Case Law Details
1. Brief facts of the case are that the assessee is an individual and derives his income from salary and other sources. The assessee claiming himself as non-resident filed his return declaring total income at Rs. Nil. Under scrutiny, notices u/s. 143(2) and 142(1) of the Act were issued. In response to which, according to AO, none appeared in the assessment proceeding. Thereby the AO determined the income of the assessee at Rs. 15,07,862/- vide his order date 27-03-2014 passed u/s. 144/143(3) of the Act. While doing so, the AO observed that the assessee has claimed exemption of salary received from International Mining Services Limited Norway in foreign currency. The assessee claimed as discussed above as non resident status. The AO while examining the material on record found that there was no such evidence to show that the assessee is a non resident. Accordingly, exemption as sought by the assessee was denied by the AO and added the same to his total income.
2. The CIT-A by relying on the decision of Hon’ble Third Member in the case of Capt. A.L Fernandes Vs. ITO reported in (2002) 81 ITD 203 (Mum.) held that the salary received in India for rendering of services by the appellant outside India is chargeable to tax in India as his income. Accordingly, he confirmed the action of the AO in doing so.
3. The ld.AR submits that the assessee’s case is squarely covered by the decision of Hon’ble Jurisdictional High Court of Calcutta in the case of tanka Roy Vs. DIT, International Taxation Transfer Pricing, Kolkata & Ors. passed in W.P No. 369 of 2014 on 15-12-2016 and placed on record the same. He further referred to pages 6-10 of such order and argued that the assessee is a non resident and facts of the present case in hand are similar to the facts of the case in the case of supra of Hon’ble Jurisdictional High Court of Calcutta. In support of his contention, he also placed his reliance on the CBDT Circular No. 13/2017 date 11.04.2017 and placed on record the same and argued that the CBDT has clarified that the salary accrued to a non-resident seafarer for services rendered outside India on a foreign ship shall not be included in the total income.
4. On the other hand, the ld.DR submits that the assessee did not produce anything in the assessment proceedings showing that he is non resident. The CIT-A did not discuss anything in detail to find out whether the assessee is a non resident or not. The ld.DR further argued that the decision as relied on by the ld.AR of the assessee of the Hon’ble Jurisdictional High Court of Calcutta in the case of supra is not applicable to the present facts of the case for the reason that the Hon’ble High Court of Calcutta observed that the assessee therein rendered services outside India for a period of 286 days and as such same is to be considered as income received outside India. The ld.DR submits that the CBDT Circular as relied on by the ld.AR of the assessee is also not applicable to the facts of the present case for the reason that it has been clarified that the salary accrued to a non-resident is not includable to the total income and argued that the assessee could not produce anything to show that he is a non resident.
5. Heard rival submissions and perused the material available on record. Admittedly, the assessee earned foreign currency from his said foreign employer outside India and claimed exemption as non resident in his return of income. We find that there was no evidence placed on record to show that he is a non resident Indian. In absence of which, the AO treated the assessee as resident of India. The CIT-A relying on the decision of Third Member in the case of supra held that any income received by non resident of India is taxable in India for the reason that the salary was received in India. We find that the Hon’ble Jurisdictional High Court of Calcutta in the case of supra held that the assessee rendered his services outside India treating the assessee therein as non resident. We find that the assessee therein rendered his services outside India for a period of 286 days. In our opinion to treat a person as non resident there is a procedure contemplated in section 6 of the Act, where any person claims to be treated as non resident one must show that stay outside India for more than 182 days. In the present case, we find that the assessee could not produce anything before any of the authorities by showing any evidence that he is non resident having rendered his services outside India for more than 182 days. Accordingly, the facts of the Hon’ble Jurisdictional High Court of Calcutta in the case of supra together with the said CBDT Circular as relied on by the ld.AR of the assessee before us are not applicable to the present facts of the case. Thus, we find force in the submissions of the ld.DR. In such circumstances and in the interest of natural justice, we restore the issue to the file of the AO for a limited purpose to find out whether the assessee is a resident or non resident in terms of relevant provisions of the Act. The AO is directed to pass a fresh order as per law after giving the assessee adequate opportunity of hearing to the assessee. The assessee is at liberty to file requisite evidences, if any, to substantiate his claim properly. Ground raised by the assessee is allowed for statistical purpose.
