VARUN VIKRAM SINGH,MUZAFFARNAGAR vs. ITO, MUZAFFARNAGAR

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ITA 5823/DEL/2016Status: DisposedITAT Delhi28 September 2018AY 2012-134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the facts of the case were not properly appreciated by the lower authorities. The issue was restored to the Assessing Officer for a fresh decision after considering all documentary evidence.

What were the facts?

The assessee, an employee of a foreign shipping company, claimed deduction under Section 90/91, stating his income earned outside India was not taxable. The Assessing Officer and CIT(A) denied this, treating the income as taxable.

What were the issues?

Whether income earned by a non-resident from employment outside India is taxable in India, and if the residential status and taxability of such income can be rectified during assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 6,Section 5(2),Section 9,Section 90,Section 91

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’, NEW DELHI

Before: SHRI N. K. BILLAIYA

For Respondent: Shri Surender Pal, Sr. DR
Hearing: 26.09.2018

Date of Hearing : 26.09.2018. Date of Pronouncement : 28.09.2018. ORDER PER: N. K. BILLAIYA, AM

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals], Muzaffarnagar dated 24.08.2016 pertaining to Assessment Year 2012-13.

2. The grievance of the assessee read as under :- 1. “That the Ld. Commissioner of Income Tax(Appeals) and the Assessing Officer have erred in law as well on facts in treating Rs. 16,09.010/- earned as an employee from foreign ship out side India as taxable income because: (a) They have failed to notice that assessee during the year was remained out side for more than 203 days for the purpose of employment hence was non resident u/s 6 of the Income Tax Act. read with Explanation 1(a). (b) They have failed to appreciate that only income received or deemed to be received or accrues or arises or deemed to accrue or arise in India is taxable of the non resident u/s 5(2) read with section 9 of the Income Tax Act. but not any income earned out side India.

2.

That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in treating the rectification of defect/mistake in the return as revised return because: (a) Residential Status of an individual is fact and can be rectified any time as assessee/appellant was out of India for more than 203 days he has to be treated as non- resident as per section 6. (b) Income earned out side India by the non-resident is not taxable in India and this fact has to be brought on record being also a mistake and so can be rectified.”

3.

During the course of the scrutiny assessment proceedings the Assessing Officer noticed that the assessee has claimed deduction u/s 90/91 of the Act. The assessee was specifically asked to explain and justify his claim of deduction. In his reply the assessee submitted that he is an NRI and is working in Merchant Navy. It was explained that by mistake his NRI income has been offered for taxation which in actual did not come within the purview under taxation in India.

4.

The explanation of the assessee did not find any favour with the Assessing Officer deduction u/s 90/91 was denied. Assessee carried the matter before the CIT(A) but without any success.

5.

Before us the counsel for the assessee stated that the mistake in the return of income was rectified during the course of assessment proceedings and it was explained that income from salary as not taxable in India. It is the say of the counsel that facts have not been appreciated by the lower authorities.

6.

The DR supported the findings of the Assessing Officer.

7.

I have carefully considered the orders of the authorities below. There is no dispute that the assessee is working in foreign shipping company as a salaried employee. It appears that the assessee remained on duty for 203 days out of country. It further appears that the facts of the case have not been properly appreciated by the Assessing Officer. In the interest of justice and fair play I restore this issue to the files of the Assessing Officer. The Assessing Officer is directed to decide the issue afresh after considering all the documentary evidences brought on record by the assessee. The assessee is directed to furnish all the relevant details to justify his claim.

8.

In the result, the appeal filed by the assessee is treated as allowed for statistical purpose.

Order pronounced in the open court on 28.09.2018.

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