Delhi High Court
The Commissioner Of Income ... vs Moradabad Toll Road Company on 13 February, 2015
Author: S.Ravindra Bhat
$~13
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on: 13th February, 2015
+ ITA 93/2015
THE COMMISSIONER OF INCOME TAX-TDS ..... Appellant
Through Mr. Rohit Madan, Adv.
versus
MORADABAD TOLL ROAD COMPANY ..... Respondent
Through None
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.K.GAUBA
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
CM No.2563/2015
Exemption is allowed subject to all just exceptions.
The application is disposed of.
CM No.2564/2015
For the reasons stated in the application the delay in re-filing the
appeal is condoned.
The application is disposed of.
ITA 93/2015
1. The Revenue is aggrieved by the order dated 25.11.2011 of the
Income Tax Appellate Tribunal (ITAT) in ITA Nos.1682, 1683/De1./11,
inasmuch as the ITAT affirmed an order of the CIT (Appeals) to the effect
that the treatment of the assessee's company as one in default for the
purpose of proceeding under Section 201 of the Income Tax Act, is barred
by time.
ITA No.93/2015 Page 1
2. The relevant facts are that the assessee company was sought to be as
assessee in default for the Assessment Year (AY) 2002-03 and Financial
Year (FY) 2003-04 and sought to add back certain amounts and
consequently demanded, the relative sums of money. The assessee's
position was that treating the assessee company as one in default irrespective
of past assessment years by order dated 4th March, 2009 this was arrested
that its returns were financed much earlier and that the action under Section
201 is belated. This contention was accepted by the CIT (A), who followed
the Division Bench ruling of this Court in Commissioner of Income Tax vs.
NHK Japan Broadcasting Corporation (2008) 305 ITR 137 (Del) and CIT
vs. Hutchison Essar Telecome Ltd. (2010) 323 ITR 230 (Delhi) concludes
the issue. In NHK Japan (Supra) the Court had said that even though no
specific period of limitation was prescribed for action under Section 201, the
Income Tax Authorities have to initiate proceedings within reasoned time as
it was determined to be four years.
3. Learned counsel for the Revenue urges that the subsequent
developments after Japan Broadcasting (supra) was decided determined its
ratio. He relies upon the amendment by which Section 201(3) substituted
with effect from 01.04.2010 and whereby the period of limitation indicated
was six years and subsequently by another substitution w.e.f. 01.10.2014, by
Finance Act No.2 of 2014, whereby the period of limitation was extended to
seven years. As a result, the provision which exists as on date is as follows:
"201 (3) No order shall be made under sub-section
(1) deeming a person to be an assessee in default
for failure to deduct the whose or any part of the
tax from a person resident in India, at any time
ITA No.93/2015 Page 2
after the expiry of seven years from the end of the
financial year in which payment is made or credit
is given"
4. We have considered the arguments of the Revenue and are of the
opinion that the substantial time as extended in the previous judgment of this
Court in Commissioner of Income Tax (TDS)-I vs. C.J.International Hotels
Pvt. Ltd. (in ITA No.57/2015) decided on 09.02.2015, as discussed
elaborately in a reasoned order of this Court, two reasons for the Court to
reject the submissions;
(i) Section 201 itself was amended, by introduction of Section 201(1) (A),
significantly that amendment was given irrespective effect from 01.04.1966;
(ii) The Parliament consciously did not amend Section 201 by inserting sub-
section (3) with irrespective effect.
This amounts to acceptance by legislature of this Court ruling which was
decided in an appeal by special leave of Supreme Court. Although the
Supreme Court left the issue open, we are of the opinion - the two reasons -
statutory developments indicated by us, render the decision in NHK Japan
(supra) still good law for the period prior to 01.04.2010.
5. For the above reason, no substantial question of law arises and
consequently the appeal is dismissed.
S. RAVINDRA BHAT, J
R.K.GAUBA, J
FEBRUARY 13, 2015
vld
ITA No.93/2015 Page 3
