Section 201(3)(ii) Limitation not applicable to Non resident Assessee

ITO Vs Bata India Ltd. (ITAT Kolkata)

There is no dispute on the basic fact that the Assessing Officer’s order herein dated 10.06.2009 passed u/s 201(1A) r.w.s. 195 of the Act has raised interest payment in issue of ₹1,02,545/- for the reason that it failed to pay the TDS deducted on royalty payments to the tune of ₹41,01,800/- on time. The CIT(A) has invoked Section 201(3)(ii) of the Act and holds that the assessee’s impugned default had been committed in FY 2002-03 and the Assessing Officer’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. Learned authorised representative 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. The Assessing Officer’s order dated 10.06.2009 stands restored as a necessary corollary. The Revenue’s appeal ITA 914/Kol/2017 is allowed.

FULL TEXT OF THE ITAT JUDGEMENT

This Revenue’s Miscellaneous Application filed u/s 254(2) of the Income Tax Act, 1961 (in short the ‘Act’) seeks to recall the tribunal’s order dated 28.03.2019 declining the main appeal ITA 914/Kol/2017 for involving lower than the prescribed tax effect of ₹50 lakhs as per the CBDT Circular No. 17/2019 dated 08.08.2019.

Heard both the parties. Case file(s) perused.

2. It transpires at the outset that Revenue’s sole substantive grievance seeks to restore its foregoing main appeal on the ground that it is an exceptional case involving audit objection. And also that this tribunal’s earlier order dated 30.07.2018 invoked the Board’s earlier Circular No. 03/2018 dated 11.07.2018 prescribing tax effect of ₹20 lakhs for filing the appeal. Learned DR submits that the same also stood recalled in MA No. 224/Kol/2018 accepted on 12.07.2019 for the very precise reason. The assessee is fair enough in not disputing all these factual averments. We accordingly accept the Revenue’s MA No. 227/Kol/2019 and recall our order dated 23.08.2019 dismissing the Revenue’s appeal for involving tax effect of ₹50 lakhs. Its main appeal ITA 914/Kol/2017 is restored to its original number.

We now proceed to deal with the main case Revenue’s appeal ITA 914/Kol/2017 itself with the consent of both the parties. There is no dispute on the basic fact that the Assessing Officer’s order herein dated 10.06.2009 passed u/s 201(1A) r.w.s. 195 of the Act has raised interest payment in issue of ₹1,02,545/- for the reason that it failed to pay the TDS deducted on royalty payments to the tune of ₹41,01,800/- on time. The CIT(A) has invoked Section 201(3)(ii) of the Act and holds that the assessee’s impugned default had been committed in FY 2002-03 and the Assessing Officer’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. Learned authorised representative 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. The Assessing Officer’s order dated 10.06.2009 stands restored as a necessary corollary. The Revenue’s appeal ITA 914/Kol/2017 is allowed.

3. Before parting, it is noted that the order is being pronounced after ninety days of hearing. However, taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the foregoing period needs to be excluded. For coming to such a conclusion, we rely upon the decision of the Co-ordinate Bench of the Mumbai Tribunal in the case of DCIT vs. JSW Limited in ITA No. 6264/Mum/2018 & 6103/Mum/2018, Assessment Year 2013-14, order dated 14th May, 2020.

4. This Revenue’s MA No. 227/Kol/2019 as well the main appeal ITA 914/Kol/2017 are allowed in above terms.

Order pronounced in the open court on 10.07.2020.