TaxTMI 
TaxTMI 
2007 (3) TMI 658
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....nged the order of the Commissioner of Income-tax (Appeals) that no appeal lies against the determination of quantum of interest under section 244A of the Act. 3. The assessee has filed two additional grounds. The first of it being that the assessee having been held to be a resident, the Assistant Commissioner of Income-tax (International Taxation), Circle-19(1) did not have the jurisdiction and the second being with regard to levy of surcharge on the assessee, as the same is not payable by a non-resident for the assessment year in appeal. In support of the admission of additional grounds, the assessee has stated that the assessee was in India only for 180 days is clearly recorded in the order of the Assessing Officer and this going to the root of the matter, the same may be admitted. 4. Appearing for the assessee, learned counsel, Mr. S. Ramasubramanian submitted the facts of the case. He submitted that the assessee is a partner in a firm in India known in the name and style of M/s. Sheriff Constructions. Counsel for the assessee submitted that the assessee had an intention of exploring business propositions outside India and he, accordingly, applied for permission to the Res....
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....nt outside India" . He submitted the meaning of the expression " would have to be taken as any gainful employment outside India", need not necessarily be restricted to seeking refuge or work under an employer. He submitted that the employment could mean any kind of work not necessarily where the employee-employer relation subsist. At this juncture, he drew our attention to the decision of the Supreme Court in CBDT v. Aditya V. Birla [1988] 170 ITR 137. He submitted that the issue in the case before the Supreme Court was remuneration for services rendered outside India and remuneration received in foreign currency and the claim of relief was made under section 80RRA of the Act. He submitted that remuneration necessarily does not engulf salary only but also the amounts paid to a consultant. 8. He also drew our attention to the Delhi High Court decision in K. R. Pradeep v. CBDT [2006] 282 ITR 526, where the court held that if the person renders the service outside India and receives remuneration in foreign currency, he would be entitled to deduction under section 80RRA of the Act. 9. He also drew our attention to the decision of the jurisdictional High court in A. S. Mani v. Uni....
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....r of Income-tax (International Taxation), Ward-19(1), Bangalore, has territorial jurisdiction of urban and rural districts of Bangalore, is with reference to persons in those areas who are non-residents. It was, accordingly, submitted that the Assistant Commissioner of Income-tax (International Taxation), Ward-19(1), not having been conferred jurisdiction to assess residents, it is not open to the Assistant Commissioner of Income-tax (International Taxation), Ward- 19(1) to refuse to give the assessee the status of non-resident. According to the counsel for the assessee, in order that the Assistant Commissioner of Income-tax (International Taxation), Ward-19(1) could proceed with the assessment, he must be impressed with jurisdiction and this jurisdiction is extended to only non-residents. The conferred jurisdiction not being extended to residents, the officer having refused to accept the status of the assessee as non-resident, could not, therefore, proceed with the assessment on a resident. He submitted that the reference made earlier on the order of the Tribunal in Iblex Gallagger P. Ltd. (I. T. A. Nos. 2274 to 2278/ B/04) was for the proposition that exercise of jurisdiction wit....
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....al rent, he submitted that the Assessing Officer included the notional rent by applying the provisions of section 23(2) of the Act. He submitted that it is not in dispute that the assessee had a residential house in his name. His daughter did not permit him to enter the house and, therefore, he was compelled to stay with his son. The property is, therefore, such that it could not be occupied by the owner because of the circumstances. He submitted that, therefore, inclusion of the notional income is improper and, therefore, must be deleted. 17. The last of the issue is with regard to claim of raising of the issue of correct quantification of interest under section 244A of the Act which, the Commissioner of Income-tax (Appeals) has held that it is not an appealable issue, but an issue for which the assessee should approach the office of the Assessing Officer for rectification. Counsel for the assessee submitted that section 244A talks of refund of any amount due to the assessee. The refund has arisen consequent to the tax levied on the assessee having been reduced and covers one very important element, i.e., the period from which the interest is due to the assessee. He, therefore,....
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....sion on the various grounds as raised by the assessee. 22. In ground No. 2, the assessee has raised the issue of being assessed in the status of " resident" and in ground No. 3, the refusal of the Commissioner of Income-tax (Appeals) to admit additional evidence which is connected with ground No. 2 is mentioned. Ground No. 1 is general in nature. The additional ground that has been raised by the assessee is with regard to the status and is with reference to the jurisdiction of the officer assessing the assessee and the other additional ground is that surcharge is not leviable on a " non-resident" . 23. The accepted fact is that the assessee filed this return of income before the Assistant Commissioner of Income-tax (International Taxation), Circle- 19(1), Bangalore. This return was so filed by the assessee on the premise that the assessee was in India during the relevant previous year for 180 days only. The additional evidence that the assessee sought for admission before the Commissioner of Income-tax (Appeals) is the letter dated January 5, 2001, from the Reserve Bank of India, Exchange Control Department, Central Office, Mumbai, to M/s. India Builders Corporation in which ....
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....re business probabilities and hence, he was in India for just 180 days. He submitted that the Reserve Bank of India was informed of this by the firm in which the assessee was a partner. The assessee had further contended that section 6(1) of the Income-tax Act, 1961, which described in the case of an individual, the circumstances under which he would be treated as a resident. This being essential for this particular case, we are reproducing the same for the sake of facility : " Section 6. (1) An individual is said to be resident in India in any previous year, if he- (a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more ; or . . . (c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty five days or more, is in India for a period or periods amounting in all to sixty days or more in that year. Explanation.-In the case of an individual,- (a) being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shippi....
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....revious year as a member of the crew of an Indian ship and to this proposition, an alternative proposition has been provided as " or for purposes of employment outside India" . The assessee wants us to read the word employment as including a business. The Cambridge International Dictionary of English defines the term employee as a person who is paid for working for some one else. The same dictionary when it comes to employment refers to the term employment as a job or business. The same dictionary defines the term " business" as an activity of buying and selling goods and services or work in general rather than mere pleasure. 29. The section as it was amended by the Direct Tax Laws (Second Amendment) Act, 1989, perhaps was oblivious to the present day situation at which point of time, India has been into global business. The global business was started from the year 1997 onwards. Considering this feature, we are not in a position to accept the claim of the assessee that the term " employment outside India" would also include business outside India. 30. Various authors on Jurisprudence, Interpretation of Statutes, as well as the courts over the years have been very conscious o....
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....h the assessee would receive salary or remuneration. The insistence of the assessee that the word remuneration as contained in section 80RRA of the Act has been interpreted widely should be imported into the section, we are unable to accept for the reason that section 6 does not contain the term " remuneration" . All that it contains is " employment" . It is, therefore, not possible to import the rulings or meanings as contained in section 80RRA of the Act into section 6 of the Act. In view of the above, the status of the assessee for the relevant previous year would be that of a resident. 33. The contention of the assessee with reference to the above have been so considered in the conclusions arrived at with reference to his claim of filing the return in the status of non-resident with the Assistant Commissioner of Income-tax (International Taxation), Ward-19(1), Bangalore. 34. The basic ground of the assessee is with reference to the fact that the return having been filed with the Assistant Commissioner of Income-tax (International Taxation), Ward-19(1), that particular officer has jurisdiction to assess non-residents in that status only. In support of his claim, he had fil....
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.... the claim was not acceptable and the consequence was that the assessee has to be treated as a resident. 38. The Departmental representative had referred to the decision of Smt. Sohani Devi Jain [1977] 109 ITR 130 where the assessment proceedings on one assessee by two different officers were found to be valid. It was submitted that the consequence of treating the assessee as a non-resident would not create a situation as claimed by the assessee that the Officer had no jurisdiction. 39. The delineation of jurisdiction of the Assistant Commissioner of Income-tax (International Taxation) that was brought out in the earlier paragraph makes no bones and does not extend the jurisdiction of the Assessing Officer (International Taxation) to persons who are residents. All persons who are residents falling within the urban and rural area districts of Bangalore are, therefore, outside the purview of the Assessing Officer (International Taxation). This is because, the persons who are classified as residents are not part of persons or classes of persons on whom the Assessing Officer (International Taxation) had been delegated the power of exercising under the Income-tax Act. 40. In th....
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....ed. From that point of view perhaps appeal may not lie. 43. Be that as it may, the right of appeal could still be available to the assessee in regard to the status even when the assessment is transferred to an officer having jurisdiction as noted above. Since the very crux of jurisdiction is shaken in the instant case, that is the Assessing Officer (International Taxation) having found the assessee to be a resident, he exercised jurisdiction over him. Since he had exercised jurisdiction without authority and without any authorization therefor, the order passed by him suffers from lack of jurisdiction. Such an order would, therefore, become an illegal order and non est in the eye of law. We hold accordingly and quash the order. 44. Though it may not be necessary to go into the merits of the issue before us, namely, inclusion of rent on notional basis and the calculation error in interest under section 244A of the Act, we would, as an abundant precaution cover these two issues also. 45. The fact that the assessee owned the house is accepted. The claim of the assessee is that the assessee is under occupation of his daughter and, therefore, he was deprived of using that house ....