Dr. Ramesh Krishne Gowda, Dunthur V. Deputy Commissioner Of Income Tax (International Taxation), Circle-1(1), Bangalore

ITA 257/BANG/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4087 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 25-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISHRA
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Salary income; Period of limitation; Source of fund; Time period of passing order; Set aside
• Section: 5(2); 139(5); 143(1); 201; 139(1); 154

Judgement Text

ITA NOS.257 TO 259/BANG/2021 DR. RAMESH KRISHNA GOWDA, DUNTHUR IN THE INCOME TAX APPELLATE TRIBUNAL BBENCH: BANGALORE BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NOS.257 TO 259/BANG/2021 ASSESSMENT YEAR: 2011-12 TO 2013-14 DR. RAMESH KRISHNA GOWDA #761. VINAYAKA LAYOUT 11 TH MAIN, NAGARBHAVI MAIN ROAD BANGALORE 560 072 PAN NO : AGLPD3185C VS. DEPUTY COMMISSIONER OF INCOME-TAX (INTERNATIONAL TAXATION) CIRCLE-1(1) BANGALORE APPELLANT RESPONDENT APPELLANT BY : SHRI S.V. RAVI SHANKAR, A.R. RESPONDENT BY : SHRI PRIYADARSHI MISHRA, D.R. DATE OF H EARING : 06.10.2021 DATE OF PRONOUNCEMENT : 06.10.2021 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THESE APPEALS CHALLENGING TH E ORDER PASSED BY LD. CIT(A)-12, BENGALURU AND THEY RELATE TO THE ASSESSMENT YEARS 2011-12 TO 2013-14. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD. CIT(A) IN CONFIRMING THE ORD ERS PASSED BY THE A.O. REJECTING THE RECTIFICATION APPLICATIONS FILED U/S 154 OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT] IN ALL TH E THREE YEARS. 2. THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMI TTED THAT THE ASSESSEE IS A DOCTOR BY PROFESSION AND WAS EMPL OYED OUTSIDE INDIA DURING THESE THREE YEARS UNDER CONSIDERATION. THE ASSESSEES ITA NOS.257 TO 259/BANG/2021 DR. RAMESH KRISHNA GOWDA, DUNTHUR PAGE 2 OF 6 STATUS WAS NON-RESIDENT UNDER THE INDIAN INCOME T AX ACT IN THESE YEARS AND ACTUALLY THERE WAS NO NECESSITY TO FILE R ETURN OF INCOME. HOWEVER, THE ASSESSEE FILED RETURNS OF INCOME IN AL L THESE THREE YEARS ON THE ADVICE OF A TAX PRACTITIONER. WHILE FI LING RETURN OF INCOME, THE SALARY EARNED OUTSIDE INDIA WAS DECLARE D UNDER THE HEAD INCOME FROM SALARY EVEN THOUGH THE SAME IS N OT TAXABLE IN INDIA. THE LD. A.R. SUBMITTED THAT THE ASSESSEE DE CLARED THE SALARY EARNED ABROAD UNDER THE HEAD SALARY IN ORDER TO S UBSTANTIATE THE SOURCE OF FUNDS REPATRIATED TO INDIA. HOWEVER, WHI LE COMPUTING THE TAXABILITY, THE ASSESSEE COMPUTED NIL TAX, I.E., NO TAX IS PAYABLE THEREON. HOWEVER, WHILE PROCESSING THE RETURN OF I NCOME U/S 143(1) OF THE ACT, THE CPC RAISED DEMAND OF RS.5,25 ,290/-, RS.33,16,810/- & 17,88,820/- RESPECTIVELY FOR ASSES SMENT YEARS 2011-12, 2012-13 & 2013-14. 3. THE LD. A.R. SUBMITTED THAT THE ASSESSEE HAD FIL ED RETURNS OF INCOME BELATEDLY, I.E., BEYOND THE TIME LIMIT PRESC RIBED U/S 139(1) OF THE ACT AND HENCE HE COULD NOT FILED REVISED RET URNS U/S 139(5) OF THE ACT. IN FACT, THE ASSESSEE SHOWED NIL TAX LIABI LITY IN THE RETURNS OF INCOME, WHICH DEMONSTRATES THAT THE ASSESSEES I NTENTION OF DISCLOSING THE SALARY INCOME UNDER THE HEAD INCOME FROM SALARY. THE LD A.R SUBMITTED THAT THE ASSESSEE CAME TO KNOW OF THE MISTAKE ONLY WHEN HE CONSULTED A NEW CHARTERED ACCO UNT AND FURTHER WHEN THE DEMAND WAS ENFORCED UPON HIM. SUB SEQUENTLY, THE ASSESSEE FILED RECTIFICATION PETITIONS BEFORE C PC FOR THESE THREE YEARS AND THE SAME WAS TRANSFERRED TO THE A.O. FOR DISPOSING THE RECTIFICATION PETITIONS PHYSICALLY. THE A.O. REJEC TED THE RECTIFICATION PETITIONS WITH THE FOLLOWING OBSERVATIONS:- THE ASSESSEE FILED THE RETURNS OF INCOME OF AYS 20 11-12, 2012-13 & 2013-14 DECLARING AN INCOME OF RS.19,68,791/-, RS .94,60,780/- & RS.56,53,214/- RESPECTIVELY. THE RETURNS OF INCO ME WERE PROCESSED BY CPC AND DEMAND OF RS.5,25,290/-, RS.33 ,16,810/- & ITA NOS.257 TO 259/BANG/2021 DR. RAMESH KRISHNA GOWDA, DUNTHUR PAGE 3 OF 6 17,88,820/- WERE RAISED FOR AYS 2011-12, 2012-13 & 2013-14 RESPECTIVELY. NOW THE ASSESSEE HAS FILED A RECTIFICATION APPLICA TION STATING THAT I WAS NRI DURING THE PERIOD UNDER CON SIDERATION AND THE WHOLE INCOME DECLARED IN RETURN OF INCOME WAS T HE INCOME EARNED IN ABROAD. WHILE FILING THE RETURN OF INCOM E, THE PROFESSIONAL WHO HELPED ME IN THE FILING RETURN HAS ERRONEOUSLY OFFERED THE SALARY EARNED ABROAD AS SALARY TAXABLE . FROM THE PERUSAL OF SUBMISSION MADE BY THE ASSESSE E, IT IS SEEN THAT THE ASSESSEE HAD DECLARED THE INCOME AS S ALARY AND HAD NOT CLAIMED ANY EXEMPTION/DEDUCTION/RELIEF IN HIS R ETURNS OF INCOME. SINCE THE ASSESSEE HIMSELF HAD DECLARED TH E INCOME AS TAXABLE AND THERE IS NO MISTAKE APPARENT FROM RECOR D, THE RECTIFICATION PETITION IS REJECTED. YOU ARE REQUES TED TO PAY THE DEMAND MENTIONED ABOVE ALONG WITH INTEREST U/S 220( 2) IMMEDIATELY. 4. THE LD. A.R. SUBMITTED THAT THE LD. CIT(A) ALSO CONFIRMED THE ORDERS PASSED BY A.O. BY HOLDING THAT THE CLAIM OF THE ASSESSEE IS A FRESH CLAIM, WHICH IS NOT ALLOWABLE U/S 154 OF THE ACT. IN AY 2011- 12, THE LD. CIT(A) ALSO HELD THAT THE RECTIFICATION PETITION OF THAT YEAR HAS BEEN FILED BY THE ASSESSEE BEYOND THE LIMI TATION PERIOD OF 4 YEARS AND HENCE THE RECTIFICATION APPLICATION COULD NOT BE ENTERTAINED. THE LD. A.R. SUBMITTED THAT THE A.O. HAS REJECTED THE RECTIFICATION PETITION ONLY FOR THE REASON THAT THE ASSESSEE HIMSELF HAD DECLARED THE INCOME AS TAXABLE AND HENCE THERE IS NO MISTAKE APPARENT FROM RECORD. THE CASE OF THE AO IN AY 201 1-12 WAS NOT RELATED TO THE LIMITATION PERIOD. HE SUBMITTED THAT THE ASSESSEE DID NOT HAVE COPY OF INTIMATION U/S 143(1) FOR AY 2011- 12 AND COLLECTED THE SAME FROM THE ASSESSING OFFICER. IMMEDIATELY, THEREAFTER, THE ASSESSEE FILED RECTIFICATION PETITION BEFORE THE AO FOR ALL THE THREE YEARS. HENCE, IT CANNOT BE SAID THAT THE PETITION F ILED FOR AY 2011-12 WAS BEYOND THE LIMITATION PERIOD, SINCE THE COURTS HAVE HELD THAT THE LIMITATION SHALL START FROM THE DATE OF KNOWLED GE OF THE ASSESSEE. THE LD A.R SUBMITTED THAT IT NOT THE CASE OF THE A. O. THAT THE RECTIFICATION PETITION WAS BEYOND THE TIME LIMIT. HENCE THE LD. ITA NOS.257 TO 259/BANG/2021 DR. RAMESH KRISHNA GOWDA, DUNTHUR PAGE 4 OF 6 CIT(A) WAS NOT JUSTIFIED IN INVOKING THE LIMITATION ISSUE WITHOUT ANALYZING THE FACTS RELATING TO THE SAME. 5. THE LD. A.R. SUBMITTED THAT THE ASSESSEE IS A NON-RESIDENT AND HENCE THE INCOME EARNED OUTSIDE INDIA IS NOT TAXABL E IN INDIA AS PER THE PROVISIONS OF SECTION 5(2) OF THE ACT. HE FURT HER SUBMITTED THAT THERE IS NO ESTOPPEL AGAINST LAW. HENCE, WHAT COUL D NOT BE TAXED UNDER THE INCOME TAX ACT COULD NOT BE SUBJECTED TO TAX BY THE A.O. ON THE REASONING THAT THE ASSESSEE HAS VOLUNTARILY OFFERED THE SAME IN THE INCOME TAX RETURN. THE LD. A.R. SUBMITTED T HAT THE ASSESSEE IS NOT LIABLE TO DECLARE SALARY INCOME EARNED OUTSI DE INDIA FOR TAXATION. HOWEVER, HE HAS ERRONEOUSLY DECLARED THE SAME UNDER THE HEAD INCOME FROM SALARY. AS STATED EARLIER, THE ASSESSEE HAS COMPUTED TAX LIABILITY AS NIL IN THE RETURN OF INCO ME, WHICH FACT PROVES THAT THE SALARY INCOME IS NOT LIABLE FOR TAX ATION IN INDIA. HENCE, SALARY EARNED OUTSIDE INDIA HAS BEEN OFFERED WRONGLY IN THE RETURN OF INCOME AND THE SAME IS A MISTAKE APPARENT FROM RECORD. HENCE THE AO SHOULD HAVE RECTIFIED THE SAME U/S 154 OF THE ACT. ACCORDINGLY, HE SUBMITTED THAT THE MATTER MAY BE RE STORED TO THE A.O. WITH A DIRECTION TO RECTIFY THE MISTAKE. 6. ON THE CONTRARY, THE LD. D.R. SUPPORTED THE ORDE R PASSED BY LD. CIT(A). 7. HAVING HEARD THE RIVAL CONTENTIONS, WE ARE OF TH E VIEW THAT THERE IS MERIT IN THE SUBMISSIONS MADE BY THE LD. A .R. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE I S A NON-RESIDENT. IT IS THE SUBMISSION OF THE ASSESSEE THAT THE SALAR Y INCOME WAS EARNED BY HIM ABROAD AND HENCE THE SAME IS NOT LIAB LE TO TAX UNDER THE ACT U/S 5(2) OF THE ACT. THERE IS MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE A.O. COULD NOT ASSESS AN INCOME, WHICH IS NOT ITA NOS.257 TO 259/BANG/2021 DR. RAMESH KRISHNA GOWDA, DUNTHUR PAGE 5 OF 6 LIABLE TO TAX UNDER THE INCOME TAX ACT EVEN IF IT W AS OFFERED BY THE ASSESSEE IN ITS RETURN OF INCOME. AS RIGHTLY POIN TED OUT BY LD. A.R., THERE IS NO ESTOPPEL AGAINST LAW AND, IN OUR VIEW, THE INCOME ERRONEOUSLY OFFERED IN THE RETURN OF INCOME WOULD C ONSTITUTE MISTAKE APPARENT FROM RECORD. 8. WITH REGARD TO THE POINT OF LIMITATION POIN TED BY LD CIT(A), WE FIND MERIT IN THE SUBMISSIONS OF LD A.R. ACCORDING LY, WE HOLD THAT THE PETITION U/S 154 OF THE ACT WAS FILED IN TIME I N AY 2011-12. 9. ACCORDINGLY, WE SET ASIDE THE ORDERS PASSE D BY LD CIT(A) IN ALL THE THREE YEARS UNDER CONSIDERATION AND RESTORE THEM TO THE FILE OF THE AO TO EXAMINE THE CLAIM OF THE ASSESSEE RAIS ED IN THE PETITIONS FILED U/S 154 OF THE ACT IN ACCORDANCE WI TH THE LAW. 10. IN THE RESULT, ALL THE THREE APPEALS ARE TR EATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH OCT, 2021 SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 6 TH OCT, 2021. VG/SPS ITA NOS.257 TO 259/BANG/2021 DR. RAMESH KRISHNA GOWDA, DUNTHUR PAGE 6 OF 6 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.