2021 (9) TMI 829 - HC - Income Tax

Revision u/s 264 - Residential Status of Individual - how many days petitioner stayed on foreign soil - treating the assessee/petitioner as Resident for having stayed in India for 182 days during the relevant previous year as per Section 6 (1) (a) - tds u/s 192 - HELD THAT - As evidence by way of certificate of his employer upon which petitioner wants to rely for his period of stay in question on foreign water was never produced or filed either before the Assessing Officer or before the Commissioner of Income Tax during the impugned proceeding under Section 264 of the Act in which the Commissioner of Income Tax has upheld the order of the assessment u/s 147/144 of the Act treating the petitioner as Resident and for the first time petitioner has produced the aforesaid certificate issued by his employer in this writ proceeding and wants this Writ Court to appreciate and consider the aforesaid piece of evidence in exercise of its constitutional writ jurisdiction under Article 226 of the Constitution of India while all these facts are totally absent in the aforesaid decisions/judgments upon which petitioner wants to rely and furthermore in addition to these facts, circulars/notifications upon which petitioner wants to rely is in conflict with Section 6 (1) of the Income Tax Act, 1961 and it is settled principle of law that if there is a conflict between a circular or notification and an Act the Act will prevail. We are not inclined to interfere with the impugned order of the respondent Commissioner of Income Tax dated 25th January, 2007 passed in exercise of his revisional jurisdiction under Section 264 of the Income Tax Act, 1961, confirming the order of assessment under Section 147/144 of the Income Tax Act, 1961 treating the petitioner as Resident , in exercise of limited scope of judicial review by this Court under constitutional writ jurisdiction under Article 226 of the Constitution of India.

Summary

Issues:
Challenge to order of Director of Income Tax treating petitioner as "Resident" for tax purposes based on days stayed in India. Petitioner's claim as "Non-Resident" due to days spent on foreign water. Validity of assessment under Section 147/144 of Income Tax Act. Jurisdiction of Commissioner of Income Tax under Section 264 for revision. Admissibility of evidence produced before the Writ Court. Interpretation of relevant Sections and Circulars.

Analysis:
The petitioner challenged the order of the Director of Income Tax treating them as a "Resident" for tax purposes due to staying in India for 182 days during the relevant year. The Assessing Officer brought the petitioner's entire salary under the tax net. The petitioner claimed to be a "Non-Resident" as they were on foreign water for more than 182 days, citing Circular no. 586 of the CBDT. The assessment was completed under Section 147/144 of the Income Tax Act as the petitioner did not respond to the notice under Section 148 or file a return.

During the assessment, the petitioner's employer certified their stay in India for 182 days, leading to tax deduction at source. The Assessing Officer sought explanations regarding the petitioner's residential status and global income. The petitioner contended that their reply to the notice under Section 142 (1) should suffice as a return and claimed no taxable income beyond what was declared in the return. The petitioner failed to challenge the assessment through rectification or appeal procedures.

The petitioner argued for "Non-Resident" status based on employer certificates produced before the Writ Court, not previously submitted to tax authorities. The Court declined to consider this new evidence, emphasizing that it was not presented during the assessment or revision proceedings. The petitioner relied on Supreme Court judgments and Circulars, but the Court found them inapplicable to the case due to the petitioner's actions and the conflict with Section 6 (1) of the Income Tax Act.

The Court upheld the Commissioner of Income Tax's order confirming the petitioner as a "Resident" for tax purposes. The limited scope of judicial review under Article 226 of the Constitution of India prevented the Court from interfering with the revisional order under Section 264. The Writ Petition was dismissed, and no costs were awarded.