Tribunal restores main appeal, excludes COVID period, and overrules limitation for non-Indian resident assessee

The tribunal accepted the Revenue's Miscellaneous Application, recalling its earlier order based on tax effect criteria and restoring the main appeal to its original status. The tribunal also restored the main appeal due to an audit objection, overruling the limitation for proceedings initiated beyond six years by noting it did not apply to the non-Indian resident assessee. Additionally, the tribunal excluded the time period during the COVID-19 pandemic from the total duration, following a similar decision by the Mumbai Tribunal.

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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 Rs. 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 Rs. 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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