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2020 (7) TMI 307 - AT - Income TaxTDS u/s 195 - order passed u/s 201(1A) on failure pay the TDS deducted on royalty payments - Time barred proceedings - CIT(A) has invoked Section 201(3)(ii) and holds that the assessee's impugned default had been committed in FY 2002-03 and the AO's notice stood issued on 03.04.2009, the proceedings initiated herein are barred by limitation since instituted beyond a period of six years from the end of the relevant financial year - HELD THAT - This is very very fair in stating that the assessee herein is not an Indian resident so as to be covered under the foregoing statutory provision describing limitation in initiation of the impugned proceedings. We therefore reverse the CIT(A)'s action holding the impugned proceedings as time barred. Assessing Officer's order dated 10.06.2009 stands restored as a necessary corollary. Revenue's appeal is allowed.
Issues:
1. Recall of tribunal's order based on tax effect criteria 2. Restoration of main appeal based on audit objection 3. Barred by limitation for proceedings initiated beyond six years 4. Exclusion of time period due to COVID-19 pandemic Issue 1: Recall of tribunal's order based on tax effect criteria The Appellate Tribunal ITAT Kolkata received a Revenue's Miscellaneous Application seeking to recall the tribunal's order dated 28.03.2019, which had declined the main appeal ITA 914/Kol/2017 due to a tax effect lower than the prescribed limit of ?50 lakhs as per CBDT Circular No. 17/2019 dated 08.08.2019. The tribunal accepted the Revenue's application, recalling the order and restoring the main appeal to its original status. Issue 2: Restoration of main appeal based on audit objection The Revenue's main grievance was to restore its main appeal based on it being an exceptional case involving an audit objection. The tribunal noted that the earlier order had invoked Circular No. 03/2018, which prescribed a tax effect of ?20 lakhs for filing an appeal. The tribunal accepted the Revenue's application and restored the main appeal, acknowledging the exceptional circumstances presented. Issue 3: Barred by limitation for proceedings initiated beyond six years In the main case of Revenue's appeal ITA 914/Kol/2017, the Assessing Officer's order raised interest payment issues related to TDS deductions on royalty payments. The CIT(A) had held the proceedings as time-barred, as the impugned default was committed in FY 2002-03, and the notice was issued beyond the six-year limitation period. The tribunal reversed the CIT(A)'s decision, noting that the statutory provision on limitation did not apply to the non-Indian resident assessee, thereby restoring the Assessing Officer's order. Issue 4: Exclusion of time period due to COVID-19 pandemic Acknowledging the delay in pronouncing the order due to the COVID-19 pandemic and lockdown, the tribunal excluded the period from the total duration. Citing a decision by the Mumbai Tribunal in a similar context, the tribunal justified excluding the time period due to the extraordinary circumstances. In conclusion, the tribunal allowed the Revenue's MA No. 227/Kol/2019 and the main appeal ITA 914/Kol/2017, addressing the issues of tax effect criteria, audit objection, limitation for proceedings, and the exclusion of time due to the pandemic.
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