ORDER
K.G. Bansal, Accountant Member
1. These two appeals of the revenue arise out of a consolidated order passed in the case of the assessee by CIT(Appeals)-XXX, New Delhi, on 7.11.2005. The umbrage taken by the revenue is that the learned CIT(A) erred in canceling the orders passed Under Section 201(1) read with Section 201(1A) of the Act. It is also mentioned that the learned CIT(A) erred in holding that on the facts and in the circumstances of the case no perquisite had to be taxed under Rule 3(e) of the Income-tax Rules, 1962.
2. On perusal of the order of the Assessing Officer, it is found that the assessee was extending benefit of free educational facilities to the wards of teachers and staff members. It is stated that in respect of the aforesaid perquisite, tax was not deducted at source. The number of such students was quantified at 95 for each of the year. The total fees payable in respect of these students was worked out at Rs. 95,69,000/-. The tax, which was not deducted but ought to have been deducted, was computed at Rs. 19,66,500/- and Rs. 21,63,150/- for accounting year 1998-99 and 1999-00. The interest Under Section 201(1A) was worked out at Rs. 20,05,830/- and Rs. 18,60,309/- respectively for these financial years. Thus, a total demand of Rs. 79,95,789/-, comprising of the tax deductible of Rs. 41,29,650/- and interest of Rs. 38,66,139/- was determined to be payable by the assessee in respect of defaults Under Section 201(1) and Section 201(1A) of the Act.
2.1 The assessee took a preliminary ground before the learned CIT(A) that the orders were barred by limitation, having been passed after lapse of four years from the end of the respective financial years. It was also agitated that the demand of income-tax raised was contrary to the provisions of Act and the Rules. The learned CIT(A) considered various arguments made before him. He came to the conclusion that the assessee was not incurring any expenditure on providing free educational facilities to the wards of the teachers and the staff members. It was also not maintaining and running the institution for the benefit of all its employees as a group. Therefore, he came to the conclusion that no perquisite was taxable within the meaning of Rule 3(c).
2.2 Before us, the learned DR pointed out that no limitation can be read into the provisions contained in Section 201(1). In this connection, he relied on the decision of Hon’ble Supreme Court in the case of Prakash Nath Khanna and Anr. v. CIT and Anr. , dealing with the offence Under Section 276-CC of the Act. While dealing with the interpretation of the statute, it was mentioned that the two principles- one relating to casus omissus and the other in regard to reading the statute as a whole- appeared to be well settled. Under the first principle, a casus omissus cannot be supplied by the court except in the case of clear necessity and without reason for which it is found in the four corners of the statute itself. But at the same time, a casus omissus should not be readily inferred and for that purpose all parts of a statute or the section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This will be more so if literal construction of a particular clause leads to manifestly absurd and anomalous results which could not have been intended by the Legislature. The court in that case had to decide the meaning of the term ” in due time”, used in Section 276-CC in the context of the liability to file the return Under Section 139(1) and the time granted to the assessee to file a belated return Under Section 139(4). Further, he relied on the decision of Hon’ble ITAT, Bangalore Bench (Special Bench) in the case of Aztec Software & Technology Services Ltd. v. ACIT , in which it was pointed out that where the statutory language is clear and unambiguous, the rule of statutory interpretation is that plain and natural meaning should be assigned to the words. The courts are not required to examine the intention of the Legislature by taking the aid of interpretation where the provision is clear and unambiguous. On the basis of these cases, it was his argument that no limitation has been prescribed under the Act for passing orders Under Section 201(1) while the Act provided for limitation in many other matters. Therefore, no limitation can be read into the Section 201(1) by taking the aid of the rules of statutory interpretation.
2.3 In reply, the learned Counsel pointed out that the plea of limitation was taken before the CIT(A) and, therefore, as a defendant the assessee could set up the same plea, as provided in Rule 27 of the Income-tax (Appellate Tribunal) Rule, 1963, even though the appeal was not filed against the order of the CIT(A) on this ground. Coming to the issue of limitation, reliance was placed on the order of Hon’ble ITAT in the case of Raymond Woolen Mills Ltd. v. ITO, in which it was held that the period of four years from the end of the relevant previous year would be a reasonable time for levy of interest in a case of delay of depositing the tax deducted at source to the credit of the government. As more than four years as aforesaid had elapsed, the order of the ITO was quashed. Further, he relied on the order of Hon’ble ITAT, Delhi Bench “E”, in the case of Sahara Airlines v. DCIT (2002) 83 ITD 11. He also drew our attention to the contrary decision in the case of Thai Airways International Co. Ltd. v. ACIT (2005) 2 SOT 389, in which it was pointed out that since a plethora of opportunities had been given to the assessee, who by and large did not cooperate with the Assessing Officer, the levy of interest was justified as there was no unreasonable delay on the part of the Assessing Officer. However, he drew our attention towards the subsequent order of the Tribunal in the case of N.H.K. Japan Broadcasting Corporation v. DCIT 2006 (101) TTJ 292-Del, in which the orders for financial years 1988-89 to 1994-95 were held to be invalid on grounds of limitation. In this case, the order in the case of Thai Airways International Co. Ltd. (supra) was also considered. It was mentioned that one of the courses open to the Bench was to refer the matter to a Special Bench. However, that was not necessary for many reasons, the first and the foremost being that the question of notice Under Section 142(1) being barred by limitation was considered in the case of Motorolla Inc. v. Dy. CIT (2005) 95 ITD 269 (Del) (SB) although no limitation period was prescribed under the Act. Secondly, the matter was also considered by Hon’ble Supreme Court in the case of Government of India v. Citidel Fine Pharmaceuticals . The Court held that a person has a right to raise the plea that the demand should have been raised within a reasonable period of time. Coming to the decision in the case of Prakash Nath Khanna (supra), it was pointed out that that decision was rendered in a totally different context of the interpretation of the term “due time”, and the issue of limitation was not involved. In the case of Aztech Software & Technology Services Ltd. (supra), the Tribunal- had held that when the language is clear and unambiguous, the rules of interpretation cannot be resorted to. This also did not involve the issue of interpretation of the statute in respect of implied limitation. The issue was also squarely covered by the decision of Hon’ble Supreme Court in the case of Sub-Inspector, Roop Lal and Ors. v. Lt. Governor , in which the Hon’ble Court expressed its anguish at the attitude of the Tribunal when it was mentioned that after noticing the earlier judgment of a coordinate bench and after noticing the judgment of this Court, the Tribunal still thought it fit to proceed to take a view totally contrary to the view taken in the earlier judgment thereby creating a judicial uncertainty in regard to the declaration of law involved in the case. Because of this approach of the latter Bench of the Tribunal, a lot of valuable time of the court is wasted and parties to this case have been put to considerable hardships. It was pointed out that the consideration of judicial propriety and decorum require that if a learned single judge hearing the matter is inclined to take a view different from the earlier decision of the High Court, whether of a Division Bench or of a single judge, as it needs to be reconsidered, he should not embark upon an enquiry siting as a single judge, but should refer the matter to a division bench or in a proper case, place the relevant papers before the Chief Justice, to enable him to constitute a larger bench to examine the question. It was his case that the order in the case of Raymond Woolen Mills Ltd. (supra) was passed after considering a number of authorities and it was held that where no limitation is prescribed, the order should be passed within a reasonable time. After considering various limitations prescribed under the Act, it was also held that for an order Under Section 201(1) and 201(1A), the period of four years could be reasonable.
3. We have considered the facts of the case and rival submissions. We find that the case of Raymond Woolen Mills Ltd. (supra) laid down the outer time limit for passing an order for levy of interest Under Section 201(1A). To that extent, the ratio of that order is applicable to the facts of the case. One of the issues in the case of Sahara Airlines Ltd. (supra) was whether any time limit should be read for passing an order Under Section 201 of the Act. The Tribunal quashed the order passed Under Section 201(1A) for financial year 1994-95 by following the ratio of the order in the case of Raymond Woolen Mills Ltd. (supra). We find that the order in the case of Thai Airways International Public Co. Ltd. (supra), to our mind, does not really over rule the orders in the case of Raymond Woolen Mills Ltd. and Sahara Airlines Ltd. In that case, it was found that soon after the Assessing Officer became aware of the facts of the case, he acted promptly. The assessee did not cooperate with the Assessing Officer. Therefore, it was held that there was no lapse on the part of the Assessing Officer, which was, in fact, not even been alleged, left alone established. Therefore, it was held that the order was not barred by limitation. This would mean that ordinarily the order should be passed within four years from the end of the financial year for which the default occurred. However, where such default was not known to the Assessing Officer or the assessee delayed the proceedings, there could be some extension to the aforesaid limit of four years. The revenue has not made out any case that the delay in passing the order was on account of the assessee. No argument has been addressed to us regarding the date on which Assessing Officer became aware of the alleged default. The delay in passing the order was of such a long period that due date for filing the return of income by the teachers and staff members would have expired long ago. Therefore, a direct action could not be taken against them for assessing perquisites in their hands. The decision of Hon’ble Supreme Court in the case of Sub-Inspector Rooplal (supra) enjoins upon us to follow earlier orders of the Tribunal. In the case of NHK Japan Broadcasting Corporation (supra), the Tribunal did not think it fit to refer the matter to the larger bench of the Tribunal on certain grounds. We find that recourse to such a procedure is not necessary as there is no contradiction in the orders and in any case the orders in the case of Raymond Woolen Mills and Sahara Airlines Ltd. have ordinarily to be followed, in view of the decision in the case of Sub-Inspector Rooplal. Therefore, respectfully following the orders in the case of Raymond Woolen Mills and Sahara Airlines Ltd., we are of the view that orders Under Section 201(1) and 201(1A) were barred by limitation. In view of the aforesaid discussion, we do not think it fit to go into the merits of the orders.
4. In the result, both the appeals of the revenue are dismissed.
5. The order was pronounced in the open court on 8 February, 2008.