Nilgiri Dairy Farm Private Limited Vs ITO (Karnataka High Court)
Karnataka High Court held that passing of order under section 201(1) and 201(1A) of the Income Tax Act beyond period of four year is barred by limitation. Accordingly, impugned order set aside.
Facts- The assessee company is engaged in the business of dairy products has made certain payments towards consultancy charges to a Singapore based company. Under letter dated 31.1.2014 appellant was asked to explain as to why payment made to the Singapore based company i.e., MJR Consultancy Pvt. Ltd., during the above stated financial years should not be treated as fees for technical services as per the provisions of Section 9(1)(vii) of the Income Tax Act, 1961. Order dated 6.3.2014 was passed u/s. 201(1) and 201(1A) of the Act and a demand of Rs. 50,48,098/- u/s. 156 of the Act was issued.
Appeal were dismissed by both CIT(A) and ITAT. Being aggrieved, the present appeal is filed by the assessee.
Conclusion- This Court passed in the case of Commissioner of Income-tax, TDS v. Bharat Hotels Ltd., reported in (2015) 64 taxmann.com 325 (Karnataka) and in the case of The Director of Income Tax International Taxation & Anr., v. The Execution Engineer, M/s. Bangalore Water Supply and Sewerage Board (ITA No.166/2011 c/w ITA No.148/2011, disposed of on 24.8.2020) held that to pass order under Section 201(1) and 201(1A) of the Act, four years would be the limitation or reasonable time.
