Mukesh Kumar, Gurgaon V. ITO, Ward-1(3), , Gurgaon

ITA 4212/DEL/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5563 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 27-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Salary income; Opportunity of being heard; Reasonable cause
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.4212/DEL/2017 ASSESSMENT YEAR : 2011-12 MUKESH KUMAR, S-34/1, FIRST FLOOR, DLF, PHASE-3, GURGAON, HARYANA. VS. ITO, WARD- 1(3), GURGAON, HARYANA. PAN : AKUPK2893B (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. PREETI GOEL, ADV. DEPARTMENT BY : MS. ASHIMA NEB, SR.DR DATE OF HEARING : 02-04-2018 DATE OF PRONOUNCEMENT : 13-04-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 16.12.2016 OF THE CIT(A)- 1, GURGAON RELATING TO AS SESSMENT YEAR 2011-12. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 02.08.2011 DECLARING TAXABL E INCOME OF RS.NIL. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS OBSERVED THAT THE ASSESSEE HAS RECEIVED GROSS SALARY AMOUNTING TO RS.24,09,396/- FROM M/S SAP INDIA PRIVATE LIMITED AS REFLECTED IN THE 26AS OF THE ASSESSEE. HOWEVER, THE ASSESSEE HAS SHOWN TAXABLE SALARY INCOME OF RS. 1,83,525/- IN HIS ITR. THUS, THERE IS A DIFFERENCE OF RS.22,25,871/- BETWE EN THE RECEIPTS REFLECTED IN 26AS AND THE SALARY SHOWN BY THE ASSESSEE. SINCE T HERE WAS NON-COMPLIANCE 2 ITA NO.4212/DEL/2017 FROM THE SIDE OF THE ASSESSEE DESPITE BEING ASKED T O EXPLAIN SUCH DIFFERENCE THE ASSESSING OFFICER PASSED THE ORDER U/S 144 OF THE I .T. ACT AND MADE ADDITION OF RS.22,25,871/- TO THE TOTAL INCOME OF THE ASSESSEE BEING THE DIFFERENCE BETWEEN THE 26AS STATEMENT AND SALARY DECLARED. SIMILARLY, THE ASSESSING OFFICER ALSO MADE ADDITION OF RS.7,801/- BEING THE DIFFERENCE OF INTEREST RECEIPT AS PER THE BANK STATEMENT AND AS DECLARED BY THE ASSESSEE. 3. SINCE THERE WAS A DELAY OF MORE THAN 17 MONTHS I N FILING OF THE APPEAL, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE AS SESSEE. 4. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THE LEARNED CIT(A) HAS IN FACTS AND IN LAW, GRO SSLY ERRED IN NOT CONDONING THE DELAY IN FILING APPEAL AS PER DETAILED EXPLANATION, JUDICIAL PRECEDENTS CITED AND IN THE INTEREST OF JUSTICE. 2. THAT AO/CIT(A) HAVE GROSSLY ERRED IN FACTS AND L AW BY CONFIRMING THE IMPUGNED BEST JUDGEMENT ASSESSMENT ORDER DATED MARC H 28, 2014 ISSUED UNDER SECTION 144 OF THE ACT IN IGNORANCE OF THE SUBMISSI ONS FILED ON THE MERITS OF THE CASE. 3. THAT AO/CIT(A) HAVE GROSSLY ERRED IN FACTS AND L AW IN TAXING THE ENTIRE SALARY INCOME OF THE NON-RESIDENT APPELLANT IN INDIA FOR S ERVICES RENDERED OUTSIDE INDIA. 4. THAT AO/CIT(A) HAVE GROSSLY ERRED IN FACTS AND L AW IN DISALLOWING EXEMPTION CLAIMED UNDER ARTICLE 16(1) OF INDIA-UNITED STATES DOUBLE TAXATION AVOIDANCE AGREEMENT, RESULTING IN DOUBLE TAXATION OF INCOME A S THE NON-RESIDENT APPELLANT RENDERED SERVICES OUTSIDE INDIA ONLY. 5. THAT AO/CIT(A) HAVE GROSSLY ERRED IN FACTS AND L AW IN NOT CONSIDERING THE LOSS FROM HOUSE PROPERTY WHILE COMPUTING THE TOTAL INCOME OF THE APPELLANT. 6. THAT AO/CIT(A) HAVE GROSSLY ERRED IN LAW AND FAC TS IN NOT GRANTING CREDIT FOR THE TAX AMOUNT OF INR 5,93,315 WITHHELD BY SAP INDI A PRIVATE LIMITED DULY EVIDENCED BY THE FORM NO.16 AND FORM 26AS OF THE APPELLANT. 7. THAT AO/CIT(A) HAVE GROSSLY ERRED IN LAW AND FAC TS IN LEVYING INTEREST UNDER SECTION 234D OF THE ACT. 8. THAT AO/CIT(A) HAVE GROSSLY ERRED IN LAW AND FAC TS IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 274 READ WITH SECTION 271 OF THE ACT. THE ABOVE GROUNDS ARE MUTUALLY EXCLUSIVE AND WITHOU T PREJUDICE TO EACH OTHER. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY OR WITHDRAW ANY ONE OR MORE OF THE ABOVE GROUNDS OF APPEAL. 3 ITA NO.4212/DEL/2017 5. LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMI TTED THAT THE ASSESSEE WAS ON INTERNATIONAL ASSIGNMENT TO THE UNITED STATES SI NCE MARCH 2009 AND ONLY SHORT VISITS TO INDIA SINCE THEN. THE ASSESSEE WAS A NON-RESIDENT IN INDIA FOR THE FINANCIAL YEAR 2010-11 AND WAS PRESENT IN INDIA FOR ONLY 30 DAYS. SHE SUBMITTED THAT THE NOTICE U/S 143(2) WAS ISSUED AT THE GURGAO N ADDRESS ON 21.08.2012, HOWEVER, THE SAME WAS NOT RECEIVED BY HIM AS HE WAS OUT OF INDIA. THE NOTICE U/S 142(1) ISSUED ON 05.08.2013 AT GURGAON ADDRESS WAS ALSO NOT RECEIVED BY HIM AS HE WAS OUT OF INDIA. FOR THE FIRST TIME HE RECEIVED THE NOTICE ON 14.03.2014 VIA E-MAIL WHICH WAS COMPLIED VIDE LETTE R DATED 21.03.2014 ENCLOSING BASIS OF CLAIM FOR EXEMPTION UNDER CHAPTE R VIA DEDUCTIONS AND FORM 26AS, BANK STATEMENT ETC. SHE SUBMITTED THAT NO E- MAIL WAS SENT REGARDING THE ISSUE OF ASSESSMENT ORDER. ONLY WHEN THE ASSESSEE VISITED INDIA ON 19.12.2014, HE CAME TO KNOW OF THE ASSESSMENT ORDER FOR THE ASS ESSMENT YEAR 2011-12. SHE SUBMITTED THAT FROM 28.03.2014 TO 19.12.2014, THE A SSESSEE WAS OUTSIDE INDIA ON AN ASSIGNMENT AND HAD NO KNOWLEDGE OF THE ORDER UNT IL HIS VISIT TO INDIA ON 19.12.2014. SHE SUBMITTED THAT FROM 20.12.2014 TO 27.01.2014, THE ASSESSEE WAS IN THE PROCESS OF ANALYZING THE ASSESSMENT ORDE R TO DETERMINE THE NEXT STEPS AS THE TAX OFFICER STARTED PRESSING FOR RECOVERY OF DEMAND. FURTHER, ON 09.01.2015, THE ASSESSEE HAD TO RETURN TO THE US AN D WAS ON FREQUENT BUSINESS/WORK RELATED TRAVEL IN AND AROUND THE US. ON 28.01.2015, A NOTICE U/S 226(3) WAS ISSUED TO THE ASSESSEE WHILE HE WAS IN T HE US. SHE SUBMITTED THAT ON 4 ITA NO.4212/DEL/2017 11.02.2015, AN AMOUNT OF RS.98,840/- WAS AUTOMATICA LLY RECOVERED FROM THE PERSONAL BANK ACCOUNT OF THE ASSESSEE. FURTHER, ON 06.05.2015, AN AMOUNT OF RS.6,48,983/- WAS AUTOMATICALLY RECOVERED FROM THE BANK ACCOUNT OF THE ASSESSEE AND ON 25.06.2015 THE ASSESSEE PAID RS.4,4 8,882/-. BETWEEN 16.07.2015 TO 07.10.2015 THE DOCUMENTS WERE PREPARE D FOR SIGNATURE OF THE ASSESSEE AND FINALLY APPEAL WAS FILED ON 21.01.2016 . WHILE EXPLAINING THE REASON FOR DELAY BETWEEN 08.10.2015 TO 20.01.2016, LD. COUNSEL FOR THE ASSESSEE EXPLAINED THE REASONS FOR THE FREQUENT VISIT TO CLI ENT LOCATION OUTSIDE INDIA AND OTHER PERSONAL DIFFICULTIES. SHE ACCORDINGLY SUBMI TTED THAT IN THE INTEREST OF JUSTICE THE DELAY IN FILING OF THE APPEAL SHOULD BE CONDONED AND THE APPEAL SHOULD BE DECIDED ON MERIT. SHE FURTHER SUBMITTED THAT THE EXEMPTION CLAIMED UNDER ARTICLE 16(1) OF INDO US DOUBLE TAXATION AVOI DANCE AGREEMENT HAS NOT BEEN FOLLOWED RESULTING IN DOUBLE TAXATION OF THE I NCOME. SHE ACCORDINGLY SUBMITTED THAT IN THE INTEREST OF JUSTICE THE MATTE R SHOULD BE ADJUDICATED BY THE LD. CIT(A) ON MERIT BY CONDONING THE DELAY. 6. LD. DR ON THE OTHER HAND SUBMITTED THAT THE INOR DINATE DELAY IN FILING OF THE APPEAL HAS NOT BEEN PROPERLY EXPLAINED FOR WHIC H THE LD. CIT(A) HAS RIGHTLY NOT CONDONED THE DELAY. SHE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE UPHELD AND THE GROUNDS RAISED BY T HE ASSESSEE SHOULD BE DISMISSED. 5 ITA NO.4212/DEL/2017 7. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND IN THE IN STANT CASE THE LD. CIT(A) DID NOT CONDONE THE DELAY ON THE GROUND THAT THE ASSESSEE H AS NOT SATISFACTORILY EXPLAINED THE REASON FOR THE INORDINATE DELAY IN FI LING OF THE APPEAL. IT IS AN ADMITTED FACT THAT THERE WAS A DELAY OF MORE THAN 1 7 MONTHS IN FILING OF THE APPEAL BEFORE THE LD. CIT(A). HOWEVER, A PERUSAL O F THE DETAILS FILED BY THE ASSESSEE IN THE SYNOPSIS EXPLAINING THE REASONS FOR DELAY IN FILING OF THE APPEAL SHOWS THAT THE ASSESSEE WAS A NON-RESIDENT INDIAN F OR THE FINANCIAL YEAR 2010-11 AND WAS PRESENT IN INDIA ONLY FOR 30 DAYS A FACT ST ATED BY THE ASSESSEE AND NOT CONTROVERTED BY THE LD. DR. THE ASSESSEE WAS OUTSI DE INDIA FOR MOST OF THE TIME DURING THE RELEVANT PERIOD I.E. WHEN THE ASSESSMENT ORDER WAS PASSED/RECEIVED BY THE ASSESSEE AND THE DATE OF FILING OF THE APPEA L. ALTHOUGH, THE ASSESSEE WAS PRESENT FOR SOMETIME DURING THE INTERVENING PERIOD DURING WHICH HE COULD HAVE FILED THE APPEAL BEFORE THE LD. CIT(A), HOWEVER, TH E ASSESSEE IN THE INSTANT CASE DOES NOT STAND TO BENEFIT IN FILING OF THE APPEAL L ATE SINCE HIS ACCOUNTS HAVE BEEN ATTACHED BY THE DEPARTMENT AND MONEY RECOVERED FROM HIS ACCOUNT ON DIFFERENT OCCASIONS. CONSIDERING THE TOTALITY OF THE FACTS O F THE CASE AND IN THE INTEREST OF JUSTICE I HOLD THAT THERE WAS A REASONABLE CAUSE IN LATE FILING OF THE APPEAL BEFORE THE LD. CIT(A). I, THEREFORE, RESTORE THE ISSUE TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO CONDONE THE DELAY AND DECIDE THE APPEA L ON MERIT. NEEDLESS TO SAY, THE LD. CIT(A) SHALL GIVE DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND 6 ITA NO.4212/DEL/2017 DECIDE THE ISSUE AS PER FACT AND LAW. I HOLD AND D IRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH APRIL, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 13-04-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI