The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) has directed the Assessing Officer to allow Tax Deducted at Source ( TDS ) credit and self-assessment tax, as the Department of Inland Revenue Sri Lanka certifies the assessee’s gross remuneration.
The Sharangpani Dinkar Pant, was a non-resident and has filed e-return of income for the assessment year 2018-19 on 31.08.2018 declaring total income of Rs.1,54,310/-. The CPC Bangalore has processed the return filed under section 143(1) of the Act on 05.11.2019. In the return filed the assessee has claimed refund of Rs.17,70,270/- on account of TDS of Rs.17,59,258/- and self-assessment tax of Rs.11,007/-, since there was no tax payable by the assessee as per the information provided by the assessee in the return filed. However, the CPC vide intimation under Section 143(1) of the Income Tax Act, 1961 dated 31.08.2018 has computed refund amount payable to the assessee to the amount of Rs.1,41,814/- as against refund amount claimed by the assessee to the amount of Rs.17,70,270/-.
The Commissioner of Income Tax (Appeals) against short grant of tax deducted at source of Rs.16, 30,334/- and non-grant of self-assessment tax of Rs.11,007/-. However, the CIT (A) has dismissed the appeal of the assessee on the ground that identical issue has been adjudicated by him in the appeal filed by the assessee against the order of AO-CPC under section 154 dated 14.07.2020.
Mr. Balaji V, representing the assessee vehemently contended that the assessee was a salaried individual employed with Nilsen (India) Pvt. Ltd. and for the period 01.08.2016 to 31.07.2019 he had rendered services in Sri Lanka. Since the assessee was nonresident during the previous year under consideration therefore as per the provision of section 6 of the Act only the salary income for the number of days spent in India for working with the Nilsen (India) Pvt. Ltd. of 23 days to the amount of Rs.3, 91,162/- was offered to tax in India and the remaining salary which was earned for working in Sri Lanka to the amount of Rs.56, 78,097/- had been offered to tax in Sri Lanka.
Further filed paper book comprising copies of document and detail of submission made before the lower authorities. The assessee has also filed a copy of tax residency certificate from the department of Inland Revenue, Sri Lanka and tax certificate -2018 dated 04.07.2018 from Department of Inland Revenue. He also submitted that during the course of appellate proceedings the CIT (A) has never asked the assessee to furnish the copy of resident certificate
The bench found that the CIT (A) has not at all referred in his order that the assessee was asked to produce the copy of tax resident certificate we find that the lower authorities have not brought any material on record to disprove the material fact that the assessee was a nonresident during the year under consideration and had rendered services outside India from 01.08.2016 to 31.07.2019 and he was sent to Sri Lanka by Nilsen Company (India) Pvt. Ltd. As per article 15(1) of India–Sri Lanka DTAA salary income earned by the resident of Sri Lanka for employment in Sri Lanka is taxable only in Sri Lanka.
Further, it was also evident from the copy of tax residency certificate dated 23.12.2019 submitted by the assessee from Department of Inland Revenue Sri Lanka certifying that the assessee was a resident in Sri Lanka for the assessment year 2017- 18 within the meaning of Double Taxation Avoidance Agreement between Sri Lanka and India. Further vide tax certificate-2018 dated 04.07.2018 the Department of Inland Revenue Sri Lanka has also certified that the assessee has earned gross remuneration of LKR 23,350,192/- as per this tax certificate issued to “The Nilsen Lanka Pvt. Ltd.”
The bencch of M.S Kavitha Rajagopal ( Judicial member) and Amarjith Singh ( Accountant member) was directed to allow the credit of TDS amount and self-assessment tax to the assessee after examination of the copy of tax residency certificate and copy of tax certificate as referred above submitted by the assessee. Therefore, both the appeals of the assessee were allowed for statistical purposes.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
