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Income Tax Appellate Tribunal, “SMC-C” BENCH : BANGALORE
Before: SHRI JASON P BOAZ
This appeal by the assessee is directed against the order of CIT(A)-11, Bangalore, dated 08.02.2019 for Assessment Year 2013-14.
Briefly stated, the facts of the case relevant for disposal of this appeal are as under:-
2.1 The assessee, an individual, filed her return of income for Assessment Year 2013-14 on 30.03.2014 declaring income of Rs.29,48,650/-. The case was selected for scrutiny for this year. In the course of assessment proceedings, it was noticed that the assessee filed revised computation sheet and had additionally claimed relief of Rs.7,20,892/- under section 90/91 of the Income Tax Act, 1961 (in short ‘the Act’). On being queried in this regard by the Assessing Officer (AO), the assessee admittedly furnished her reply vide letter dated 21.11.2015 (which has been extracted at para 3.1 of the impugned order of assessment). The AO, however, completed he assessment under section 143(3) of the Act vide order dated 27.11.2015 accepting the assessee’s returned income of Rs.29,48,650/-; without considering the assessee’s additional claim for relief under section 90/91 of the Act raised by way of a revised computation put forth in the course of assessment.
2.2 Aggrieved by the order of assessment dated 27.11.2015 for Assessment Year 2013-14, the assessee preferred an appeal before the CIT(A)-11, Bangalore, raising, inter alia, the issue of non-consideration of the assessee’s additional claim for relief under section 90/91 of the Act on DTAA in respect of the salary income of Rs.7,20,892/- earned by her as an NRI for services rendered abroad when employed with M/s. Centurion Consulting F2E in Dubai (UAE). The CIT(A) rejected the assessee’s claim by relying on the decision of the Hon’ble Apex Court in the case of Goetze (India) Ltd., reported in 284 ITR 323 (2006) and dismissed the assessee’s appeal vide order dated 08.02.2019.
The assessee, being aggrieved by the order of CIT(A)-11, Bangalore, dated 08.02.2019 for Assessment Year 2013-14, the assessee has preferred this appeal wherein she has raised the following grounds:-
The orders of the authorities below in so far as they are 1. against the appellant, are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.
The learned CIT[A] is not justified in upholding the 2. assessment of Rs.29,48,650/- as the total income of the appellant without appreciating that the appellant had erroneously reported the salary earned from employment outside India and claimed relief u/s. 90 of the Act in the original return of income, which error was discovered later and a revised computation of income in the status of NRI was also filed by the appellant before completion of the assessment proceedings under the facts and in the circumstances of the appellant's case. The learned CIT[A] ought to have appreciated that the 3. correct residential status of the appellant was non-resident and hence, the learned A.O. had erred in assessing the appellant on the income as reported in the return of income, which return filed was contrary to the provisions of the Income-tax Act and hence, ought not to have been accepted under the facts and in the circumstances of the appellant's case. The learned CIT[A] ought not to have refused to consider the 4. revised computation filed by the appellant before the A.O. in course of assessment having regard to the judgement of the Hon'ble Supreme Court in the case of Goezte India Pvt. Ltd. reported in 284 ITR 323 [SC] under the facts and in the circumstances of the appellant's case. Without prejudice to the right to seek waiver with the Hon'ble 5. CCIT/DG, the appellant denies herself liable to be charged to interest u/s. 234-A, 234-B and 234-C of the Act, which under the facts and in the circumstances of the appellant's case and the levy deserves to be cancelled. For the above and other grounds that may be urged at the time of 6. hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.
4.0 Ground Nos.1 and 6 are general in nature and no adjudication is called for thereon.
Ground No.5 – Charging of interest under section 234A, 234B and 234C of the Act.
5.1 In this ground (supra), the assessee denies herself liable to be charged interest u/s 234A, 234B and 234C of the Act. The charging of interest is consequential and mandatory and the AO has no discretion in the matter. This proposition has been upheld by the Hon’ble Apex Court in the case of Anjum H. Ghaswala (252 ITR 1) (SC) and I, therefore, uphold the action of the AO in charging the assessee the aforesaid interest u/s 234A, 234B and 234C of the Act. The AO is, however, directed to re-compute the interest chargeable u/s 234A, 234B and 234C of the Act, if any, while giving effect of this order.
Ground Nos.2 to 4 : Non-adjudication of grounds raised by assessee 6.1.1 In these grounds (supra), the assessee contends that the CIT(A) erred in refusing to consider the claim put forth by the assessee by way of revised computation filed in the course of assessment proceedings before the AO; i.e., the grant of relief sought by the assessee as per the provisions of section 90 of the Act on DTAA in respect of salary of Rs.7,20,892/- earned by her as an Non-resident Indian (NRI). According to the learned AR for the assessee, the CIT(A), in the impugned order, has dismissed the assessee's appeal by merely holding that the assessee's additional claim for relief under section 90 of the Act was rightly ignored by the AO in view of the decision of the Hon'ble Apex Court in the case of Goetze (India) Ltd., (Supra) since the said claim was neither made in the original return of income filed nor by way of a revised return of income. On realization of this inadvertent mistake, the assessee put forth the said claim for relief under section 90 of the Act in respect of salary income of Rs.7,20,892/- or under DTAA before the AO in the course of assessment proceedings by way of a revised computation; which claim was not considered by the AO.
6.1.2 It is contended that the CIT(A) instead of considering the assessee's claim for relief under section 90 of the Act in respect of salary earned as NRI or under DTAA on merits, summarily dismissed the assessee's claim holding the action of the AO in ignoring the assessee's claim to be in order, in view of the decision of the Hon'ble Apex Court in the case of Goetze (India) Ltd., (284 ITR 323). The learned AR contended that the decision of the Hon'ble Apex Court in the case of Goetze (India) Ltd., (Supra) does not place fetters on the appellate authorities to entertain fresh claims put forth by the assessee which are a part of record and/ or are material for the purpose of assessing the correct tax liability of an assessee in accordance with law. It was further submitted that the Hon'ble Apex Court in the case of NTPC Ltd., (229 ITR 383) had held that a taxpayer may make a fresh claim or modify a claim at any stage of proceedings so that the assessing authority can correctly assess the tax liability in accordance with law. In this regard reliance was also placed on the following judicial pronouncements:-
(i) CIT Vs. Motor Industries Co. Ltd., (229 ITR 137) (Kar) (ii) CPG Consultant India Pvt. Ltd. (ITA No.1596/Bang/2016 da. 31/5/2017); (iii) Pruthvi Brokers & Shareholders Pvt. Ltd., (2011) 349 ITR 336 (Bom)
6.2 The learned DR for Revenue supported the orders of the authorities below.
6.3.1 I have heard the rival contentions and perused and carefully considered the material on record; including the judicial pronouncements cited. The facts of the case, as emerge from the record, are that in the course of assessment proceedings the assessee by way of revised computation raised an additional claim for relief under section 90/91 of the Act or under DTAA in respect of salary income earned in the status of an NRI in the year under consideration. The AO ignored the aforesaid claim put forth by the assessee.
6.3.2 On a perusal of the impugned order, I find that the CIT(A) rejected considering the assessee's claim on this issue without dealing with the grounds raised on the merits of the issue. The CIT(A) dismissed the assessee's claim and upheld the action of the AO by relying on the decision of the Hon'ble Apex Court in the case of Goetze (India) Ltd., (Supra). In my considered view, this decision of the Hon'ble Apex Court in the case of Goetze (India) Ltd., (Supra) does not place fetters on the appellate authorities to entertain fresh claims put forth by the assessee on issues which are a part of record, and/or are material for the purpose of assessing the correct tax liability of the assessee in accordance with law. I am therefore, of the considered opinion that it was incumbent for the CIT(A) to have examined the assessee's additional claim for relief under section 90 of the Act or under DTAA in view of the grounds raised before him and particularly when the relevant material is part of the records of assessment as this claim admittedly was put forth before the AO in assessment proceedings. In coming to this view, support is drawn from the ratio laid down in the decision of the Hon'ble Apex Court in the case of NTPC Ltd., (229 ITR 383); of the Hon'ble Karnataka High Court in the case of CIT Vs. Motor Industries Co. Ltd., (229 ITR 137) and of the co-ordinate bench of this Tribunal in the case of CPG Consultants India Pvt. Ltd., Vs. DCIT (ITA No.1596/Bang/2016 dt. 31/5/2017). In this factual and legal matrix of the case, as discussed above, I set aside the impugned order of the CIT(A) on this issue and after admitting the grounds raised by the assessee on its claim for being granted relief under section 90 of the Act or under DTAA in respect of salary of Rs.7,20,892/- earned as NRI, restore the matter to the file of the CIT(A) for examination, verification and adjudication on merits, after affording both the assessee and the AO adequate opportunity of being heard in the matter and to file details/submissions required in this regard. Consequently, ground Nos.2 to 4 raised by the assessee are allowed for statistical purposes. Since these grounds by the assessee raised on merits with regard to its claim for grant of relief under section 90 of the Act or under DTAA have been restored for consideration and adjudication on merits to the file of the CIT(A) as per the findings in paras 6.3.1 and 6.3.2 of this order (Supra), it is not deemed appropriate to adjudicate these grounds raised by the assessee in this appeal on merits.
In the result, the assessee's appeal forAssessment Year 2013-14 is partly allowed for statistical purposes.
Order pronounced in the open court on this 3rd day of July, 2019.