The Dy. Commr. Of Income Tax, Cir.-1, JAMNAGAR V. Shri Bipin Bihari Shrivastav, JAMNAGAR

ITA 591/RJT/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7751 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 03-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: USHA N SHROTE
• Assessee Lawyers: SANJEEV BUDDH
• Keywords: Salary income; Double taxation relief; Earning of tax free income; Services rendered outside India; Revised return

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT [CONDUCTED THROUGH E COURT AT AHMEDABAD] BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.591/RJT/2015 / ASSTT. YEAR: 2012-13 DCIT, CIR.1 JAMNAGAR. VS SHRI BIPIN BIHARI SHRIVASTAV 102, KING PALACE 10 PATEL COLONY, JAMNAGAR. ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SMT.USHA N. SHROTE, SR.DR ASSESSEE BY : SHRI SANJEEV BUDDH, AR / DATE OF HEARING : 01/02/2018 / DATE OF PRONOUNCEMENT: 11/04/2018 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF THE LD.CIT(A), JAMNAGAR DATED 31.3.2015 PASSED FOR ASSTT.YEAR 2012 -13. 2. THOUGH THE REVENUE HAS TAKEN SIX GROUNDS OF APPE AL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. LTD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS.53,01,888/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HIS RETURN OF INCOME 18.6.2013 DECLARING TOTAL INCOME AT RS.57,95 ,952/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAI MED RELIEF UNDER SECTIONS 90/91 OF THE INCOME TAX ACT ON THE GROUND THAT HE I S A NON-RESIDENT INDIAN, WHO STAYED IN INDIA FOR 53 DAYS ONLY IN THE SAID AC COUNTING PERIOD AND FOR ITA NO.591/RJT/2015 2 REMAINING PERIOD HE STAYED OUTSIDE INDIA IN THE COU RSE OF EMPLOYMENT. FOR BUTTRESSING HIS CONTENTIONS HE SUBMITTED COPY OF PA SSPORT, BANK STATEMENT AND CERTIFICATE FROM EMPLOYER. THE ASSESSEE FURTHER CO NTENDED THAT HE WAS NOT WELL CONVERSANT WITH PROVISIONS OF INCOME TAX ACT, 1961 AND DISCLOSED INCOME OF RS.57,95,952/- WHICH INCLUDES INCOME FROM FOREIGN COUNTRY I.E. RS.53,01,888/- AS SALARY INCOME. THE LD.AO DID NOT ENTERTAIN EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE SHOULD HAVE FILED REVISED RETURN IN RESPECT OF CLAIM OF DEDUCTION. ON APPEAL BEFORE TH E LD.CIT(A), THE LD.COUNSEL FOR THE ASSESSEE HAS MADE DETAILED WRITTEN SUBMISSI ON WHICH WERE NOTICED BY THE LD.CIT(A) AS UNDER: 'FACTS OF CASES NOT VERIFIED AND WRONGLY CONCLUDED: 1. THE ASSESSEE IS A NON RESIDENT INDIAN, WHO STAYE D IN INDIA FOR 53 DAYS IN INDIA IN THE SAID YEAR AND HAD SERVED OU TSIDE INDIA IN THE COURSE OF HIS EMPLOYMENT OUTSIDE INDIA AND THUS ENJ OYS STATUS OF NON RESIDENT IN INDIA, MAKING HIS INCOME NON TAXABLE IN INDIA. COPY OF PASSPORT, BANK STATEMENT AND CERTIFICATE FROM EMPLO YER IS ATTACHED HEREWITH FOR YOUR PERUSAL. 2. IN INCOME TAX RETURN, ASSESSEE NOT BEING WELL VE RSED WITH THE PROVISIONS OF THE SAID ACT HAD DISCLOSED THE INCOME OF RS. 57,95,952/- WHICH INCLUDES INCOME OF FOREIGN COUNTRY (I.E. RS. 53,01,888/-) WHICH IS NOT ACTUALLY AR. INCOME TO BE TAXED IN INDIA AND THUS WOULD NOT HAVE FORMED PART OF INCOME TAX RETURN. HE ALSO CLAIMED R ELIEF U/S 90/91 FOR INCOME BEING NON TAXABLE IN INDIA. WHICH IS ALSO NO T REQUIRED AS INCOME IS FULLY NON TAXABLE IN INDIA. 3. ASSESSEE VIA VARIOUS SUBMISSIONS SUBMITTED THE E VIDENCES OF HIS STAY OUTSIDE INDIA ON PARTICULAR PROJECT, WHEREIN EVIDEN CES INCLUDES PASSPORT SHOWING HIS PRESENCE IN INDIA SUMMING UPTO 53 DAYS, AND CERTIFICATE OF EMPLOYER CERTIFYING HIS FOREIGN DEPU TATION AND SALARY PAID TO HIM OUTSIDE INDIA IN THAT YEAR. 4. FURTHERMORE, EVIDENCES INCLUDES COPY OF BANK NRE ACCOUNT, FOR THE SALARY CREDITED TO ASSESSES' ACCOUNT WHICH WAS PAID IN FOREIGN CURRENCY TO HIM DURING HIS DEPUTATION. ITA NO.591/RJT/2015 3 5. TO THE ABOVE AO BEING DEPRIVED OF THE POWERS UN DER THE ACT TO AMEND THE RETURN FILED BY ASSESSEE, EXCEPT BY WAY O F REVISED RETURN, AND FOR THE SAME HE PLACES RELIANCE ON GOETZE (INDI A) LTD. V/S. COMMISSIONER OF INCOME-TAX [284 ITR 323] WHEREIN AO S POWER TO ENTERTAIN THE CLAIM OF DEDUCTIONS OTHERWISE BY WAY OF REVISED RETURN. BUT THE QUESTION IN THE SAID CASE IS NOT ABOUT ALLO WING RELIEF U/S 90/91. THE FACT IS, INCOME BY NON RESIDENT ASSESSEE WHO SE RVED OUTSIDE INDIA, AND IS EARNED DURING HIS STAY OUTSIDE INDIA AND HEN CE IS NOT LIABLE TO TAX IN INDIA AT ALL. THUS THE SAME CANNOT BE TAXED AT ALL. 6. AO VIDE HIS ASSESSMENT ORDER HAS STILL CHARGED S UCH INCOME TO BE TAXABLE IN THE HANDS OF EMPLOYEE. THE /ASSESSEE BEI NG NON RESIDENT INDIAN, INCOME EARNED OUTSIDE INDIA (CREDITED TO NR E ACCOUNT), SERVICE PROVIDED OUTSIDE INDIA IS NOT LIABLE TO BE CHARGED TO TAX. HENCE, AO HAD ERRONEOUSLY CHARGED THE SAID INCOME T O THE TAX. THE ASSESSEE IS APPEARANTLY A NON RESIDENT INDIAN IN TH E SAID YEAR, HENCE, HIS INCOME SHALL NOT BE CHARGED TO TAX. 7. MOREOVER, SIMILAR CASE IS OBSERVED BY THE ITAT BENCH IN CASE OF EMPLOYEES OF TCS LIMITED VIDE ITA NO. 915/KOL/2010 - AY 2006-07, WHEREIN EMPLOYEES WERE DEPLOYED OUTSIDE INDIA ON TE MPORARY PROJECT AND THEIR SALARY COMPENSATION WAS PAID FOR BEING DE PLOYED ON FOREIGN DEPUTATION, WHICH WERE HELD TO BE EXEMPT UNDER SECT ION 10(14)(1). CASE ATTACHED HEREWITH FOR YOUR PERUSAL. 8. IN THE CASE OF ASSESSEE THERE IS SAME LINE OF QU ESTION AS TO SALARY FORMING PART OF FOREIGN INCOME IS TAXABLE SALARY IN INDIA AND EMPLOYEE BEING NON RESIDENT AND EMPLOYED OUTSIDE IN DIA, AND GETTING SALARY OUTSIDE INDIA, IS NOT LIABLE TO TAX IN INDIA . HENCE WHEN INCOME UNDER CONSIDERATION IS NOT ACTUALLY A TAXABLE INCOM E, IT SHOULD NOT BE CHARGED TO TAX IN INDIA. SIMILAR CASE IS OBSERVED V IDE [ 239 CTR 107 (KAR.)] WHEREIN, IT IS VERY CLEAR THAT PERSON RESID ING OUT OF INDIA AND SERVING OUT OF INDIA AS PER THE PROVISION OF THE IT ACT, IS NON RESIDENT IN INDIA AND CANNOT BE CHARGED TO TAX EVEN ON IMPLI CATIONS. 9. FURTHER MORE, THE INCOME BEING NON TAXABLE IN T HE HANDS OF ASSESSEE IN INDIA, QUESTION OF BEING FALLING UNDER DTAA PROVISIONS IS IRRELEVANT, AS ABSURDLY ADDRESSED BY AO. 10. THE ASSESSEE BEING UNAWARE OF THE LAW FILL ED THE RETURN WITH MISTAKE OF REPRESENTING THE SAID EXEMPT INCOME. DIS CLOSING INCOME UNDER WRONG HEAD / SECTION DUE TO LACK OF KNOWLEDGE OF THE ASSESSEE, WHICH IS ACTUALLY DISCLOSED AND NOT CONCEALED OR HI DDEN, CANNOT BE ITA NO.591/RJT/2015 4 TREATED AS ADDITIONAL INCOME. MISTAKES ARE HUMAN TE MPERAMENT AND HENCE, LAW OF JUSTICE AND PRINCIPLE OF REASONABILIT Y SHOULD BE APPLIED BY AUTHORITIES WHILE DECIDING THE FINDINGS OF THE C ASE AND KEEPING THE INTENTIONS OF LENIENCY BEHIND THE FORMATIONS OF THE ACT INTACT, AS NO LAW IS CREATED TO HARM ASSESSEE BUT TO BRING THE EASINE SS TO BOTH I.E. ASSESSEE AND ASSESSOR. 11. HENCE IN THE CONTEXT OF THE ABOVE DISCUSSI ON, WITH FULL FAITH, WE RELY THAT YOUR HONOR WILL TAKE A DEEP LOOK AT THE P ROBLEM UNDER CONSIDERATION. AND WILL NOT LET THE ASSESSEE BE DEP RIVED OF HIS RIGHTS. OUR PRAYER 12. IN THE LIGHT OF THE FACTS AND CIRCUMSTANCE S DISCUSSED HERE-IN- ABOVE AND OUR SUBMISSION ON MERIT, WE VERY HUMBLY P RAY AND REQUEST YOUR HONOR TO APPRECIATE AND HOLD THAT THE ADDITION /DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF A. SALARY ON FOREIGN DEPUTATION - FULLY TAXABLE I N THE HANDS OF NON RESIDENT IS WITHOUT CONSIDERING THE APPROPRIATE FACTS, AND A PPRECIATION OF FACTS ALREADY AVAILABLE ON THE RECORDS AS WELL AS SUBMITT ED DURING THE COURSE OF ASSESSMENT AND APPLICATION OF VARIOUS PROVISION OF ITA AND THEREFORE IS NON-JUDICIOUS AND UNTENABLE IN LAW, THUS NEEDS D ELETION. 4. THE LD.CIT(A) HAS ACCEPTED THE CONTENTIONS AND O F THE ASSESSEE AND DELETED ADDITION. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. THE LD.CIT(A) HAS OBSERVED THAT OF THE LD.AO HAS PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE SUPREME COU RT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT, 284 ITR 323 FOR NOT TAKING CO GNIZANCE OF THE ASSESSEES SUBMISSIONS. ACCORDING TO THE AO HE COULD NOT TAKE COGNIZANCE OF THE CONTENTIONS MADE BY THE ASSESSEE UNLESS A REVISED R ETURN IS BEING FILED. THE LD.CIT(A) HAS OBSERVED THAT THIS JUDGMENT HAS NOT P UT ANY RESTRICTION ON APPELLATE AUTHORITIES FOR TAKING INTO CONSIDERATION FRESH CLAIM MADE BY AN ITA NO.591/RJT/2015 5 ASSESSEE WHICH IS TENABLE IN LAW. A PERUSAL OF THE ABOVE DETAILS WOULD INDICATE THAT THE ASSESSEE WAS NON-RESIDENT DURING THE YEAR. HE HAS EARNED SALARY INCOME IN A FOREIGN COUNTRY AND IT WAS NOT T AXABLE IN INDIA. BY AN INADVERTENT MISTAKE, HE HAS INCLUDED THAT AMOUNT IN THE RETURN OF INCOME WHICH SOUGHT TO BE RECTIFIED BY FILING SUBMISSIONS. TO OUR MIND, THE LD.CIT(A) HAS RIGHTLY TAKEN COGNIZANCE OF THIS FACT , AND HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. AFTER GOING THROUGH THE ORDER OF THE LD.CIT(A) WE DO NOT SEE ANY INFIRMITY IN HIS ORDER ON THIS ISSUE , AND ACCORDINGLY UPHELD THE SAME. THE APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 11 TH APRIL, 2018 AT AHMEDABAD. SD/- SD/- ( PRAMOD KUMAR ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER