ITAT partially allows assessee's appeal for assessment year 2009-2010

The ITAT partially allowed the assessee's appeal against the order of the CIT(A) for the assessment year 2009-2010. The issues were restored to the AO for reevaluation of the rectification application on its merits, specifically to determine the eligibility of the assessee for exemption under section 5(1)(c) read with section 6 of the Act as a non-resident Indian. The AO was directed to consider the rectification application in accordance with the law. The decision was made in light of the CBDT Circular No.4 of 2012, allowing for condonation of the four-year limitation period for genuine claims.

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Issues:
Appeal against order of CIT(A) for assessment year 2009-2010 - Delay in filing rectification application under section 154(7) of the Act - Claim of exemption u/s.5(1)(c) r.w.s 6 of the Act - CBDT Circular No.4 of 2012 - Restoration of issues to AO for readjudication on merits.

Analysis:
The appeal was filed by the assessee against the order of the ld CIT(A) for the assessment year 2009-2010. The assessee, an individual deriving income from salary services outside India, filed the return belatedly through a Chartered Accountant Firm. The return did not claim the benefit of exemption u/s.5(1)(c) r.w.s 6 of the Act due to a mistake. A demand was raised on the assessee based on the processed return, leading to the discovery of the error. The rectification application filed by the assessee after a delay of 7 years was rejected by the Assessing Officer citing section 154(7) of the Act. The ld CIT(A) also dismissed the appeal on the same ground.

The assessee argued that as per CBDT Circular No.4 of 2012, the limitation of four years can be condoned for genuine claims beyond the four-year period, subject to merit in the rectification petition. The revenue did not oppose the restoration of the issues to the AO for verification and examination on merits, even though it was beyond the limitation period.

Considering the submissions and the CBDT circular, the ITAT decided to restore the issues to the AO for readjudication of the rectification application on merits. The AO was directed to determine whether the assessee was a non-resident Indian during the relevant period and entitled to the exemption u/s.5(1)(c) r.w.s 6 of the Act. If the claim is found to be valid, the AO was instructed to decide the rectification application on merits in line with the Act.

In conclusion, the appeal of the assessee was partly allowed for statistical purposes, and the order was dictated and pronounced in open court on 13/12/2022.

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