TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 2056
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....y and allowances and the salary was entirely credited to the Bank Account the assessee maintained in India. In the computation / statement of income, the assessee has shown an amount of Rs.4,77,739 as taxable in India under the head 'Salary' and shown an amount of Rs.36,39,515 as exempt income. Before the Assessing Officer the assessee submitted that she was sent on an international assignment by her employer. Since her stay in India was less than 182 days in the year under consideration, she qualifies as Non-Resident and as salary income is chargeable on "accrual basis", the salary for the period when she served in the USA does not accrue in India and therefore is not exigible to tax in India. The Assessing Officer, however, did not agree with the contentions of the assessee for the following reasons as emerge from the order of assessment :- (i) that the assessee did not produce confirmation from her employer in India or in the USA to establish that she was working in the USA for the said period. (ii) since the salary is received in India, the surrounding circumstances suggest that services are rendered in India, unless the contrary is proved. (iii) The assessee'....
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....ls) has mentioned that three notices for hearing of the appeal on various dates were sent to the assessee, but none appeared and therefore the CIT(Appeals) passed an ex-parte order confirming the additions / disallowances made by the Assessing Officer. It is in respect of and against this order of CIT(Appeals) - 10, Bangalore dt.28.2.2018 for Assessment Year 2013-14 that the assessee has preferred this appeal. ORDER ON CONDONATION OF DELAY IN FILING THE APPEAL FOR ASSESSMENT YEAR 2013-14. 3.1 Admittedly, there is a delay of 112 days in filing this appeal before the Tribunal. Along with the appeal filed before the Tribunal by the assessee against the order of CIT(A) - 10, Bangalore dt.28.2.2016 for Assessment Year 2013-14, the assessee has filed an application for condonation of delay in filing this appeal accompanied by an Affidavit sworn to by the assessee. In the Affidavit the assessee has submitted the following reasons for the delay in filing this appeal which are extracted hereunder :- 2. I wish to submit that the Assessment for AY. 2013 - 14 was completed by the Income Tax Officer, International Taxation, Ward 1(2), Bangalore, under Sec. 143(3) of the Income Tax Act, 1961....
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....condoned, which will result in a meritorious matter being thrown out at the very threshold and the cause of justice being defeated. WHEREFORE, I pray that the Hon'ble Tribunal be pleased to condone the delay and accept the appeal filed under section 253 of the Act. 3.2 As per the petition and Affidavit sworn to by the assessee, now filed before the Tribunal, admittedly there has been a delay of 112 days in filing the appeal. I have heard both parties and perused the Affidavit filed by the assessee seeking condonation of delay in filing the appeal and the judicial precedents in this regard. The Hon'ble Apex Court in the case of MST Katiji & Others (167 ITR 471) (SC), while explaining and laying down the principles that need to be kept in mind while considering an application for condonation of delay, has emphasised that substantial justice should prevail over technical considerations. The Hon'ble Court also explained that a litigant does not stand to benefit by lodging the appeal late and that the expression 'every day's delay must be explained' does not mean that a pedantic approach should be taken. The doctrine should be applied in a rational, common sen....
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.... 7. The learned CIT (A) has ignored the submissions made during the course of assessment on the taxability of salary income based on the domestic tax laws. 8. The learned CIT (A) erred in mentioning that the salary income received in India pertaining to services rendered overseas has been claimed as exempt under India -USA Double Taxation Avoidance Agreement (DTAA). 9. The learned CIT (A) erred in mentioning that the appellant had not submitted any supporting documents to prove that the salary income claimed as exempt was infact accrued outside India. 10. The learned CIT (A) erred in stating that several communications were sent to the appellant for hearing and none appeared on any of the hearing dates and no written submission was made. 11. The learned CIT (A) has erred by not taking cognizance of the appeal order dated 27th October 2018 already received from the CIT (A)-12 for the same assessment year. 12. The learned CIT (A) has erred by not taking cognizance of the fact that the residential house property was let out only for part of the year. 13. The learned CIT (A) ought to have given the appellant the opportunity to be heard and to enable the appellant to provid....
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....he learned Authorised Representative's contention that the Assessing Officer had completely misdirected himself on this issue as the assessee has not sought any relief under the India - USA, DTAA. The assessee had in fact claimed the exempt income under the provisions of Sec. 5 (2) r.w.s. 15 of the Act and not the DTAA provisions. It is submitted that the judicial pronouncements relied upon by the CIT(Appeals) - 12, Bangalore in her order dt.31.10.2017 apply squarely to the facts on the assessee's case and therefore the CIT(Appeals) - 12 was right in giving relief and upholding the assessee's claim on this issue. The learned Authorised Representative contends that while the impugned order of the CIT(Appeals) - 10, Bangalore dt.28.2.2018 is void-ab-initio, no prejudice will be caused to Revenue, as there is no merit in the addition made by the Assessing Officer and which has already been considered on merits and deleted by the CIT(Appeals) - 12. 5.2.1 Per contra, the learned Departmental Representative for Revenue admitted that there has been some confusion internally in the Department due to which the earlier appellate order of the CIT (Appeals) - 12, Bangalore dt.31.1....
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....aimed exemption under the provisions of the Income Tax Act, 1961 and not the DTAA and therefore the case law cited by the learned Departmental Representative (supra) does not apply to the assessee's case at all. It was also pointed out that the assessee had submitted her passport and visa details to the Assessing Officer in order to establish that she was abroad for the stated period and the copy of the USA Tax Return was also furnished; copies of which are at pages 119 to 146 of the Paper Book filed by the assessee. In view of the above facts, the learned Authorised Representative prayed that the impugned ex-parte order of CIT (Appeals) - 10, Bangalore be quashed. 5.4.1 I have heard the rival contentions, perused and carefully considered the material on record; including the judicial pronouncements cited (supra). The basic undisputed facts are that the assessee is a salaried employee who was sent by her employer on deputation to USA for a part of the year under consideration. Therefore, in the year under consideration, her stay was partly in India and partly abroad. However, her salary for the entire year has been credited by her employer in her bank account in India. As her ....
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....- 12, Bangalore dt.31.10.2017 is a reasoned and speaking order, considering the Assessing Officer's view, the assessee's submissions and the legal precedents and pronouncements on the subject. This order dt.31.10.2017 cannot be wished away merely because of a Departmental Administrative Order of the Pr. CCIT transferring the appeal for this particular Assessment Year 2013-14 from the CIT(Appeals) - 12, Bangalore. It is not the case of Revenue that the order of the CIT(Appeals) - 12, Bangalore dt.31.10.2017 was perverse OR made on a wrong factual or legal premise. The mistake was either on the part of the CIT(Appeals) - 12, Bangalore in not implementing the order of the Pr. CCIT, Bangalore OR it is of the Pr. CCIT, in not communicating the order of transfer. Either way, it was the solely the mistake of the officers of the Department and the assessee should not suffer hardship and harassment due to the same. The fact of the matter, in the case on hand, is that when the CIT(Appeals) - 10, Bangalore passed the impugned ex-parte order dt.28.2.2018, the order of the CIT(Appeals)-12, dt.31.10.2017 was very much in existence; even up to 12.6.2018 when it was sought to be invalidate....
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....ovisions of the Act will have significant impact on the interpretation of Section 5(2). Reference is made to "The Law and Practice of Income Tax" by Kanga, Palkhivala and Vyas (Vol. I, Ninth Edition, page 311). Reference is also to the following judgements :- CIT v Nippon (1998) 233 ITR 158 (Calcutta) at page 162; CIT v Khambaty (1985) 159 ITR 203 (Bom.) at pages 207-208. 12.7 As per section 15, salary is not taxable on receipt basis except in case of advance salary or arrears salary. Regular salary under section 15(1)(a) is taxable on accrual basis. Salary is accrued where the employment services are rendered. In the instant case, for the assessee, the normal place where the employment services rendered is in Japan and not in India. His visits to India are in connection with business and not for rendering employment services for any Indian entity. There is no employment agreement for having rendered any services for Indian entity. In the instant case, the salary accrues to the assessee in Japan and the accrued salary is partly delivered by Motorola India in India. Hence, there is no accrual of salary in India. 12.8 In terms of section 9(1) (ii) income chargeable under the he....