Non-resident remittances through banks not taxable under Sections 5(2)(b) and 69; appeal delay condoned.

The Tribunal allowed the appeal filed by the non-resident assessee, concluding that remittances brought into India through banking channels were not taxable under section 5(2)(b) read with section 69 of the Income-tax Act, 1961. The Tribunal emphasized that the CBDT Circular No. 5 supports the non-taxability of such remittances, discharging the onus under section 69. Consequently, the Tribunal found the orders of the Assessing Officer and the Commissioner (Appeals) unsustainable and deleted the impugned addition. The delay in filing the appeal was condoned.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Taxability of remittances brought into India by a non-resident.
3. Applicability of Section 69 and Section 5(2)(b) of the Income-tax Act, 1961.
4. Interpretation of CBDT Circular No. 5, dated 20-2-1969.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal
The appeal was filed with an eighteen-day delay. The assessee supported the application for condonation of delay with an affidavit. After hearing both parties, the delay was condoned.

2. Taxability of Remittances Brought into India by a Non-Resident
The assessee, a Non-Resident Indian residing in Malaysia, made substantial NRNR (Non-Resident Non-Repatriable), FCNR (Foreign Currency Non-Resident), and NRO SB deposits in Indian banks. The Assessing Officer initiated proceedings under section 147 and issued a notice under section 148. The deposits, aggregating to Rs. 4,68,85,844, were assessed as income under section 69. The Commissioner (Appeals) upheld this decision, which was challenged in the present appeal.

3. Applicability of Section 69 and Section 5(2)(b) of the Income-tax Act, 1961
The learned AR argued that the remittances came from abroad through banking channels and should not be subjected to income-tax per CBDT Circular No. 5. The learned Standing Counsel contended that the deposits were taxable under section 5(2)(b), read with section 69, as deemed income.

The Tribunal observed that under section 5(2), a non-resident is taxed only on income received or deemed to be received in India, or accruing or arising in India. The Tribunal noted that money brought into India through banking channels does not become taxable merely because it is brought into India. The onus under section 69 is discharged if the remittance is through banking channels.

4. Interpretation of CBDT Circular No. 5, dated 20-2-1969
The Circular clarifies that money brought into India by non-residents through banking channels is not liable to Indian income-tax. The Tribunal emphasized that remittances through banking channels discharge the onus under section 69, and thus, section 5(2)(b) does not apply.

Conclusion and Judgment:
The Tribunal concluded that the remittances brought into India through banking channels by the non-resident assessee were not taxable under section 5(2)(b) read with section 69. The CBDT Circular No. 5 supports this view. The Tribunal found the orders of the Assessing Officer and the Commissioner (Appeals) unsustainable and deleted the impugned addition. The appeal filed by the assessee was allowed.

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