Mrigesh Gaurav Vs ITO (ITAT Mumbai)
The appeal arose from an intimation issued under section 143(1) by the Centralised Processing Centre (CPC), wherein the assessee was granted partial credit of Tax Deducted at Source (TDS). While the assessee had claimed TDS credit of ₹24,75,737 as reflected in Form 26AS, only ₹1,62,025 was allowed, resulting in a short credit of ₹23,13,712. The assessee, an individual deriving income primarily from salary, had been deputed by his employer to the United States for a short-term international assignment during the relevant period. He claimed that he was a non-resident in India and that salary attributable to services rendered outside India was not taxable in India under section 5(2), section 9(1)(ii), and Article 16 of the India–USA DTAA. Accordingly, only a portion of the salary was offered to tax in India.
Before the first appellate authority, the assessee’s grievance was limited to the short grant of TDS credit. However, the CIT(A) examined the taxability of the entire salary and concluded that the full salary was taxable in India since it was paid through the Indian payroll and the assessee failed to demonstrate that the income was taxed in the United States or that DTAA benefits applied. The CIT(A) directed taxation of the entire salary and grant of TDS credit accordingly.
