August 2023
TDS — Payments to non-residents — Failure to deduct tax at source — Order deeming payer to be “assessee-in-default” — Limitation for order — No statutory period of limitation — General principle that in absence of statutory provisions, orders must be passed within reasonable time — Writ — Power of High Court under article 226 to fix reasonable period of limitation — Limitation prescribed for deduction of tax at source on payments to residents applicable to payments to non-residents.
34. Vedanta Limited vs. Dy. CIT(International Taxation)
[2023] 454 ITR 545 (Mad)
A. Ys. 2010-11 to 2015-16
Date of order: 24th February, 2023
Section 201 of ITA 1961
TDS — Payments to non-residents — Failure to deduct tax at source — Order deeming payer to be “assessee-in-default” — Limitation for order — No statutory period of limitation — General principle that in absence of statutory provisions, orders must be passed within reasonable time — Writ — Power of High Court under article 226 to fix reasonable period of limitation — Limitation prescribed for deduction of tax at source on payments to residents applicable to payments to non-residents.
The petitioner-company is engaged in the business of mining and exploration of metals and exploration of oil and natural gas. For the F. Ys. 2009-10 to 2014-15, i.e, A. Ys. 2010-11 to 2015-16, the respondent AO passed the orders under section 201(1) of the Income-tax Act, 1961 (respectively on 31st March, 2017, 31st March, 2017, 28th March, 2019, 22nd March, 2021, 27th March, 2021 and 30th March, 2022) deeming the petitioner to be an “assessee-in-default” and levying consequential interest under section 201(1A) of the Act in respect of payments to non-residents.
In writ petitions filed by the Petitioner challenging the said orders, the High Court considered the following two questions:
“(a) Whether in the absence of limitation being presc
