.2010
+ ITA 422/2010 & ITA 621/2010
COMMISSIONER OF INCOME TAX ... Appellant
- versus -
HUTCHISON ESSAR TELECOME LTD ... Respondent
Advocates who appeared in this case:-
For the Appellant : Ms. Rashmi Chopra
For the Respondent : Mr. Salil Kapoor, Mr. Sanat Kapoor, Mr. Ankit Gupta, Mr. Achin
Geol and Ms. Swati Gupta.
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE V.K. JAIN
1. Whether Reporters of local papers may be allowed to
see the judgment ?
2. To be referred to the Reporter or not ?
3. Whether the judgment should be reported in Digest ?
BADAR DURREZ AHMED, J (ORAL)
1. These appeals filed by the revenue arise out of a common order
dated 05.03.2009 passed by the Income Tax Appellate Tribunal in the
appeal filed by the revenue and the cross objections preferred by the
Respondent/Assessee.
2. In the said cross objections, the Respondent/Assessee raised the
preliminary issue of limitation in as much as the proceedings under Sections
201 and 201(A) were initiated after the period of four years from end of the
Financial Year in question had elapsed.
3. The Tribunal, following the decision of this Court in the case of
CIT Vs. NHK Japan Broadcasting Corporation (Delhi): [2008] 305 ITR
137 (Delhi) agreed with the contention of the Assessee and held the
proceedings to be barred by time. Consequently the cross objections were
allowed and the Revenue's appeal was dismissed. The Revenue aggrieved
by the Tribunal's decision is in appeal before us by way of the present
appeals.
4. We have examined the impugned decision as well as the decision
of this Court in the case of NHK Japan Broadcasting Corporation (supra),
wherein it has been clearly indicated that although no specific period of
limitation has been prescribed or indicated under Section 201 and 201(A), a
reasonable time limit has to be adopted. In that context, it examined the
provisions of Section 153(1)(a) and came to the conclusion :-
" 18. 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
assesement, which is two year 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
section 153 of the Act, though for completion of
assessment proceedings. The provisions of reassessment
are under sections 147 and 148 of the Act and they are
on a completely different footing and, therefore, do not
merit consideration for the purpose of this case.
19. Even though the period of three years would be
a reasonable period as prescribed by section 153 of the
Act 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 much 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
that in terms of the decision of the Supreme Court in
Bhatinda District Co-op. Milk Producers Union Ltd.
[2007] 9RC 637; 11SCC 363 action must be initiated by
the competent authority under the Income-tax Act, where
no limitation is prescribed as in section 201 of the Act
within that period of four years."
(underlining added)
5. From the above, it is clear that the proceedings under Section
201/ 201(A) of the Income Tax Act, 1961 can be initiated only within three
years from the end of the Assessment Year or within four years from the end
of the relevant Financial Year.
6. In the present case, we are concerned with the Financial Year
2001-02 or the Assessment Year 2002-03. The proceedings under Sections
201/ 201(A) were admittedly initiated beyond the period of three years from
the end of the relevant Assessment Year as also beyond the period of four
years from the end of the Financial Year. Consequently, the Tribunal has
correctly concluded that the proceedings were beyond time. No substantial
question of law arises for our consideration. The appeals are dismissed.
BADAR DURREZ AHMED,J
V.K. JAIN, J
APRIL 15, 2010
savita
