Allowing the petition the Court held that the limitation for passing orders under section 201(1) of the Act deeming a person to be an “assessee-in-default” for failure to deduct tax at source on payments to residents must thus be adopted and treated as constituting “reasonable period” for the purpose of passing orders under section 201(1) of the Act deeming a person to be an “assessee-in-default” for failure to deduct tax at source on payments to non-residents. The extended period of limitation of seven years would be available for passing orders 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 residents. The sequitur is that the “reasonable period” for passing orders 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 with effect from April 1, 2010.(AY. 2010-11 to 2015-16)
Vedanta Limited v. Dy. CIT (IT)(2023)454 ITR 545/333 CTR 628 (Mad)(HC)
S. 201 : Deduction at source-Failure to deduct or pay-Non-Residents-Assessee-in-default”-Limitation-No statutory period of limitation-Orders must be passed within reasonable time-Limitation prescribed for residents is applicable to payments to non-residents-The extended period of limitation of seven years would be available for passing orders 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 residents is also applicable to non-residents. [S. 201(1), 201(3), Art. 226]