Court held that for the assessment years 1998-99 to 2005-06, the proceedings under section 201(1) and (1A) of the Income-tax Act, 1961 had been initiated after a period of four years. Therefore, they could not be held to have been initiated within a reasonable time and consequently, the proceedings could not be sustained in the eye of law. Followed State of Punjab v. Bhatinda District Co-operative Milk Producers Union Ltd. [2007] 11 SCC 363 has held that four years would be a reasonable period of time for initiating action, in a case where no limitation is prescribed. ( AY.1998-99 to 2005-06)
DIT(IT) v. Executive Engineer (2020) 428 ITR 294/ 194 DTR 364 (Karn.)(HC) Bangalore Water Supply and Sewerage Board v. ITO(IT) (2020) 428 ITR 294/ 194 DTR 364 (Karn.)(HC)
S. 201 : Deduction at source-Failure to deduct or pay-Short deduction –Limitation-No time limit prescribed-Within reasonable Time- Proceedings initiated after four years-Barred by limitation. [S. 201(IA)]