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Facts
The assessee, an individual, declared Rs. 25,26,810 income initially, then revised it to Nil. The AO treated the assessee as 'resident' and made an addition of Rs. 29,01,810. The CIT(A) upheld the addition. The assessee appealed, claiming 'resident but not ordinary resident' status and that income earned abroad is not taxable in India.
Held
The Tribunal admitted additional evidence presented by the assessee, as it was crucial for determining the residential status and the taxability of foreign income. Since the CIT(A) had not dealt with the merits of the case with this evidence, the issue was remitted back to the CIT(A).
Key Issues
Whether the assessee's residential status was 'resident' or 'resident but not ordinary resident', and consequently, whether the income earned outside India was taxable in India.
Sections Cited
143(3), 250, 6(1)(c), 6(6)(a), 80C, 80CCD, 80D, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD
आदेश / ORDER This appeal at the instance of assessee pertaining to the Assessment Year 2017-18 is directed against the order dated 07.01.2025 of Addl/JCIT(A), Agra passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the Assessment Order dated 24.12.2019 passed u/s.143(3) of the Act.
Assessee has raised following grounds of appeal :
1. “1. The CIT(A)-NFAC erred in law and facts in upholding the addition made by the learned AO amounting to Rs.29,01,810/- by holding the residential status of appellant as "Resident" and further disallowing the deduction claimed under Chapter VI-A of the ITA, 1961 amounting to Rs.2,40,551/-.
2. The appellant contends that the addition of Rs. 29,01,810/- to the salary income was made, without considering that, appellant holds the status of "Resident but Not Ordinary Resident" by fulfilling conditions of Section 6(1)(c) and 6(6)(a) of ITA, 1961. Hence, the income earned outside India by appellant being employed with V Ship Asia Group Pte Ltd. (Singapore) as a Chief engineer on a foreign bound ship and hence not liable to be taxed in India.
The learned CIT(A) erred in law and on facts by not considering the submission made by the appellant in its entirety by not appreciating that, the deductions claimed under Chapter VI-A of ITA, 1961 amounting to Rs.2,40,000/- being –
-80C of ITA, 1961 for PPF contribution amounting to Rs. 1,50,000/- -80CCD of ITA, 1961 towards national pension scheme amounting to Rs. 50,000/- -80D of ITA, 1961 towards Mediclaim premium amounting to Rs. 40,000/- are bonafide and genuine payments made from banking channels, and ought to have been allowed as deductions.
4. The appellant contends that, the donation made to "Prem Prakash Gupta Charitable trust" amounting to Rs.1,20,000/- is a bonafide and genuine transaction made through the banking channel via cheque payments and ought to have been allowed as deduction.
Appellant craves leave to add/ alter/ delete/ modify, all/ any of the above grounds of appeal.
3. At the outset, Ld. Counsel for the assessee referring to the following statement requested for admitting the additional evidences which have a substantial bearing to establish the residential status of assessee :
“Hearing for the above-referred appeal is scheduled on 19/06/2025. The key issue in this appeal pertains to the determination of residential status of Appellant and taxation of salary earned outside India.
Appellant filing Paper Book-1 which contains certain additional evidences. These documents are submitted to address issues in appeal. These documents have their own peculiarities as stated below:
Sr. Additional Attached as Justification No. Evidences in the Paper Book-I 1 Contract of IV(a) During the time of Employment assessment proceedings and 2 Passport for FY IV(b) CIT(A) proceedings, the appellant was serving his 2007-08 to FY employment on a ship, and 2016-17 had very limited access to data and mobile/email. Hence, appellant was unable to ensure completeness of information submitted to the IT-Authorities due to his frequent travel due to employment.
Further, documents submitted as additional evidence are pre-existed prior to assessment proceedings, and are essential to establish the residential status of Appellant.
Appellant requests the Honourable ITAT Bench to permit the production of documents submitted vide Paper-Book-I. Paper-Book-I contains documents that will help the Hon'ble Bench to reach a cogent conclusion. All these above-referred documents in Paper- Book-I, have a substantial bearing on the case. These documents are documents which could not be filed earlier and are essential to establish the residential status of Appellant.
The appellant prays that in the interest of justice, the additional evidence may be admitted and the issue may be decided after considering the additional evidences. The appellant relies on the ratio laid by the Hon'ble Supreme Court in the case of Tek Ram vs CIT (2013) 357 ITR 133/(2014) 44 taxmann.com 367 (SC) wherein it was held that where documents filed by the assessee before Court had some relevance, the same should be considered while deciding the appeal.
Kindly permit the appellant to produce these documents and oblige.”
Ld. Departmental Representative did not oppose to this request.
5. I have heard the rival contentions and perused the record placed before me. Assessee is an individual and furnished return of income for A.Y. 2017-18 on 26.07.2017 declaring income of Rs.25,26,810/- which was subsequently revised declaring Nil income. Residential status of the assessee mentioned by the Assessing Officer is ‘resident’ but not ‘ordinary resident’. Assessment u/s.143(3) of the Act has been completed making addition of Rs.29,01,810/- for the income from salary/pension shown in the original return but thereafter not shown in the revised return. Assessee challenged the addition before ld.CIT(A) but failed to furnish necessary details. Before me, Ld. Counsel for the assessee has made a request to admit the additional evidences so as to prove the residential status of the assessee and that the income earned by the assessee outside India for A.Y. 2017-18 is not taxable in India. Along with this request assessee has also filed a paper book running into 65 pages. I therefore considering the facts of the case admit the additional evidences. Since all these details goes to the root cause and substantial bearing to the addition made by ld. AO and that ld.CIT(A) has not dealt with merits of the case, I deem it appropriate to remit the issue back to the file of ld.CIT(A). Assessee is at liberty to adduce all these evidences filed before ld.CIT(A) and ld.CIT(A) shall after examining the details pass a speaking order as contemplated u/s.250(6) of the Act after providing reasonable opportunity of hearing to the assessee. Assessee is directed to provide updated email id and contact detail to the department for receiving the notices from ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and the effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 25th day of June, 2025.