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29-11-2019, Mahesh Kumar, Section 6, 5(2), 5(2)(b), 263, Tribunal Kolkata

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2 weeks 1 day ago #11605 by amit
Section - 6, 5(2), 5(2)(b), 263, 9(1)(ii)
Order Date - 29-11-2019
Favouring - Assessee
Court - Tribunal Kolkata
Appellant - Mahesh Kumar
Respondent - CIT
Justice - J. Sudhakar Reddy, AM & A. T. Varkey, JM
Citation - 1119Taxpundit298
Appeal No. - I.TA No.1303/Kol/2019
Asstt. Year - 2014-15

Order

PER : A.T.Varkey, JM

All these appeals preferred by the different assessee’s are against the separate orders of the Ld. CIT(IT & TP), Kolkata passed u/s. 263 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) all dated 29.03.2019for AY 2014-15. Since facts are identical and grounds are common we dispose of all these appeals by this consolidated order for the sake of convenience.

2. The common facts permeating in all the appeals are that all the assessee’s are the employees of IBM India Pvt. Ltd. (hereinafter referred to as “IBM”) who have been sent to Switzerland on company’s foreign assignment. The undisputed facts are that the residential status of all the assessee’s for the relevant year is “non-resident” in terms of Section 6 of the Act and that they actually rendered services outside India during the period under consideration. The employer viz., IBM deducted tax at source u/s 192 on the entire gross salary earned by the assessee’s. The assessee’s however claimed in their respective returns of income that the foreign assignment allowance component inter alia included in the gross salary was received by them outside India and that too for the services rendered outside India and therefore fell outside the ambit of total income u/s. 5(2) of the Act. In the assessments completed u/s 143(3), the AO accepted the assessee’s claim for exclusion of such foreign assignment allowance from the ambit of total income. This action of the AO has been interfered with by the Ld. CIT u/s. 263 of the Act on the ground that AO’s action is erroneous as well as prejudicial to the Revenue. The legal issue raised by all the assessee’s in the present appeals, is against the action of the ld. CIT to usurp the revisional jurisdiction u/s. 263 of the Act.

3. At the outset, when the matter was being heard, the Ld. Counsel for the assessee Shri Nageswar Rao, Advocate pointed out that similar/identical matters pertaining to the issues of IBM employee’s foreign allowance has already been heard by the Bench comprising of Shri A. T. Varkey and Dr. A. L. Saini “C” Bench in the appeals preferred by Shri Bodhisattva Chattopadhyay & Ors. Vs CIT (IT & TP) [ ITA No.1314/Kol/2019 & ors for AY 2014-15] and that judgment in those appeals were reserved on 27.09.2019 and that the judgment in those appeals are expected at any time. At that juncture, we note that the author of the judgment in those appeals is one of the member of this Bench ”C” on this day of hearing [i.e. on 13.11.2019] and since we were aware that the order/judgment of those appeals were ready to be delivered, we took these appeals for hearing in order to ascertain whether the facts and the issues discussed by the Ld. CIT in these impugned orders are similar/identical to that of the appeals of Shri Bodhisattva Chattopadhyay(supra). Though the Ld. DR vehemently supported the order of the Ld. Pr. CIT passed u/s. 263 of the Act and does not want us to interfere in the impugned order, could not point out any difference in the facts or law or issues in the appeals of Shri Bodhisattva Chattopadhyay(supra). After hearing we note that the present appeals are similar/identical to that of the appeals preferred by Shri Bodhisattva Chattopadhyay & Ors. Vs. CIT (IT & TP)[ ITA No. 1314/Kol/2019] We also note that the impugned order of Ld. CIT in these appeals and that of ITA No. 1314/Kol/2019 is on the same date i.e. 29.03.2019, similarly worded (except the figures) and by the same Ld. CIT (IT&TP) and so we treat these appeals as also heard and the decision in ITA No. 1314/Kol/2019 will be followed mutatis mutandis. Further we note that on 15.11.2019, we have pronounced the judgment in Shri Bodhisattva Chattopadhyay & Ors. Vs. CIT (IT&TP), wherein we allowed the appeals of the assessee’s and since as afore stated, the facts being similar and issues are identical, the result of Bodhisattva Chattopadhyay (supra). Since we note that the facts are similar/identical and the Ld. DR could not point out any difference in the facts as decided by this Tribunal in the case of DCIT Vs. Sandip Maity & Ors. in ITA No. 1128, 416 to 425/Kol/2017 as well as that preferred by Shri Bodhisattva Chattopadhyay (supra) and the distinguishing points raised by the Ld. CIT in his impugned order passed u/s. 263 of the Act has been considered in the order passed on 15.11.2019 in the case of Bodhisattva Chattopadhyay Vs. CIT(IT&TP), Kolkata in ITA No. 1314/Kol/2019 & Ors. for AY 2014-15, we are inclined to follow the same mutatis-mutatis and take note that the Tribunal had quashed the impugned order of the Ld. CIT by holding as under:

“2. At the outset itself, it was brought to our notice that the issue involved is, no longer res integra and, therefore, after hearing both the parties, we are inclined to dismiss all the stay applications filed by the assessee and dispose of all the appeals in ITA Nos. 1304, 1306, 1308. 1311, 1314 & 1315/Kol/2019.The common facts permeating in all the appeals, are that all the assessee’s are the employees of IBM India Pvt. Ltd. (hereinafter referred to as “IBM”) who have been sent to Switzerland on company’s foreign assignment. The undisputed facts are that the residential status of all the assessee’s for the relevant year is “non-resident” in terms of Section 6 of the Act and that they actually rendered services outside India during the period under consideration. The employer viz., IBM deducted tax at source u/s 192 on the entire gross salary earned by the assessee’s. The assessee’s however claimed in their respective returns of income that the foreign assignment allowance component inter alia included in the gross salary was received by them outside India and that too for the services rendered outside India and therefore fell outside the ambit of total income u/s. 5(2) of the Act. In the assessments completed u/s 143(3), the AO accepted the assessee’s claim for exclusion of such foreign assignment allowance from the ambit of total income. This action of the AO has been interfered with by the Ld. CIT u/s. 263 of the Act on the ground that AO’s action is erroneous as well as prejudicial to the Revenue. The legal issue raised by all the assessee’s in the present appeals, is against the action of the ld. CIT to usurp the revisional jurisdiction u/s. 263 of the Act. Since the facts and questions of law involved in all these cases are identical, we take the appeal of Shri Bodhisattva Chattopadhyay in ITA No.1314/Kol/2019as the lead case, the result of which will be applied mutatis mutandis in all other cases.

3. Briefly stated the facts of the lead case is that the assessee (Shri Bodhisattva Chattopadhyay) was sent by his employer IBM on short term assignment to Switzerland for which he was stationed there for 349 days during the relevant financial year 2013-14. Since his stay outside India for the purpose of employment exceeded 182 days during the relevant year, his residential status for the year under consideration was “Non-Resident”. During the year, the assessee had received the following emoluments from IBM.

a) Gross salary received in India - Rs.18,65,767/-, and
b) Foreign allowances on account of the international assignment, received in Switzerland - Rs.42,97,092/-

4. It is noted that IBM had deducted tax at source (TDS) of Rs.16,94,180/- on the entire emoluments paid to the assessee including the foreign assignment allowance u/s. 192(1) of the Act. The assessee filed his return of income for the Asst. Year 2014-15 declaring taxable income of

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