TaxTMI 
TaxTMI 
2025 (6) TMI 1447
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the applicant has filed an Appeal before the Hon'ble INCOME TAX 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 Humbl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mptions and presumptions and against real facts of the case. 5. That the learned Assessing Authority, grossly erred in law and facts in initiating 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, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s i.e. from AY 2014-15 to A.Y 2017-18. Thus, he claimed that his residential status during A.Y 2018-19 was Resident only, as per provisions of section 6(1)(c) of the IT Act, 1961. However, subsequently, in his response dated 19.03.2021, the assessee claimed 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 an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt has received salary of Rs. 29,86,963/- outside India as the director of M/s. Saket Gems (HK) Ltd., Hongkong during the F.Y.2017-18. But it is found that the appellant has neither admitted the salary income in the IT return filed for the A.Y.2018-19 for taxation purpose in India nor paid any tax amount outside India 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. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Saket GemsHong 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. However, the appellant ahs sought repetitively adjournment on the ground that the required documents are in Hong Kong office and key is with him and he is in India to take care of his family. However, the submission 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....utside India is not liable to Tax in India, since the Humble Appellant was stayed for Employment outside India for more than 182 days as per Explanation 1 to Section 6(1) C. That the Humble Appellant received Salary from Saket Gems (HK) Ltd to look after the work of their business in Hong Kong:- 1. The Humble Appellant have rich experienced in Production & Quality Check of Gems Stones since last several years. Thus the company decided to given the remuneration. That the Humble Appellant have submitted the Copy of 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 7. That appellant craves leave to add, amend or alter all or any grounds of appeal before or at the time of hearing. The Grounds of Appeal are discussed in Detail as per below:- 1. That order of Learned Assessing Authority is bad in law, illegal and against facts and circumstances of the case. i) That the SCN issued on Dt 19-04-2021 for hearing Date 22-04-2021 i.e. Less than 7 days time to file the Reply. That the Learned Assessing Officer issued SCN on Dt 19-04-2021 for hearing Date 22-04-2021. Infact the Learned Assessing Officer issued mostly Notices wherein less than 15 days time for submission of Reply. A screenshot of Income 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d a final assessment order in terms of draft assessment order even before time of adjournment expired - Whether time granted of only one day in show-cause notice certainly could not be accepted as sufficient time given to assessee to respond - Held, yes - Whether, therefore, impugned assessment order passed by Assessing Officer without providing assessee due opportunity to file his submissions to notice-cum-draft assessment order was in violation of principles of natural justice and, same was to be set aside - Held, yes [Para 6] [In favour of assessee]" That the Hon'ble HIGH COURT OF BOMBAY incase of Chef talk Food and Hospitality Services (P.) Ltd. v. Income-tax Officer* [2024] 165 taxmann.com 415 (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 secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....his Act, the total income of any previous year of person who is a resident includes 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; or (c)accrues or arises to him outside India during such year : Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6) of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set-up in India. (2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non-resident includes 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....21 has also mentioned that the Appellant remained out of India for 188 days (Stay in India 365-188= 177) during the Financial Year 2017-18. Thus, the Humble Appellant being a non-resident during the previous year 2017-18, the income earned by him from his employment in Hong Kong cannot be taxed under Income-tax Act, 1961. In support of our claim we are referring Anurag Chaudhary, In re [2010] 190 Taxman 296 (AAR - New Delhi)" & British Gas India (P.) Ltd., In re [2006] 155 Taxman 326 (AAR - New Delhi)". "Effect of individual spending less than 182 days in India - If an individual has spent less than 182 days in India during a previous year and was outside India for purposes of employment, then regardless of his being in India for 365 days or more during four preceding previous years, he cannot be treated as a resident of India as held in case of Anurag Chaudhary, In re [2010] 190 Taxman 296 (AAR - New Delhi)". "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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....C is as under:- ^37(1) Subject to^38 the provisions of this Act, the total income^39 of any previous year of a person who is a resident includes all income from whatever source derived which- (a) is received^40 or is deemed to be received^40 in India in such year by or on behalf of such person ; or (b) accrues or arises^40 or is ^40deemed to accrue or arise to him in India during such year ; or (c) accrues or arises^40 to him outside India during such year : Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6) * of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India. That we are submitting herewith the Salary Certificate along with following Judicial Pronouncements for your kind perusal:- a. The Hon'ble SUPREME COURT OF INDIA in case of Commissioner of Income-tax v. Morgenstern Werner* [2003] 132 Taxman 214 (SC)/[2003] 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... with RIL, was deputed as Country Manager to Kurdistan, Iraq, and for purpose of his employment in Iraq, he had received salary - In annual return of income filed in India, assessee had claimed exemption of salary earned outside India - Assessing Officer passed assessment order accordingly - Commissioner revised said order observing that income was received by assessee in his bank account in India and it had to be taxed in India - Whether since assessee's stay outside India was for 203 day, more than threshold limit of 182 days in terms of sub- section (1) of section 6, salary income of assessee for previous year could not be held to be taxable because he was not resident in India - Held, yes [Para 8] [In favour of assessee] e. THE ITAT DELHI BENCH 'D' incase of Assistant Commissioner of Income-tax, Circle-35(1), New Delhi v. Col. Joginder Singh* [2014] 45 taxmann.com 567 (Delhi - Trib.) held that "Section 6 of the Income-tax Act, 1961 - Residential status (Individual) - Assessment year 2005-06 - Whether where an assessee, a citizen of India, had left India during previous year for purpose of employment outside India and his stay in India during relevant period....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., yes - Whether assessee was already employed prior to leaving India should not effect its residential status and therefore, salary income of assessee accrued or arose during employment in China was not taxable in India - Held, yes [Para 3] [In favour of assessee] h. THE ITAT DELHI BENCH 'G' incase of Suresh Nanda v. Assistant Commissioner of Income-tax, Central Circle-13, New Delhi* [2012] 23 taxmann.com 386 (Delhi) held that "Section 6 of the Income-tax Act, 1961 - Residential status - Assessment years 2001-02, 2002-03 and 2004-05 - Whether residential status of a person for purpose of section 6 is to be determined only on basis of number of days of his stay in India and there is no restriction for number of days spent abroad - Held, yes - Whether if period of stay of a person in India is less than 182 days then status to be applied would be of non-resident and his global income cannot be taxed in India in such case - Held, yes [In favour of assessee]" i. AUTHORITY FOR ADVANCE RULINGS (INCOME TAX), NEW DELHI incase of Anurag Chaudhary, In re* [2010] 190 Taxman 296 (AAR - New Delhi) held that "Section 5, read with section 6, of the Income-tax Act, 1961 - ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om April 2004 to January, 2005, his stay in India from 18-8-2004 to 6-9-2004 was in respect of visit to India which was to be excluded while computing period of 60 days as mentioned in section 6(1)(c) - Held, yes - Whether further, in view of facts (i) that assessee arrived in India on 31-1-2005 (ii) that as per section 9 of General Clauses Act, first day in series of days was to be excluded, and (iii) thus, assessee's stay in India from 1-2-2005 to 31-3-2005 was only 59 days, i.e., less than 60 days as mentioned in section 6(1)(c), assessee's status was to be regarded as non-resident - Held, yes" k. THE ITAT DELHI BENCH 'SMC' incase of Avdesh Kumar v. Deputy Commissioner of Income-tax, Circle-1, Ghaziabad* [2018] 96 taxmann.com 340 (Delhi - Trib.) held that "Section 6, read with section 5, of the Income-tax Act, 1961 - Residential status (Individual) - Assessment year 2013-14 - Assessee had shifted to Korea for purpose of employment and received salary in Korea - Assessing Officer made addition in respect of income earned by assessee from his foreign employer on ground that TDS was deducted on such salary income by employer - Whether since assessee was out....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the return Income & delete the Additions & oblige 9. Learned AR has vehemently argued that it is not in dispute that the assessee had stayed in India during last 188 days as tabulated at page 3 of the assessment order and as such income which he earned outside India could not be subjected to tax . In support of this contention, ld. AR of the assessee has also filed following documents: S No Particulars Page No. 01. Certificate of Incorporation - Saket Gems (H.K) Limited 1 02. Memorandum & AOA of Saket Gems (H.K) Limited 2-10 03. HSBC Bank Statement of Saket Agarwal Maintained in Hong Kong 11-18 04. Audited Balance Sheet of Saket Gems (H.K) Ltd 19-33 05. Reply Dt 12-02-2020 & 11-02-2020 for submission of Revised Computation of Income 34-35 06. Reply Dt 22-04-2021 for submission of Revised Computation of Income 36-40B 06. Revised Computation of Income 41-43 07. Copy of ITR V & Computation of Income 44-48 08. Reply Dt 13-03-21 & 19-03-21 for submission of Passport 49-92 S No Particulars Page No. 01. Application for condonation of delay in filing of Appeal. 1 02....
X X X X Extracts X X X X
X X X X Extracts X X X X
....income of the assessee for A.Y 2018-19. Ld. CIT(A) confirmed the findings of the ld. AO on the very same reason that the assessee had shown his residential status as 'Resident' in the IT return filed for the A.Y.2018-19. Record reveals that while submitting the revised computation of income, the appellant had requested the A.O. to accept the status of the appellant as 'Non-resident', said request was disallowed while observing that fresh claim for treating him as a 'Non-resident was made without filing of revised IT return for the A.Y.2018-19. Having regard to the judicial pronouncement by the Hon'ble Supreme Court of India in the case of M/s. Goetze (India) Ltd. -v- CIT(2006) 284 ITR 323 (SC), it was observed by the AO that the revised claim of the appellant to treat himself as Non-resident could not be considered. 12. Record reveals that during the appellate proceedings, the appellant was asked to provide the following information vide notices dated 11.03.2024, 20.03.2024 and 05.05.2024; 1. Copy of passport reflecting absence of more than 180 days and day wise stay in countries. 2. Balance sheet and P&L account of M/s. Saket Gems....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o 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 Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted ; (b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted and in case of such person having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year, for the words "sixty days" occurring therein, the words "one hundred and twenty days" had been substituted. Explanation 2.-For the purposes of this clause, in the case of an individual, being a citizen of India and a member of the crew of a fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....turn under Section 139(1) of the Act. Counsel for the revenue submitted that when no return in terms of sub-section (3) of Section 139 claiming carry forward or set off loss was filed, such claim cannot be subject matter of a revised return. Had the assessee filed such return, the possibility of revising such return on finding any error would arise. 5. We may notice that under sub-section (1) of Section 139, every person whose income for the previous year exceeds the maximum amount not chargeable to tax, is required to file a return before the due date. Sub-section (3) of Section 139 provides that any person who has sustained a loss and claims that the loss should be carried forward would file a return of loss within the time prescribed under subsection (1) and thereupon all the provisions of the Act shall apply as if it was a return under sub-section (1) of Section 139 of the Act. Under sub-section 4 of Section 139, a person who has not furnished a return within the time allowed under sub-section (1) may still furnish a return at any time before the end of the relevant assessment year or before the completion of the assessment whichever is earlier. Sub-section (5) of Sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....operative Milk Producers Union Ltd. [2004] 266 ITR 705/137 Taxman 364 held that once the assessee had filed a return claiming carry forward loss under sub-section (3) of Section 139, a revised return could be filed in respect of such a return. We are conscious that we are not directly concerned with such a situation. 8. In view of the above discussion, we do not find any error in the view of the Appellate Tribunal. Tax appeal is, therefore, dismissed. 17. Following said ratio respectfully and based on the observations as mentioned herein above, the assessee must place on record documents, as desired by ld. CIT(A) before him to enable him to decide the issue. Based on these observations ground no. 2, 3 & 4 are dealt with for statistical purposes, and the matter is restored to the file of the ld. CIT(A), who will decide the issue on the material to be placed on record by the assessee. 18. Ground no. 1 raised by the assessee being technical ground challenging the assessment order since we have decided the grounds of appeals of the assessee on merits, this ground does not require to be decided. 19. Ground no. 5 being premature at this stage same is not required to ....