The Income Tax Appellate Tribunal (ITAT), Delhi bench has directed the Commissioner of Income Tax (Appeals) to re-consider a matter where the question of whether the salary received from a foreign employer shall be included to determine the perquisite of rent-free accommodation under the provisions of the Income Tax Act, 1961.
The assessee, an expatriate employee in India working as Managing Director in an Indian company Hakuhodo Percept Pvt. Ltd, filed his income tax return. However, the assessment was re-opened by the Assessing Officer for the reason thatthe assessee has shown perquisite under rent-free accommodation by considering only the Indian salary whereas, according to the Assessing Officer, he was required to compute perquisite value of rent-free accommodation by including foreign salary also.
On appeal, the first appellate authority passed an ex-parte order for want of representation from the side of the assessee. The order was pronounced without deciding the matter on merits.
The Tribunal bench comprising Judicial Member Amit Shukla and Accountant Member Prasanth Maharishi observed that the ld. CIT (Appeals) dismissed the appeal of the assessee more on the aspect of non-prosecution.
“He did not adjudicate that whether for computing the perquisite of rentfree accommodation, only Salary paid by Indian employer is to be considered or the salary paid by foreign employer is also to be added thereto. Thus, he dismissed appeal of assesse only for non-prosecution in substance, which is not permitted.Therefore, there has to be the decision on merits by the ld CIT (A). Naturally, assesse did not have any notice of hearing as the assesse has left the premises. No doubt, it is the duty of the assesse to intimate a change in address, but that does not give power to appellate authority to dismiss appeal of assesse for non-prosecution,” the Tribunal held.
Concluding the matter by directing the first appellate authority to re-consider the matter, the Tribunal held that “even otherwise the ld. CIT (Appeals) should have decided the issue on the merits whether the Indian salary and foreign salary both are required to be considered for computing the perquisite of rent-free accommodation provided to the assessee.”Subscribe Taxscan AdFree to view the Judgment