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Income Tax Appellate Tribunal, KOLKATA BENCH “C” KOLKATA
Before: Shri S.S. Godara & Dr. A.L. Saini
Shri, Gautam Banerjee, Advocate & अपीलाथ� क� ओर से /By Applicant Shri A.N. Chatterjee, AR Shri Supriyo Pal,JCIT,SR-DR !"यथ� क� ओर से / By Respondent 18-10-2019 सुनवाई क� तार�ख / Date of Hearing घोषणा क� तार�ख / Date of Pronouncement 20-11-2019 आदेश / ORDER PER S.S.Godara, Judicial Member:- This assessee’s miscellaneous application filed u/s. 254(2) of the Income Tax Act, 1961, in short ‘the Act’ seeks to recall / rectify the tribunal’s order dated 28.02.2019 dismissing the main appeal on account of non prosecution since nobody had appeared in the main case hearing. Heard both the parties. Case file perused.
MA No181/Kol/2019 & Dr. Kamal Kar. vs. ACIT (In respect to.Taxation)-1(1), Kol Page 2 2. It emerges at the outset that the assessee miscellaneous application suffers from nine days’ delay in filing. Learned departmental representative submits that there is no provision under the Act to condone such a delay in filing of a miscellaneous application u/s. 254(2) of the Act and therefore, same deserves to be dismissed on this count alone. We see no reason to accept the Revenue’s instant arguments. This tribunal’s co-ordinate bench’s decision in M/s. Maa Tara Agro Industries vs. I.T.O. Ward-4, Murshidabad in M.A. 179/Kol/2018 decided on 21.12.2018, after taking into consideration of the hon’ble Delhi high court’s decision Om Prakash Sangwan vs ITO (2018) 94 taxmann.com 394 (Delhi) holds that time limitation is not applicable for appeals which were dismissed for non-prosecution. We observe in these facts that the application of the assessee is not barred by limitation since the above delay provision does not apply in case of an ex parte order dismissing the main appeal in absence of either of the parties. We thus decline the learned authorized representative’s technical arguments and admit the assessee’s miscellaneous application for adjudication on merits.
Coming to assessee’s averments in his miscellaneous application that there was no actual service of notice of hearing in his appeal, there is no rebuttal coming from the Revenue side as per records. We therefore accept the assessee’s miscellaneous application No.181/Kol/2019 and re-call our order dated.28.02.2019 dismissing his main appeal for non-prosecution. The miscellaneous application is allowed.
With the consent of both the parties, we now proceed to deal with the assessee’s main appeal ITA 164/Kol/2018 raising sole substantive grievance that both the lower authorities’ have erred in law and on facts in assessing his consultancy fee received of ₹34,23,776.95 in consultancy services in various countries namely Belgium, Bangladesh, United Kingdom, Netherland & UN involving varying sums under UN assignments. Both the lower authorities invoke section 5(2)(a) of the Act in holding the same as taxable in India MA No181/Kol/2019 & Dr. Kamal Kar. vs. ACIT (In respect to.Taxation)-1(1), Kol Page 3 mainly on the ground that since the assessee’s gross receipts had been transferred to his Indian Bank account, the foregoing sums are in the nature of income received in India. This leveas assessee aggrieved.
We have given our thoughtful consideration to rival contentions. The Revenue vehemently submits during the course of hearing that the Assessing Officer as well as the CIT(A) have rightly asessed this taxpayer’s u/s.5(2)(a) of the Act regarding his consultancy services income. We find no merit in the Revenue’s stand. The fact remains that this assessee is a non-resident who has rendered his consultancy services outside India. We proceed in this backdrop to notice that the tribunal’s co-ordinate bench’s decision in in A.D.I.T(IT)-1(1), Kolkata vs. Mr. Biswajit Ghosh decided on 23.08.2017 has decided the very issue in assessee’s favour as under:- “2.Brief facts of the case: – The assessee is an individual and a non-resident. He filed his return of income for the assessment year 2008-09 on 2nd September 2008, claiming that he has received consultancy charges from M/s Frontera Eastern Georgia Ltd., Nigeria. As the assessee was not an employee of that company and had received the income as a consultant for professional advices provided from time to time, he claimed that the Income was chargeable under the head “profit and gains from business”. The assessing officer rejected this claim of the assessee and treated this amount as salary on a finding that the assessee as an employee, received salary. 3. The assessee as an employee of M/s. Hobark International Limited, Federal Republic of Nigeria, received an aggregate amount of salary amounting to NGN 536395, equivalent to Rs.1,12,19,371/-. This amount was remitted to India and was credited to the assessee’s bank account with Axis bank. The assessee claimed that the earnings were from a source outside India and hence not chargeable in India. The assessing officer held that the amount is chargeable in India within the meaning of section 5 (2) (a) of the Income Tax Act, 1961. Aggrieved, the assessee carried the matter in appeal. 4. The ld. First Appellate Authority, at para 20 of its order held as follows:– ”20.I have carefully considered the observations of the assessing officer in the assessment order and the submissions of the assessee. The assessee is a non-resident Indian and has M/s Hobark International Limited, Nigeria for the period from April, 2007 MA No181/Kol/2019 & Dr. Kamal Kar. vs. ACIT (In respect to.Taxation)-1(1), Kol Page 4 to March, 2008 and received Rs. 1,12,19,371/- as salary. The amount was received in Axis bank, Kolkata. During the said period the assessee is also received a salary from M/s Frontera Eastern Georgia Ltd. The assessee has claimed that since he has worked outside India, therefore, said it is not taxable in India. The Appellant during the appellate proceeding submitted that since the Income was earned for services rendered outside India, the same cannot be deemed to be accrued or arising in India and cannot be taxed even in the assessee has agreed for the same for the assessing officer since it was misconception of law. There is no promissory estoppel in the case of a wrong interpretation of law and it may be taken as a ground of appeal
at any time before the appellate authorities as discussed supra relying on the various judgements of the appellate authorities. The Appellant is relied upon a number of case law is an circular of the department on this issue of offering of income by mistake of not chargeable income tax in which the courts have held that the department cannot tax on taxable income. The Honourable Income Tax Appellate Tribunal, Kolkata bench “A” in the case of Sushil Kumar Das vs ITO reported in (2011) 48 SOT 102 (Kol) (URO) /15 Taxmann.Com 52 (Kol-Trib.) in Paras 9 & 10 as discussed supra has held that “the salary received in India in this case was not chargeable to income tax under the head with an ‘salaries’ is under section 15 (a).” Following the judgement of the Jurisdictional ITAT and other appellate authorities and in view of the circular of the department as discussed supra, it is held that the amount of Rs.1,12,19,371/-, received from M/S Hobark International Ltd., Nigeria for the period from April, 2007 to March, 2008 cannot be taxed in India. These grounds of appeal are allowed and the addition made by the assessing officer is hereby deleted.”
5. Aggrieved, the Revenue is in appeal before us.
6. The learned DR, submitted that the CBDT Circular number 13 of 2017 dated 11th April, 2017 was regarding seafarers and hence not applicable to the assessee. He submitted that the assessee has initially claimed that he received income from business and thereafter changed his version. He relied on the order of the assessing officer and played for the same to be upheld and that of the learned CIT(A), be reversed.
7. The learned counsel for the assessee, submitted that the issue is no more res integra as it is covered by the decision of the Jurisdictional High Court in the case of Smt. Sumana Bandyopadhyay& anr. Versus The Deputy Director of Income Tax, (International Taxation) 3(1) in GA 3745 of 2016 with ITAT 374 of 2016. He relied on a number of case law is in support of his contentions.
8. After hearing rival submissions, we find that the honourable Jurisdictional High Court in the case of Smt. Sumana Bandyopadhyay (supra), had at para 6 held as follows: – MA No181/Kol/2019 & Dr. Kamal Kar. vs. ACIT (In respect to.Taxation)-1(1), Kol Page 5 “6. We concur with the ratio of the decision of the Karnataka High Courtand in our opinion the interpretation be given to sub Section (b) of Section 5(2) of the Act would also apply to Section 5(2)(a) of the Act. The Circular is clarificatory in nature and is applicable for construing the aforesaid provision for the relevant assessment year. In our opinion the authorities under the Income Tax Act did not properly apply the provisions of law to the case of the assessee. We are of the view that the Assessing Officer was wrong in adding the aforesaid sum to the income chargeable to tax of the assessee for the relevant assessment year. We accordingly allow the appeal and answer the question framed by us in favour of the assessee.” 8.1. The decision, as claimed by the learned DR, is not based on the circular but on the interpretation of section 5 (2) (a) and section 5 (2) (b) of the Act. The assessee has rendered services outside India and the income earned there from was credited into the bank accounts located in India.
9. Respectfully following the binding decision of the Jurisdictional High Court, we uphold the order of the learned CIT (A), and dismiss the appeal of the revenue.”
5. We also notice that the tribunal’s yet another decision in and 320/Agr/2013 Arvind Singh Chauhan vs. Income Tax Officer Ward-1(2), Gwalior decided on 14.02.2014 held that the amount in issue; which has been derived outside India and only credited in a bank account in India; does not attract sec. 5(2)(a) in case of a non-resident. Learned co-ordinate bench went by hon'ble Madras high court’s decision to this effect in Commissioner of Income-tax vs. A.P Kalyankrishnan (1992) 195 ITR 534 (Mad) that “the pension payable to the assessee had accrued in Malaysia and only thereafter, by an arrangement embodied in the letter found in Annexure-D to the stated of the case the pension had been remitted to the assessees in India and made available to him. The assessee had, therefore, to be regarded as having received the income outside India and the pension had be remitted or transmitted to the place where the assessee was living, as a matter of convenience and that would not, in our view constitute receipt pension in India”. We adopt the foregoing detailed discussion mutatis mutandis to delete MA No181/Kol/2019 & Dr. Kamal Kar. vs. ACIT (In respect to.Taxation)-1(1), Kol Page 6 the impugned addition of consultancy services income derived outside India as taxable in India. The assessee succeeds in his sole substantive grievance as well as in main appeal.