Rima Bajpai, Secunderabad, Secunderabad V. ADIT, Intl. Taxn-2, Hyderabad, Hyderabad

ITA 1404/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2655 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 18-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Keywords: Double taxation relief; Revised return
• Section: 143(3); 154

Judgement Text

ITA N O1404 OF 2016 RIMA BAJPAI SECUNDERABAD PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B SMC BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1404/HYD/2016 (ASSESSMENT YEAR: 2011-12) MRS. RIMA BAJPAI SECUNDERABAD PAN: AMRPB 2929 G VS ASSTT. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)-II, HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S.P. CHIDAMBARAM FOR REVENUE : SMT. N. SWAPNA, DR O R D E R THIS IS ASSESSEES APPEAL FOR THE A.Y 2011-12 AGAINS T THE ORDER OF THE CIT (A)-10, HYDERABAD, DATED 15.06 .2016. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUN DS OF APPEAL: THE APPELLANT RESPECTFULLY SUBMITS THAT THE APPELLANT MAY PLEASE BE ALLOWED TO TAKE THE FOLLOWING GROUNDS OF APPEAL AGAINST THE ORDER OF THE CIT(A)-10, HYDERABAD IN APPEAL NO 0085/CIT (A)-10/2014-15 DATED 15/06/2016. ( 1) ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN CONFIRMING THE ACTION OF THE LD AO IN REJECTING THE APPLICATION OF THE APPELLANT U/S 154 OF THE INCOME-TAX ACT. (2) ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN HOLDING THAT THE ISSUE INVOLVED WAS DEBATABLE. DATE OF HEARING : 21.08.2017 DATE OF PRONOUNCEMENT : 31.08.2017 ITA N O1404 OF 2016 RIMA BAJPAI SECUNDERABAD PAGE 2 OF 5 (3) ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN CONFIRMING THE ACTION OF THE AO IN REJECTING THE CLAIM OF THE APPELLANT THAT HER INTEREST INCOME WAS LIABLE TO BE TAXED @15% AS PER DTAA AND NOT @30%. (4) ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN IGNORING THE BINDING DIRECTIONS OF THE CBDT AS CONTAINED IN CIRCULAR NO 14(XL-35) DATED 14/04/1955. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL AND A NON-RESIDENT, FILED HER RETURN OF INCOME FOR THE A.Y 2011-12 ON 24.08.2011 ADMITTING AN INCOME OF RS. 38,24,020. THE ASSESSEE HAD DERIVED INTEREST INCOME FROM DEPOS ITS IN VARIOUS BANKS IN INDIA. DURING THE ASSESSMENT PROCEEDINGS U /S 143(3), THE AO NOTICED THAT BEING NON- RESIDENT, THE ASSESS EE IS NOT ELIGIBLE FOR CLAIMING THE LOWER CEILING OF RS.1,90, 000 WHICH IS APPLICABLE TO THE RESIDENT WOMEN ASSESSEES ONLY. HE THEREFORE, RE- CALCULATED THE TAXABLE INCOME OF THE ASSESSEE AND C OMPUTED THE TAX PAYABLE AT RS.11,00,580. THEREAFTER THE ASSESSE E PREFERRED AN APPLICATION U/S 154 OF THE ACT STATING THAT THE ASS ESSEE HAS OFFERED THE INTEREST INCOME TO TAX @ 30% WHICH IS AP PLICABLE TO RESIDENTS, WHEREAS AS PER THE INDO-UK DTAA, THE TAX RATE APPLICABLE IS ONLY 15% AND SOUGHT THE RECTIFICATION OF THE ASSESSMENT ORDER. THE AO HOWEVER, REJECTED THE ASSE SSEES APPLICATION HOLDING THAT THE ASSESSEE HAS NOT CLAIM ED THE SAID TAX RATE IN THE RETURN OF INCOME FILED FOR THE SAID A.Y AND HENCE NO ACTION SHALL BE TAKEN IN RESPECT OF APPLICATION U/S 154 OF THE I.T. ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BE FORE THE CIT (A) WHO REJECTED THE SAME HOLDING THAT THE ASSESSEE HAS NOT FILED ANY ITA N O1404 OF 2016 RIMA BAJPAI SECUNDERABAD PAGE 3 OF 5 REVISED RETURN NOR HAS SHE FILED ANY APPEAL AGAINST THE ORDER U/S 143(3) OF THE ACT AND SINCE THE ISSUE WAS A DEBATAB LE ISSUE, THE PROVISIONS OF SECTION 154 CANNOT BE INVOKED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE WAS UNDER AN IMPRESSION THAT SHE HAS T O FILE THE RETURN OF INCOME ON THE INCOME EXCEEDING THE LIMIT FIXED FOR WOMEN ASSESSEES FOR THE RELEVANT A.Y AND PAYING THE TAX @ 30% HAS TO BE PAID ON THE INTEREST INCOME EARNED IN IND IA. HE SUBMITTED THAT THE AO HAD CORRECTLY NOTICED AND OBS ERVED THAT THE ASSESSEE IS A NON-RESIDENT AS ALSO DECLARED BY THE ASSESSEE IN HER RETURN OF INCOME AND HAD NOT ALLOWED LOWER CEIL ING OF RS.1,90,000 WHICH WAS APPLICABLE TO THE WOMEN ASSES SEES FOR THE RELEVANT A.Y BUT FAILED TO APPLY THE PROVISIONS OF I NDO-UK DTAA FOR APPLYING THE RATE OF TAX TO THE RETURNED INCOME . HE SUBMITTED THAT THE ASSESSEE HAS THEREFORE, FILED AN APPLICATI ON AND THE REVENUE BEING UNDER AN OBLIGATION TO COLLECT THE TA XES IN ACCORDANCE WITH THE LAW OUGHT NOT TO HAVE DISMISSED THE APPLICATION U/S 154 OF THE ACT AND SHOULD HAVE GIVE N CONSEQUENTIAL RELIEF BY REFUNDING THE EXCESS TAX CO LLECTED BY THE AO. IN SUPPORT OF HIS CONTENTION, THE LEARNED COUNS EL FOR THE ASSESSEE PLACED RELIANCE UPON THE FOLLOWING: I) CBDT CIRCULAR NO.14(XL-35) DATED 11.4.1955 II) SHREE SATYANARAYAN INVESTMENT CO. LTD VS. ITO REPORTED IN (2007) 17 SOT 303 (MUM). III) ION GEOPHYSICAL CORPORATION VS. ADIT (I.T) REP ORTED IN (2015) 54 TAXMANN.COM 286 (DELHI TRIB.) IV) ACIT CIRCLE 1, JAMNAGAR VS. RUPAM IMPEX, REPORT ED IN (2016) 66 TAXMANN.COM 181 (RAJKOT TRIB.) ITA N O1404 OF 2016 RIMA BAJPAI SECUNDERABAD PAGE 4 OF 5 4. THE LEARNED DR, HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I FIND THAT THE ASSESSEE HAS FILED HER R ETURN OF INCOME BY DECLARING HERSELF TO BE A NON-RESIDENT AND DURIN G THE ASSESSMENT PROCEEDINGS THE AO HAS APPLIED HIS MIND TO THE SAID STATUS OF THE ASSESSEE AND HAS REJECTED THE ASSESSE ES CLAIM OF APPLYING THE LOWER CEILING OF RS.1,90,000 AS APPLIC ABLE TO THE WOMEN ASSESSEES FOR THE RELEVANT A.Y. HAVING HELD SO , IT WAS THE DUTY OF THE AO TO HAVE EXAMINED THE RATE OF TAX APP LICABLE TO THE INTEREST INCOME OFFERED TO TAX BY THE ASSESSEE. AS PER SUB-SECTION 2 OF SECTION 90, THE PROVISIONS OF INCOME TAX SHALL APPLY TO A NON- RESIDENT TO THE EXTENT THEY ARE MORE BENEFICIAL TO THE ASSESSEE. THEREFORE, IF THE RATE OF TAX APPLICABLE UNDER THE DTAA IS MORE BENEFICIAL TO THE ASSESSEE AS COMPARED TO THE RATE OF TAX UNDER THE PROVISIONS OF THE INCOME TAX ACT, THEN THE PROVISIO NS OF THE DTAA ARE TO BE APPLIED. IT IS THE DUTY OF THE AO TO EXAM INE WHETHER THE PROVISIONS OF THE DTAA ARE MORE BENEFICIAL TO THE A SSESSEE BEFORE COMPUTING THE TAXABLE INCOME OF THE ASSESSEE. THE A SSESSEES APPLICATION U/S 154 OF THE ACT FOR REFUND OF THE EX CESS TAX COLLECTED, WAS THEREFORE, MAINTAINABLE. THE DECISIO NS ON WHICH THE ASSESSEE HAS PLACED RELIANCE UPON ALSO HOLD THAT IT IS THE DUTY OF THE AO TO CHARGE INCOME TAX AT THE PRESCRIBED RATE IN ACCORDANCE WITH THE LAW. IN VIEW OF THE SAME, I AM INCLINED TO ACCEPT THE ASSESSEES CONTENTION AND DIRECT THE AO TO EXAMINE THE RATE OF TAX AS PER THE DTAA BETWEEN INDIA AND UK AND ALSO THE R ATE OF TAX AS ITA N O1404 OF 2016 RIMA BAJPAI SECUNDERABAD PAGE 5 OF 5 PER THE INCOME TAX ACT AND APPLY THE PROVISION WHIC H IS MORE BENEFICIAL TO THE ASSESSEE. IN VIEW OF THE SAME, TH E ASSESSEES APPEAL IS ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2017. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 31 ST AUGUST, 2017. VINODAN/SPS COPY TO: 1 MRS. RIMA BAJPAI, 10-2-274, MISHRA BHAVAN, S.P. R OAD, SECUNDERABAD 500026 2 ASSTT. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXA TION)-II, HYDERABAD 3 CIT (A)-10 HYDERABAD 4 CIT (IT & TP) HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER