2012 (4) TMI 205 - HC - Income Tax

Assessee was employed with UNICEF - residing outside India and returning to India on his superannuation remitted the salary in India in foreign exchange amount had been invested mainly in bank deposits - assessee filed return of income claiming tax benefit under Section 115 E and the AO found returns were filed under section 115H where the assessee has not satisfied the procedural and substantive requirements under Chapter XIIA of the Income Tax Act - AO reopened the assessment u/s 147 revenue stated that the assessee is a Resident as mentioned in the return, hence is not entitled to the concession rate of tax under Section 115 E/115 H - Held that - re-assessment was validly re-opened as held in favour of the Revenue in the case of Assistant Commissioner of Income Tax Vs. Rajesh Jhaveri Stock Brokers P. Ltd. (2007 -TMI - 6563 - SUPREME Court) - the assessee had been a Non-Resident for 12 years prior to his return to India - He has been in India only for 323 days during the previous seven years preceding the assessment year - the status of the assessee is Not Ordinarily Resident and the real status of the assessee cannot be denied merely the assessee made a wrong declaration when he satisfied all the conditions - is entitled to the benefit of Section 115 E

Summary

Issues:
1. Validity of reopening assessments for assessment years 1994-95 to 1996-97.
2. Timeliness of issuance of notices under section 143(2) in relation to section 148 notices.
3. Applicability of time limit under proviso to section 143(2) to cases with reopened assessments.
4. Entitlement of assessee to concessional tax rate under section 115H.
5. Determination of assessee's status and entitlement to exemptions under sections 115E and 10(15)(iv)(fa).

Analysis:

Issue 1:
The Revenue challenged the validity of reopening assessments for the mentioned years. The Tribunal held that the Assessing Officer lacked justification for the reopening and considered the case on merits, ruling in favor of the assessee. The Tribunal's decision was based on a thorough review of the facts and circumstances.

Issue 2:
Regarding the timeliness of notices under section 143(2), the Tribunal found that the Assessing Officer failed to issue the notices within the prescribed period, contrary to the Revenue's claim. The Tribunal's decision was based on a detailed examination of the timeline of notices issuance.

Issue 3:
The Tribunal analyzed the applicability of the time limit under the proviso to section 143(2) to cases involving reopened assessments. Both parties agreed that the issue was settled by a Supreme Court judgment in favor of the Revenue. Consequently, the Tribunal ruled in favor of the Revenue on this issue.

Issue 4:
The dispute centered on the assessee's entitlement to the concessional tax rate under section 115H. The Revenue argued that the assessee, being a "Resident," was not eligible for the benefit. However, the Tribunal correctly applied the provisions of section 115E and determined the assessee's status as "Not Ordinarily Resident," granting the benefit accordingly.

Issue 5:
The Tribunal extensively examined the assessee's status and entitlement to exemptions under sections 115E and 10(15)(iv)(fa). Despite the initial declaration as a "Resident," the Tribunal correctly determined the assessee's status as a "Non-Resident Indian," making him eligible for the benefits under section 115E. The Tribunal's decision was based on factual findings and a thorough analysis of the relevant provisions.

In conclusion, the Tribunal's decisions on the issues raised in the appeals were well-founded in law and supported by the facts of the case. The Tribunal correctly applied the relevant provisions of the Income Tax Act, leading to the partial allowance of the tax case appeals in favor of the assessee.