TaxTMI 
TaxTMI 
2015 (11) TMI 731
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....ls) as well as the Assessing Officer has failed to appreciate that in the "new annexure less returns", there is no space/column, wherein assessee could mention her declaration, that assessee wants not to be governed by the provisions of chapter XII-A . 3. The L'd Commissioner of Income Tax ( Appeals) as well as the Assessing Officer has failed to appreciate that by filing the return and claiming the deductions assessee has given deemed/implied consent that she does not want to be governed by the provisions of Chapter XII A of the Income Tax Act. 4. That the L'd Commissioner of Income Tax ( Appeals) has erred in upholding the action of the Assessing Officer wherein he has taxed the income of the assessee @ 20%. 5. That the appellant reserves her right to raise additional grounds of appeal at the time of hearing." 2. The relevant facts as emanating from the record are that the assessee declared a taxable income of Rs. 1,36,471/-. The said return was selected for scrutiny. The assessee enjoyed the status of Non-Resident Indian and had claimed a deduction of Rs. 1 lac under chapter VI-A. The AO also observed that the assessee had shown "income from....
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....me filed by her the income was assessed at Rs. 4,13,758/- by disallowing deduction claimed of Rs. 1,77,287/- u/s 57 and Rs. 1,00,000/- by disallowing deduction claimed under VI-A. 4. Aggrieved by this the assessee went in appeal before the CIT(A). 5. The arguments advanced before the AO were reiterated. For-readyreference, these are reproduced hereunder:- 2. "FIRST Ground For Appeal a. Chapter XII-A, section 115-I allows the non-resident Indian to 'elect not to be governed by the provisions of this Chapter for any assessment year by furnishing his return of income for that assessment year under section 139 declaring therein that the provision of this chapter shall not apply to him for that assessment year and his total income for that assessment year shall be computed and tax on such total income shall be charged in accordance with the other provisions of the I T. Act. b. In this respect, I humbly submit that I filed my return under section 139 on Form ITR-2 as required by law. c. There is no provision in the new annexure-less, paperless or e-file return formats to file any special "declaration therein" as specified above. There is no s....
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....paperless forms and e-filing. m. Therefore, the denial of the deductions (see 1 (d) above) under Chapter XII should be reversed since I would have been implicitly deemed to elect not to be governed by this Chapter Consequentially, the deduction U/S 57 as well as the deduction U/S 80C should be allowed and tax should be calculated as per the slab rate." 3. SECOND Ground For Appeal a. The Assessing Officer has cited Chapter XII A Section 115-D and denied the deduction for interest expense of Rs. 1,77,287.00, stating "As per Section 115D subsection (1), no deduction in respect of any expenditure or allowance shall be allowed under any provision of this Act in computing the investigation income of a non-resident Indian. " b. The Assessing Officer also cited Chapter XII-A, Section 115-D, subsection 2 to deny the section 57 deduction of Rs. 1,00,000 (see 1 (c) above on page 2). c. Please note that section 115-D specifically deals with "Investment income" only and the disallowance of "any expenditure" is only applicable in computing the "investment income". d. "Investment income" is defined in Section 115-C as "any income derived (othe....
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...., the Assessing Office states: "Section 115Eof the I. T. Act prescribes the rates of tax chargeable on certain incomes of non-resident assessee including rate of 20% chargeable on investment income. However, as per provisions of section 151-I of the I.T. Act. a non-resident Indian assessee may elect not to be governed by the provisions of this special Chapter XII-A for any assessment year by furnishing his return of income for that assessment year under section 139 declaring therein that the provisions of this chapter shall not apply to him for that assessment year and his total income for that assessment year shall be computed and tax on such total income shall be charged in accordance with the other provisions of the I.T. Act. " b. Please note that Section 151 of the I.T. Act mentioned above deals with "Sanction for Issue of Notice". I am unable to understand how this section applies to my tax return. c. Please note that there is no section 151-I of the l.T. Act referred above - it simply does not exist d. In point 9.2 of her order, the Assessing Officer states that "Further, as per sub-section (2) of section 115D in case of a non-resident Indian where ....
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....duction of interest paid as well as deduction u/s80C, assessee has given an implied declaration that the provisions of section 115D are not applicable to him. It is therefore humbly requested that the appeal of the assessee be kindly allowed and the deduction of interest paid be as well as deduction claimed u/s 80C be also allowed. Further directions be issued to calculate tax at normal rates instead of flat 20% as done by Assessing Officer." 6. In the said background, the finding arrived at in pages 12-14 it was submitted by the ld. AR is a mere justification of the AO's action. It was submitted that on the reading of the same, it would show that the specific grievances of the assessee had not been discussed at all. Even otherwise it was argued that this was the initial period of e-filing of returns where admittedly no such place was available to the assessee where the said option could have been exercised and in the facts of the present case as per the pleading before the CIT(A) the assessee did try to file a hard copy before the AO and even otherwise the position was taken that the option is exercised which is found recorded in the arguments of the assessee recorded ....