Smt. Gunjahalli Renuka, Bellary V. The ACIT, Central Circle - 1(3), Bangalore

ITA 1104/BANG/2022

AI Insights

The case involves Smt. Gunjahalli Renuka, who appealed against the order of the CIT(A), which upheld the assessment of her total income including salary earned abroad, for the Assessment Year 2013-14. The primary contention was regarding the incorrect inclusion of her foreign salary in the taxable income, despite her status as a non-resident. The Tribunal had previously remanded the issue back to the CIT(A) to examine the claim for relief under Sections 90/91 of the Income Tax Act, 1961, or under the Double Taxation Avoidance Agreement (DTAA). Upon failure to substantiate her claims, the CIT(A) dismissed her appeal, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115299 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-01-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 05-12-2022
• Other Referred Cases: Goetze India Pvt. Ltd. vs. CIT, NTPC Ltd. vs. CIT, CIT vs. Motor Industries Co. Ltd., CPG Consultants India Pvt. Ltd. vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Residential status; Salary income; Double taxation relief; Set aside
• Section: 90

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU (SMC) “C” BENCH, BENGALURU Before Shri Chandra Poojari, Accountant Member ITA No. 1104/Bang/2022 (Assessment Year: 2013-14) Smt. Gunjahalli Renuka "HRISHIKESH", Goldsmith Street Besides Indian Bank Bellary 593101 PAN – ABYPR5731L vsACIT, Central Circle - 1(3) Bengaluru (Appellant) (Respondent) Assessee by:Ms. Sunaiana Bhatia, CA Revenue by:Shri Ganesh R. Ghale, Standing Counsel Date of hearing: 17.01.2023 Date of pronouncement: 17.01.2023 O R D E R Per: Chandra Poojari, A.M. This appeal by the assessee is directed against the order of the CIT(A), II, Bangalore dated 18.10.2022 for AY 2013-14. 2.The assessee has raised the following grounds of appeal: - “1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence probabilities, facts and circumstances of the appellant's case. 2. The learned CIT[A] is not justified in once again upholding the assessment of Rs.29,48,650/- as the total income of the appellant in the set-aside proceedings, without appreciating the real purport of the order of the Hon'ble ITAT restoring the matter back to the file of the learned CIT[A] in the first round of proceedings under the facts and in the circumstances of the appellant's case. ITA No. 1104/Bang/2022 Smt. Gunjahalli Renuka 2 3. The learned CIT[A] ought not to have held that the taxation of salary income in India that was erroneously reported in the return of income filed cannot be gone into and the only issue in the appeal was the relief claimed u/s. 90 of the Act without appreciating that the salary earned from employment outside India and a revised computation of income in the status of NRI was required to be adjudicated to resolve the real issue in appeal. 4. The learned CIT[A] ought to have appreciated that the correct residential status of the appellant was non-resident and hence, the learned CIT[A] had erred in holding that the appellant has to be assessed on the income as reported in the return of income, which return filed was contrary to the provisions of the Income-tax Act and hence, ought not to have been accepted under the facts and in the circumstances of the appellant's case. 5. The learned CIT[A] ought not to have refused to consider the revised computation filed by the appellant before the A.O. in course of assessment having regard to the judgement of the Hon'ble Supreme Court in the case of Goezte India Pvt. Ltd. reported in 284 ITR 323 [SC] under the facts and in the circumstances of the appellant's case. 6. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies herself liable to be charged to interest u/s. 234-A, 234-B and 234-C of the Act, which under the facts and in the circumstances of the appellant's case and the levy deserves to be cancelled. 7. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.” 3. The facts of the case are that the assessee came in appeal before this Tribunal. The Tribunal vide order dated 03.07.2019 in ITA No. 552/Bang/2019 remanded the issue to the file of the CIT(A) with the following observations: - “6.3.1 I have heard the rival contentions and perused and carefully considered the material on record; including the judicial pronouncements cited. The facts of the case, as emerge from the record, are that in the course of assessment proceedings the assessee ITA No. 1104/Bang/2022 Smt. Gunjahalli Renuka 3 by way of revised computation raised an additional claim for relief under section 90/91 of the Act or under DTAA in respect of salary income earned in the status of an NRI in the year under consideration. The AO ignored the aforesaid claim put forth by the assessee. 6.3.2 On a perusal of the impugned order, I find that the CIT(A) rejected considering the assessee's claim on this issue without dealing with the grounds raised on the merits of the issue. The CIT(A) dismissed the assessee's claim and upheld the action of the AO by relying on the decision of the Hon'ble Apex Court in the case of Goetze (India) Ltd., (Supra). In my considered view, this decision of the Hon'ble Apex Court in the case of Goetze (India) Ltd., (Supra) does not place fetters on the appellate authorities to entertain fresh claims put forth by the assessee on issues which are a part of record, and/or are material for the purpose of assessing the correct tax liability of the assessee in accordance with law. I am therefore, of the considered opinion that it was incumbent for the CIT(A) to have examined the assessee's additional claim for relief under section 90 of the Act or under DTAA in view of the grounds raised before him and particularly when the relevant material is part of the records of assessment as this claim admittedly was put forth before the AO in assessment proceedings. In coming to this view, support is drawn from the ratio laid down in the decision of the Hon'ble Apex Court in the case of NTPC Ltd., (229 ITR 383); of the Hon'ble Karnataka High Court in the case of CIT Vs. Motor Industries Co. Ltd., (229 ITR 137) and of the co- ordinate bench of this Tribunal in the case of CPG Consultants India Pvt. Ltd., Vs. DCIT (ITA No.1596/Bang/2016 dt. 31/5/2017). In this factual and legal matrix of the case, as discussed above, I set aside the impugned order of the CIT(A) on this issue and after admitting the grounds raised by the assessee on its claim for being granted relief under section 90 of the Act or under DTAA in respect of salary of Rs.7,20,892/- earned as NRI, restore the matter to the file of the CIT(A) for examination, verification and adjudication on merits, after affording both the assessee and the AO adequate opportunity of being heard in the matter and to file details/submissions required in this regard. Consequently, ground Nos.2 to 4 raised by the assessee are allowed for statistical purposes. Since these grounds by the assessee raised on merits with regard to its claim for grant of relief under section 90 of the Act or under DTAA have been restored for consideration and adjudication on merits to the file of the CIT(A) as per the findings in paras 6.3.1 and 6.3.2 of this order (Supra), it is not deemed ITA No. 1104/Bang/2022 Smt. Gunjahalli Renuka 4 appropriate to adjudicate these grounds raised by the assessee in this appeal on merits. 7. In the result, the assessee's appeal for Assessment Year 2013-14 is partly allowed for statistical purposes.” 4.After remitting the issue back to the file of the learned CIT(A) by the Tribunal, the CIT(A) observed that the assessee has not produced any evidence to substantiate her claim of relief under Sections 90/91 of the Income Tax Act, 1961 (the Act) and accordingly he dismissed the appeal of the assessee. Once again the assessee is in appeal before the Tribunal. 5.I have heard the rival contentions and perused the material on record. The main contention of the learned A.R. is that the assessee being a non- resident is not liable for taxation of salary income earned in Dubai which has been included in the total income inadvertently. The same is to be excluded from the total income of the assessee. In support of this she drew our attention to the copy of salary certificate from Centurion Consulting FZE, Dubai placed in Paper Book, page No. 22, copy of Bank Statements for the period 21.09.2012 to 31.03.2013 from Emirates NBD, Bank Street Branch, Dubai placed in Paper Book page Nos. 23 to 37. She also produced copy of passport placed in Paper Book page Nos. 37 to 39 and submitted that on examination of these documents one can easily come to the conclusion that the assessee being a non-resident earned salary income in foreign country which cannot constitute a part of total income of the assessee and it is exempted income in India in the hands of the assessee, the same to be excluded from taxation. In my opinion, these facts required to be examined at the end of the AO in the light of above documents. Accordingly in the interest of justice, I remit the entire issue in dispute to the file of the AO for re-examination. Further the assessee is at liberty to place any other document in support of her claim. Accordingly, the order of the lower authorities are set aside and remitted to the file of the AO for fresh consideration. ITA No. 1104/Bang/2022 Smt. Gunjahalli Renuka 5 6.In the result, the appeal filed by the assessee is allowed for statistical purposes. Dictated and pronounced in the open Court on 17 th January, 2023. Sd/- (Chandra Poojari) Accountant Member Bengaluru, Dated: 17 th January, 2023 Copy to: 1.The Appellant 2.The Respondent 3.The CIT(A) -II, Bangalore 4.The Pr. CIT - Central, Bangalore 5.The DR, ITAT, Bengaluru 6.Guard File By Order //True Copy// Assistant Registrar ITAT, Bengaluru n.p.