ITAT quashes Income Tax proceedings against Bata India [Read Order]

income tax proceedings - ITAT - bata-india - Taxscan

The Income Tax Appellate Tribunal (ITAT), Kolkata bench has recently quashed the income tax proceedings against Bata India for defaulting TDS provisions by observing that the Company is not an Indian resident for the purpose of the Income Tax Act, 1961.

An appeal was filed by the department against the order of the Commissioner of Income Tax (Appeals) who quashed the original assessment order. Earlier, the Assessing Officer treated the assessee as an assessee-in-default in connection with interest payment in the 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.

Considering the departmental appeal, the Tribunal noted that 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 the 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 authorized 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 the 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,” the Tribunal observed.

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