TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1447
X X X X Extracts X X X X
X X X X Extracts X X X X
.... APPELLATE TRIBUNAL, JAIPUR BENCH, JAIPUR 2. That my registered Address in Rajasthan 27, EVEREST VIHAR, KINGS ROAD, NIRMAN NAGAR, JAIPUR (Rajasthan). 3. That the Learned CIT(A) passed the Order on Dt 07-06-2024 & the due date to file the Appeal was 06-08-2024 but the Appeal efiled on Dt 24-08-2024 due to ill health of the Humble Appellant. That the Humble Appellant was on Bed Rest from 04-08-2024 to 10-08-2024 but even after he was not feeling comfortable & on 15-08-2024 the papers were given to A/R for preparation of Appeal. That on Dt 17-08-2024 the A/R had made payment Stamp Duty & send the papers for signature but the health of the Humble Appellant was not well due to which the same could not be handed over to A/R. That on Dt 24- 08-2024 the Papers were delivered to A/R for submission before the Hon'ble Income Tax Appellate Tribunal, Jaipur Bench. Being 24 Saturday & 25 Sunday, thus the hardcopy was filled on 27 of August 2024. 4. That the delay in filing the Appeal is neither intentional nor will full but due to the Genuine and sufficient reasons shown herein above. Further the Humble Appellant have timely filled all the replies before the Ld Income Tax Officer & Another....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g proceedings under section 270A of the Act. 6. That further submissions in support of appeal shall be made at the time of hearing. 7. That appellant craves leave to add, amend or alter all or any grounds of appeal before or at the time of hearing." 6. Succinctly put, the facts as culled out of the records are that the case was selected for Complete Scrutiny assessment under the E-assessment Scheme, 2019 on Exports/Imports issue. For the year under consideration, the assessee filed its return of income declaring total income of Rs. 15,38,300/- on 30.03.2019. Notice u/s 143(2) of the Income-tax Act, 1961 was issued on 28.09.2019 which was served through e-filing account of the assessee and registered e-mail id of the assessee. Notices u/s 142(1) were issued to the assessee to provide details of purchases made by the assessee during A.Y.2018-19. The assessee had replied and furnished the details. The details were examined and found to be in order by the ld. AO. Vide reply dated 11.02.2020 and 12.02.2020, the assessee provided the revised computation of his income for A.Y.2018-19 declaring revised total income of Rs. 5,80,930/-. Assessee claims to be a proprietor of M/s Sak....
X X X X Extracts X X X X
X X X X Extracts X X X X
....med that residential status for A.Y 2018-19 as Non-resident. Ld. AO noted that the assessee could not have two residential status for A.Y 2018-19 i.e. Non-residential status for Salary Income and Residential Status for Business Income. While observing that the assessee having claimed to resident individual was taxable in India and accordingly, the same was considered as Salary income of the assessee for A.Y 2018-19 and thereby salary income of Rs. 29,86,963/-, being Director's emoluments received from M/s Saket Gems (HK) Ltd. during A.Y 2018-19, of the assessee was found to be taxable in India. Accordingly, addition was made. 7. Aggrieved by the assessment order, assessee preferred an appeal before the ld. CIT(A)/NFAC. Apropos of the grounds so raised in that appeal the relevant finding of the ld. CIT(A)/NFAC are reiterated here in below: 6.0 Decision and Reason. The statement of fact, grounds of appeal and the order appealed against have been perused. 6.1.1. The first ground of appeal is general eneral in nature. Therefore, it needs no separate adjudication especially in absence of documents/evidence on the part of the appellant. 6.2. Vide the second ground of appeal, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ia on the said salary amount. 6.2.4. Further, the appellant has voluntarily filed his IT ret return stating his status as 'Resident. So, it is clear that the appellant himself declaring as a 'Resident'. 6.2.5. Further, the appellant has relied upon decision of Hon'ble ITAT, Delhi in the case of Pramod Kumar Sapra -v- ITO(2017) 87 taxmann.com.98/167 ITD 596 and few other cases and claimed that the status of the appellant is Non-resident and thus, salary income of Rs. 29,86,963/- received from M/s. Saket Gems (HK) Ltd., Hongkong is not taxable in India. But it is seen from the order appealed against that in all these cases relied upon by the appellant, the taxpayers were salaried employees only and their residential status of Non-resident was not disputed. Hence, the said decisions are not squarely applicable to the appellant's case. 6.2.6. Further, as per the provisions of the IT Act, the appellant cannot declare himself for two residential status for the same year i.e. A.Y.2018-19 i.e. Non-resident status for salary income and Residential status for business income. So, the residentials status of the appellant is hereby held as 'Resident only. 6.2.7.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sion of the appellant is not acceptable as the appellant has not provided even the copy of passport indicating period of foreign stay, which must be with the appellant as he is visiting India. Further, the appellant is the Director of the foreign entity having all control on the foreign company but the appellant did not provide any details of its foreign company. 6.2.9. From the above and on a totality of the case of the appellant, the following main facts are found (1) The appellant has voluntarily declared himself as 'Resident' in the ITR filed for the A.Y.2018-19. (2) The appellant has not provided any evidence of payment of tax on the salary received outside India (3) The appellant has only submitted a revised computation of income and a claimed his status as 'Non-resident' without filing the revised IT return for the A.Y.2018-19. Further, during the appellate proceedings, the appellant failed to provide the copy of passport reflecting his foreign stay for more than the prescribed period. Thus, the claim of appellant regarding residential status is not verifiable. 6.2.10. Keeping in view the facts and circumstance of the case and after perusal of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... salary certificate during the Assessment Proceeding before the Learned Assessing Officer. 2. That the Rough(semi finished Stones) are purchased after Checking the Quality & thereafter assorted according to size & weight and thereafter manufactured into finished Stones, which required a knowledge of manufacturing and the trade due to which the company paid the salary. That the Humble Appellant had submitted details of stay in India during FY 2017-18 wherein Humble Appellant had stayed outside India for 188 days and same was supported by copy of passport and documents and the same is accepted by Learned Assessing Officer during the course of assessment proceedings. That the Learned Assessing Officer in the show cause notice have agreed &Accepted that the Humble Appellant earning salary income outside India (i.e. Saket Gems (HK) Ltd, Hong Kong company) and is hence employed outside India and therefore the conditions mentioned above is satisfied for taking the benefit of relaxation and no clubbing of Salary is permissible in facts of the case. That on the above facts as the Humble Appellant have stayed in India for less than 182 days during the relevant year, the Humble Appell....
X X X X Extracts X X X X
X X X X Extracts X X X X
....come tax Portal is as per below:- That the Hon'ble HIGH COURT RAJASTHAN incase of Bijendra Singh Chief Commissioner of Income that "Where Assessing Officer issued on assessee a notice under section 148A(b) dated 16-3-2022 calling upon him to file response on or before 23-3-2022, since impugned notice was posted on 17-3-2022 and date fixed for response was 23-3- 2022 and excluding two days, i.e., date of sending notice as well as last date indicated notice fell short of seven days, impugned notice deserved to be set aside" That the Hon'ble HIGH COURT OF DELHI in case of APHV India Investco. (P.) Ltd. v. Assistant Commissioner of Income-tax (International Taxation)* [2024] 158 taxmann.com 544 (Delhi) held that "Section 142 of the Income-tax Act, 1961 - Assessment - Inquiry before assessment (Opportunity of hearing) - Assessment years 2015-16 and 2016-17 - Revenue issued notices to assessee under sections 142(1) and 148 for relevant assessment years - Assessee claimed to receive only one notice dated 12-7-2022 - It responded with a brief reply via e-mail on 20-7- 2022 and also sought an extension until 5-8-2022 for filing a detailed reply - Assessing Officer passed a draft assessm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Bombay) held that "INCOME TAX : Where assessment order was passed without giving seven days time to assessee to file objections in response to Show Cause Notice issued, impugned order was in breach of principles of natural justice and deserved to be quashed and set aside". That the Hon'ble HIGH COURT OF KARNATAKA incase of Rahim Saib Hiriyur Hyder Ali v. National Faceless Assessment Centre* [2022] 145 taxmann.com 116 (Karnataka) held that "Section 144B, read with section 143, of the Income-tax Act, 1961 - Faceless assessment - (Personal hearing) - Assessment year 2010-11 - Tribunal remitted matter back to Assessing Authority by issuing specific directions regarding examining certain claim of assessee - However, Assessing Officer had not complied with categorical and specific directions issued by Tribunal and passed impugned assessment order - This order was passed within period of two days from date of issuance of show-cause notice enclosing approved assessment order to furnish his reply - It was noted that such short period of time given by Assessing Officer to assessee to furnish his reply was not only contrary to directions issued by Tribunal but was also violative of principl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s all income from whatever source derived which - (a)is received or is deemed to be received in India in such year by or on behalf of such person; or (b)accrues or arises or is deemed to accrue or arise to him in India during such year. That as per Section 6: Residence in India For the purposes of this Act,- (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 (b)[***] (c)having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixtyfive 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 the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 for the purposes of employment outside India, the provisions of subclause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eigh....
X X X X Extracts X X X X
X X X X Extracts X X X X
...."Individual leaving India - A careful reading of Explanation (a) to section 6(1) would show that requirement of the Explanation is not leaving India for employment but it is leaving India for the purposes of employment outside India; for the purpose of Explanation an individual need not be an unemployed person who leaves India for employment outside India - British Gas India (P.) Ltd., In re [2006] 155 Taxman 326 (AAR - New Delhi)". We therefore request you to kindly delete the Additions of Rs. 29,86,963/- & Oblige. 2. That learned Assessing Authority grossly erred in law and facts in making additions of Rs. 29,86,963/- of Salary Received in Hong Kong outside India. i. That the applicant left India for Hongkong for employment purposes, he was in India for 177 days (188 days outside India) in the Assessment Year 2018-19. A copy of Salary Certificate dated 26-04-2018 from Saket Gems (HK) Limited worked at the Hong Kong office of the Company, basis of work done as per below:- a. The Humble Appellant have rich experienced in Production & Quality Control & Sorting of Gems Stones since last several years. Thus the company decided to given the remuneration. That the Humble Appella....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3] 259 ITR 486 (SC)/[2003] 18...[2003] 132 Taxman 214 (SC) held that "Section 5, read with section 6, of the Income-tax Act, 1961 - Income - Accrual of - Assessment years 1990-91 and 1991-92 - Petitioner, a German technician on deputation in India, stayed for more than 182 days during assessment years under consideration - He received daily allowance in India from BHEL but salary from its employer-company in Germany - His salary was held taxable in India - Whether petitioner was 'not ordinarily resident' in India as during nine out of ten preceding years, he had stayed outside India - Held, yes - Whether, he would be governed by proviso to section 5(1)(c) and, hence, salary accrued in Germany was not taxable in India - Held, yes" b. The Hon'ble ITAT AHMEDABAD BENCH 'D' in case of Pradeep Kumar Joshi v. Income-tax Officer, Ward-1, International Taxation, Ahmedabad* [2021] 133 taxmann.com 283 (Ahmedabad - Trib.) held that Section 6 of the Income-tax Act, 1961 - Residential status (Individual) - Assessment year 2016-17 - Whether while counting days of stay in India for considering status of 'resident', day of arrival has to be excluded - Held, yes - Whether a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng previous year for purpose of employment outside India and his stay in India during relevant period was only 68 days, his stay being much less than period of 182 days as per statutory provisions of Act, he could not be treated as resident of India and his status would be of non-resident Indian for purpose of levying of tax as per provisions of Act - Held, yes [Para 10] [In favour of assessee]" f. THE ITAT DELHI BENCH 'D' incase of Assistant Commissioner of Income-tax, Circle 33(1) v. Jyotinder Singh Randhawa* [2014] 46 taxmann.com 10 (Delhi - Trib.) held that "Section 6 of the Income-tax Act, 1961, read with Article 17 of OECD Model Tax Convention - Residential status (Artistes and sportsmen) - Assessment year 2009-10 - Whether going abroad for purpose of employment also means going abroad to take up employment or any allocation which takes in self-employment like business or profession - Held, yes - Assessee, a world known professional golfer, pursued vocation of sportsman - During current and earlier years, he participated in gold tournament in various countries and remained outside India for considerable period in these years - Whether assessee being a professional g....
X X X X Extracts X X X X
X X X X Extracts X X X X
....held that "Section 5, read with section 6, of the Income-tax Act, 1961 - Income - Accrual of - Assessment year 2008-09 - During relevant assessment year, applicant was assigned by his Indian employer-company to work in its group company in USA for 243 days and, thus, during relevant assessment year, applicant was in India for only 122 days - Whether applicant was a non-resident during relevant period and, consequently, his income, that accrued outside India in USA by reason of his employment there, cannot form part of total income taxable in India - Held, yes" j. THE ITAT BANGALORE BENCH 'A' incase of Manoj Kumar Reddy* v. Income- tax Officer (International Taxation) Ward-1(3), Bangalore [2009] 34 SOT 180 (Bangalore) held that "Section 6 of the Income-tax Act, 1961 - Residential status - Assessment year 2005-06 - Assessee, a citizen of India, was an employee of IBM Global Services India (P.) Ltd. - On 23-1-2004, employer issued a deputation letter to assessee and he was directed to work with designated IBM Global Services Customers on specified projects and location was decided in USA - As per deputation order, assessee was to remain an employee of IBM Global Services Ind....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... salary income by employer - Whether since assessee was outside India for a period of more than 182 days, he had became a non-resident and, therefore, salary income of assessee received outside India could not be held to be taxable in India merely because TDS was deducted on such income - Held, yes [Para 9] [In favour of assessee]" We therefore request you to kindly delete the Additions on Account of Salary of Rs. 29,86,963/- (HK$ 360000/-) received for services rendered in Hong Kong. 3. That learned Assessing Authority grossly erred in law and facts in treating the Humble Appellant as an Resident Instead of Non Resident. That as per section 5(1)(c) it is clear that for the income earned by the applicant on account of employment in Hong Kong to be taxable in India, the applicant should have been resident of India during the relevant previous year. In other words, if the applicant is held to be a 'resident' of India during the financial year 2017-18, then, his salary income from employment in Hong Kong would be taxable under the Income-tax Act, 1961. Sub-section (1) of section 6, which determines the residential status of an individual, requires that either the applica....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../SOP/2020-21 14-25 04. Salary Certificate 26 05. [2021] 133 taxmann.com283 (Ahmedabad - Trib.) 27-32 06. [2003] 132 taxman 214 (SC) 33-34 10. Per contra, Ld. DR has heavily relied on the findings of ld. CIT(A), ld. DR and submitted that the assessee-apparent received salary of Rs. 29,86,963/- outside India as the Director of M/s Saket Gems (HK) Ltd., Hongkong during the F.Y 2018-19 but the assessee has neither reflected said salary income in the ITR for taxation in India nor paid any tax outside India and contended that the orders of lower authorities be sustained. 11. We have heard the rival contentions and perused the material placed on record. Ground nos. 2,3 & 4 raised by the assessee deal with the charging of salary income which were earned by the assessee from an entity registered outside India. Pursuant to the notices issued by ld. AO, the assessee submitted reply and filed the details required which were examined and found to be in order by the ld. AO. While doing so, ld. AO noted that the assessee vide reply dated 11.02.2020 and 12.02.2020 provided the revised computation of his income for A.Y.2018-19 declaring revised total income of Rs. 5,80,930/- and from t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Hong Kong. 5. Ledger copy of M/s. Saket Gems India in the books of M/s. Saket Gems Hong Kong and ledger of Saket Gems Hong Kong in books of M/s. Saket Gems India. 6. Ledger copy of Sh. Saket Agrawal in the books of M/s. Saket Gems Hong Kong. 13. Ld. CIT(A) noted that the assessee sought the adjournment on the ground that the required documents were in Hong Kong office and key was with him and also that he was in India to take care of his family. Said information was not provided and therefore, the claim of the appellant-assessee was not considered by the ld. CIT(A). Before us, Ld. AR of the assessee has submitted all the documents required to prove that the assessee was Non resident were placed on record. A.O clearly observed in the assessment order recorded that the assessee had stayed outside India for 188 days. But when the matter was carried before the ld. CIT(A) the assessee was asked to place on record the details as listed by ld. CIT(A) and reproduced herein above. In the course of proceedings before this Appellate Tribunal, copies of certain documents from Sr.No. 1 to 6 have been furnished, but the Index is without any certification as to which of the documents wer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lause (1), an individual, being a citizen of India, having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year shall be deemed to be resident in India in that previous year, if he is not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature. 15. However, since the assessee was also directed to place on record the copy of Balance sheet and P&L account of M/s. Saket Gems Hong Kong and M/s. Saket Gems India, Appointment letter from employer, Ownership details of M/s. Saket Gems Hong Kong, Ledger copy of M/s. Saket Gems India in the books of M/s. Saket Gems Hong Kong and ledger of Saket Gems Hong Kong in books of M/s. Saket Gems India, Ledger copy of Sh. Saket Agrawal in the books of M/s. Saket Gems Hong Kong, but the assessee has placed on record copies of documents and that too without any certification as to which of said documents were forming part of the records before the ld. CIT(A) and which were before the ld. AO, it is not possible for us to decide the fact that he earned the income of Salary of Rs. 29,86,963/- outside India. This fact needs to....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessment year or before the completion of the assessment whichever is earlier. 6. Sub-section (5) of Section 139, therefore, gives right to an assessee who has furnished a return under sub-section (1) or sub-section (4) to revise such return on discovery of any omission or a wrong statement. Such revised return, however, can be filed before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. This is precisely what the assessee did while exercising the right to revise the return. Subsection (5) of Section 139 does not envisage a situation whereupon revising the return if a case for loss arises which the assessee wishes to carry forward, the same would be impermissible. In terms, sub-section (5) of Section 139 allows the assessee to revise the return filed under sub- section (1) or sub-section (4) as long as the time frame provided therein is adhered to and the requirement of the revised return has arisen on discovery of any omission or a wrong statement in the return originally filed. Accepting the contention of the revenue would amount to limiting the scope of revising the return already filed by....