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Facts
The Revenue filed an appeal against the order allowing double taxation relief to the assessee for income taxed in India and Indonesia. The assessee claimed relief under the DTAA for advance tax paid in Indonesia, which was initially accepted by the AO but later rectified under Section 154.
Held
The Tribunal noted that the residential status of the assessee was central to determining eligibility for relief under Article 23(2) of the DTAA. The matter was restored to the AO to ascertain the residential status and decide accordingly.
Key Issues
Whether the assessee is eligible for DTAA benefits when their residential status is disputed, and whether a Section 154 rectification is permissible for such a dispute.
Sections Cited
154, 143(3), 90, 90A, 23(2)
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the Revenue for Assessment Year (AY) 2016-17 arises out of the order of Learned Commissioner of Income Tax, Appeal, Chennai-16 [hereinafter “CIT(A)”] dated 21.03.2024 in the matter of assessment framed by the Assessing Officer [AO] u/s. 154 r.w.s 143(3) of the Income-tax Act,1961 (hereinafter “the Act”) on 06.07.2022.
The only ground of appeal in this appeal of Revenue is against directing the A.O to grant double taxation relief on the tax paid in respect of same income of the assessee taxed both India and Indonesia in the rectification order passed on 06.07.2022.
1. 3. The assessee has filed his return of income on 24.09.2016 showing total income of Rs. 1,65,06,570/-. The assessee has claimed relief of Rs. 47,08,992/- u/s. 90/90A of the Act under DTAA between India and Indonesia in respect of advance tax paid in Indonesia. The A.O in the assessment order passed u/s. 143(3) has accepted the return. However, the A.O has rectified the above order u/s. 154 of the Act denying the relief u/s. 90/90A of the Act. The assessee filed an appeal before Ld. CIT(A). The Ld. CIT(A) has noted that the assessee is resident in India and tax has been paid by him in respect of profit or income arising in Indonesia and the said profit of income has been subjected to tax both in India and Indonesia. The Ld. CIT(A) therefore, held that the assessee is to be given credit of Indonesia tax paid u/s. 92 of the Act r.w.s 23(2) of the DTAA between India and Indonesia.
The Revenue is in appeal raising the ground that the assessee is not eligible to claim relief under Article 23(2) since the assessee is a non- resident of India.
The Ld. Authorized Representative (A.R) of the assessee has argued that the assessee is a resident in India and the A.O has wrongly held him non-resident. The Ld. AR has further argued that the assessee is eligible for DTAA benefit on the same income taxed in the two countries and the A.O has correctly allowed the same in assessment order passed u/s. 143(3) of the Act, which cannot be called mistake apparent from record and rectified u/s 154 of the Act.
The Ld. Departmental Representative (DR), on other hand, supported the order of A.O and argued that DTAA benefit is not available to assessee.
We have heard the rival submissions, and perused the materials available on record. The Revenue has raised the ground that the assessee, being a non-resident is not eligible to claim relief under Article 23(2) of the DTAA between India and Indonesia. The Ld. AR has contended that the assessee is a resident based on his stay in the country. As the issue of residential status is central in determining eligibility for relief under Article 23(2) of the DTAA, the matter is restored back to the file of A.O. The A.O is directed to ascertain the residential status of the assessee and decide the issue accordingly. In view of the above, the appeal filed by the Revenue is allowed for statistical purposes only.
In the result, the appeal filed by the Revenue is allowed for statistical purposes.
Order pronounced on 14th February, 2025.