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TMI Blog2019 (8) TMI 1263X X X X Extracts X X X X X X X X Extracts X X X X ..... antial question of law against quantum additions are admitted by Hon ble High Court in appeal filed u/s 260A, wherein the taxpayer is allowed to enter the doors of the Hon ble High Court, , the tribunal shall refrain from deciding the issue even in penalty proceedings u/s 271(1)(c) keeping in view judicial propriety and discipline, the tribunal being lower in hierarchy than Hon ble High Court. Once the High Court is seized of the issues which are admitted by Hon ble jurisdictional High Court against quantum additions, the tribunal shall refrain from deciding even penalty levied u/s 271(1)(c) on merits. Section 275(1A) comes to the rescue of Revenue as in the instant case before us and the most appropriate course of action in such situations for tribunal shall be restore the matter back to the file of the AO to adjudicate afresh levy of penalty u/s 271(1)(c) against assessee read with Section 274 275(1A), wherein the AO be directed to pass penalty order u/s 271(1)(c) r.w.s 274 275(1A). Thus, we are restoring issues in this appeal to the file of the AO for fresh adjudication keeping ,inter-alia, provisions of Section 275(1A). X X X X Extracts X X X X X X X X Extracts X X X X ..... Salary( Rs.) 1 01.04.2008 to 21.07.2008 112 M/s Precision Drilling Services at Abudhabi 16,70t371/- 2 24.07.2008 to 30.09.2008 69 Triton Holdings Ltd INDIA 5,94,468/- 3 01.1 0.2008 to 18.12.2008 79 Transocean Offshore International Ventures Ltd. INDIA 9,75,656/- 4 28. 01. 2009 to 31.03.2009 63 M/s Precision Drilling Services at Abudhabi 10,50,262/- On going through the details, it is seen that during the period mentioned at Sr. No.2 & 3 you were in India with Triton Holdings Ltd & Transocean Offshore International Ventures Ltd. Companies. You have claimed that during this period you have visited Abudhabi from 14.09.2008 to 13.10.2008. In this regard, you are requested to give following information: 1. Purpose of your visit to Abu Dhabi. If this visit was for the purpose of employment, documentary evidence in this regard may kindly be given. The copy of the contract, the salary received during this period may also be furnished. The place of stay in Abu Dhabi and the details of expenditure incurred during this period may also be given. 2. Copy of contracts with all the employers with whom you have worked may be given. Furnish details of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e words "one hundred and eighty-two days" had been substituted. 5.1 On going through section 6(1)(c), the assessee is resident if he is in India for 60 days in last year and 365 days in previous four years. The assessee has himself admitted that in previous four years (F.Y.2004-05 to 2007-08), he was in India for 847 days and during F.Y.2008-09 he was in India for 160 days. The condition laid down in section 6(1)(c). 5.2 On going through section 6(1)(a) the assessee is resident in India if he is in India for 182 days or more. The assessee claims that he was in India for 160 days and abroad for 205 days The period from 14.09.2008 to 13.10.2008 (30 days), the assessee claims that he was at Abu Dhabi. The claim of the assessee that he was in Abu Dhabi for the purpose of training and the payment for his training was done by Triton is not supported by any documentary evidence. As discussed above he had shifted the job on 1st of October, 2008 from Triton to Transocean, therefore the claim of the assessee that the period from 14.09.2008 to 13.10.2008 should be considered as the period for the purpose of employment abroad, is not acceptable. 5.3 Without prejudice to above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his period from 14th September 2008 to 13th October 2008 by Triton Holding Ltd. in India as well as his expenses at Abu Dhabi were borne by Triton Holding Ltd., India. The assessee shifted his job to Transocean Offshore International Ventures Limited, India w.e.f. 01.10.2008. The assessee thus claimed that he worked with Indian Companies from 24.07.2008 to 18.12.2008 i.e. for a period of 148 days. The assessee also claimed that it worked abroad with Precision Drilling Services , Abu Dhabi from 01.04.2008 to 21.07.2008 and from 28.01.2009 to 31.03.2009, i.e. for 175 days. The assessee claimed that if this period of 30 days of his stay in Abu Dhabi i.e. from 14.09.2008 to 13.10.2008 is also included , then in that case his stay outside India will be 205 days which is more than 182 days of stay and the assessee in that scenario is a non-resident. The assessee was in India in previous four years viz. fy: 2004-05 to 2007-08 for a period of 847 days. The AO while framing assessment rejected this period of stay of the assessee of 30 days abroad from 14th September 2008 to 13th October 2008 in Abu Dhabi, as in the opinion of the AO this period of assessee's stay outside India was not for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been substituted ; (b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted, [Explanation 2,-For the purposes of this clause, in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed.] For an individual to be a resident in India, either he is in India during the year, for a total period of 182 days or more or he has been in India during 4 years preceding the year under consideration for a total period of 365 days or more and for a period of 60 days or more in the year under consideration. There is no dispute that the assessee has fulfilled the first limb of the provision provided under clause (c) of sec. 6(1) being in for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the said period of stay outside India cannot be regarded as for the purpose of employment outside India. Accordingly, we do not find any merit in the appeal of the assessee. The impugned order of the CIT(A) is upheld. 10. In the result, the appeal of the assessee is dismissed." 5. The assessee has now carried the matter in quantum before Hon'ble Bombay High Court and appeal of the assessee stood admitted in ITA no. 657 of 2016 vide orders dated 27.11.2018 of wherein substantial question of law admitted by Hon'ble Bombay High Court is as under:- " 1. The Appeal is admitted for consideration on following substantial question of law : (i)Whether in the facts and in the circumstances of the case and in law, could the appellant be treated as "resident in India" within the meaning of Section 6(1) of the Income Tax Act, 1961 for Assessment Year 2009-10? 2. Registry is directed to communicate a copy of this order to the Tribunal. This would enable the Tribunal to keep the papers and proceedings relating to the present appeal available, to be produced when sought for by the Court." 6. In the meantime , the AO had confirmed levy of penalty on the assessee u/s 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the whole confusion is about the impugned 30 days (from the period 14.09.2008 to 13.10.2008) of his stay in Abu Dhabi is for the purpose of employment or not. iii. The stay of the appellant out of India, during the impugned period of 30 days is also not in dispute and therefore the total number of days of his stay out of India counts down to 205 days. iv. As per the provisions contained in section 6(1) of The Income Tax Act, 1961 the residential status of a person is 'Resident' if he has stays in India for 182 days or more during the previous year. Here in this case the stay of the appellant in India is only 160 days and therefore he qualifies to be Non Resident in the A. Y. under this appeal. v. The quantum addition was made by the Ld. A.O. on the basis of holding residential status of the appellant as Resident, as against claim of the appellant of non- resident, on the erroneous interpretation of the provisions of section 6(1) of the act. The Ld. A.O. held that within the provisions of section 6(1)(a) of the act the assesses was not out of India during the impugned 30 days for the purpose of employment (para 5.2 and 5.3 of the assessment order). Whereas the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. d. A mere making of the claim, which is not sustainable in law , by itself, will not amount to furnishing of inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to the inaccurate particulars. Legal position on this issue : a. The Hon'ble Supreme Court of India has clearly held in CIT Vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC) that mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing of inaccurate particulars nor it will amount to concealment of particulars. vi. The present case of the appellant is identical in nature to the above referred case, where he has claimed its residential status as non-resident in the return for A. Y. 2009-10 based on the bona fide belief and facts that he was not in India for 182 days or more in the previous year. However, the Ld. A.O. technically has not counted those impugned 30 days (from the period 14.09.2008 to 13.10.2008) of his stay in Abu Dhabi as his stay abroad and therefore brought his income earn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bal income and therefore the appellant was liable for concealing the particulars of income. 5.2 ..... 5.3 ....... 5.4 ....... ... ... 5.9..... 6. In the facts of the appellant's case also, the appellant deliberately with a malafide intention had shown his status as non-resident while in reality, he was resident as per the provision of Section 6 of the IT Act. By making such false claim regarding his residential status, he avoided paying tax to the extent of income earned of ₹ 27,20,633/-. This fact came to the light only when the Assessing Officer analysed the entire facts. Had the return not been selected for the scrutiny, the appellant would have certainly escaped tax liability on this amount. The stand taken by the Assessing Officer was subsequently confirmed by the first appellate authority as well as by the ITAT Mumbai bench. In the light of the facts of the case as well as detailed decisions cited as referred supra, I hold that the appellant is liable for concealing the particulars of his income to the extent of ₹ 27,20,633/- and therefore penalty levied by the Assessing Officer u/s 271(1)(c) amounting to ₹ 9,24,740/- is absolutely in order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst claim of the appellant of non- resident, on the erroneous interpretation of the provisions of section 6(1) of the act. The Ld. A.O. held that within the provisions of section 6(1)(a) of the act the assessee was not out of India during the impugned 30 days for the purpose of employment (para 5.2 and 5.3 of the assessment order). Whereas the fact remains is that there is no such requirement under the provisions of section 6(1)(a) of the income tax act, 1961 that the person should be out of the country for the purpose of employment or otherwise. Also, 'purpose of employment', as has been held, is wide enough to include almost all types of stay barring a few like tourism, medical treatment, studies or the like. Secondly the Ld. A.O. held that the assesse had been in India for more than 365 days in the preceding 4 years and had been in India for more than 60 days in the previous year and hence becomes 'Resident' within the meanings of section 6(1)(c) of the act. Whereas the fact remains is that for Indian Citizens the condition of 60 days is replaced by 182 days by Explanation (b) to section 6 (1) of the act. vi. As such there is no finding by the department to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has observed that when the quantum proceedings have been admitted by this court on a substantial question of law, it means that there were debatable and arguable questions raised and so penalty u/s 271(1)(c) cannot be levied. In present case also the quantum proceedings have been admitted by the Hon'ble Bombay High Court for consideration of substantial question of law on residential status of the appellant. b. The Hon'ble Supreme Court of India has clearly held in CIT Vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC) that mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing of inaccurate particulars nor it will amount to concealment of particulars. The present case of the appellant is identical in nature to the above referred case, where he has claimed its residential status as non-resident in the return for A.Y. 2009-10 based on the bona fide belief and facts that he was not in India for 182 days or more in the previous year. However, the Ld. A.O. technically has not counted those impugned 30 days (from the period 14.09.2008 to 13.10.2008) of his stay in Abu Dhabi as his stay abroad and therefore brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that assessee was in India for 847 days during immediately preceding four previous year preceding relevant previous year viz. previous years 2004-05 to 2007-08 . It was submitted that since assessee left India for employment outside India, period of 60 days is to be extended to 182 days for computing residential status of the assessee. It was submitted that assessee was under a bonafide belief that assessee is a non-resident within meaning of Section 6 of the 1961 Act, r.w.s. 2(30) of the 1961 Act . It was submitted that if a claim is made by assessee under a bonafide belief which is not accepted by Revenue that will not automatically lead to levy of penalty u/s. 271(1)(c) of the 1961 Act. 9.3. The Ld. DR on the other hand placed strong reliance on the appellate order passed by Ld. CIT(A) and our attention was specifically drawn to para 6 of Ld. CIT(A) appellate order dated 31.08.2017. 10. We have considered rival contentions and perused the material on record. We have observed that the assessee is an individual. The assessee has claimed that he is non-resident during the previous year relevant to impugned assessment year under consideration, keeping in view provisions of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as well as the relevant material on record. As far as the factual matrix of the case regarding stay of the assessee in India and outside India, the same is not disputed by the parties as reproduced in the foregoing paragraph. There is no dispute that the assessee stayed in India for a period of 847 days in the 4 years preceding the year under consideration. As per provisions of sec.6(1), an individual is said to be resident in India in any previous year if he has satisfied the conditions as provided in clause (a) or (c) of sub-section (1) of sec.6. For ready reference, we quote sec.6(1) as under: "6. For the purposes of this Act,- (1) An individual is said to be resident in India in any previous year, if he- (a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or (b) [* * *] (c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year. [Explanation 1],-In the case of an individual,- (a) being a citizen of India, who leaves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of stay in India is for a period of 182 days by virtue of Explanation to sub-sec.(1). 8. The learned AR of the assessee of the assessee argued that the previous year under consideration is not the first year leaving India because the assessee has been outside India for last so many years, Therefore, clause (b) of the Explanation has to be considered for application in the case of the assessee. According to him, as per clause (b) of Explanation to sec. 6(1) only stay in India has to be counted and not the stay and purpose of stay outside India. 9. The plain reading of the provisions of sec.6(1) as well as Explanation manifest that if an individual who is a citizen of India or a person of Indian origin as per sec.115C of the Act and comes on a visit to India then the second condition of clause (c) of sub-section (1) would be the stay of 182 days instead of 60 days. In the case in hand, assessee has come to India being employed by the Indian company and therefore there is no question of enlarging the period of stay as per provisions of clause (b) of Explanation. Therefore, the assessee will not get the benefit as per the Explanation to sec. 6(1) of the Act simply because neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rescue of Revenue as in the instant case before us and the most appropriate course of action in such situations for tribunal shall be restore the matter back to the file of the AO to adjudicate afresh levy of penalty u/s 271(1)(c) of the 1961 Act against assessee read with Section 274 & 275(1A) of the 1961 Act, wherein the AO be directed to pass penalty order u/s 271(1)(c) of the 1961 Act read with Section 274 & 275(1A) of the 1961 Act. Thus, we are restoring issues in this appeal to the file of the AO for fresh adjudication keeping ,inter-alia, provisions of Section 275(1A) of the 1961 Act. The decision of Hon'ble Gujarat High Court in the case of PCIT v. Geetaben Chandulal Prajapati reported in (2018) 96 taxmann.com 100(Guj.) is relevant. Needless to say that proper and adequate opportunity of being heard shall be provided by the AO to the assessee in accordance with principles of natural justice in accordance with law. The evidences/ explanations submitted by the assessee in its defence in denovo proceedings before the AO shall be admitted by the AO and shall be dealt with on merits in accordance with law. We order accordingly. 11. In the result, the appeal of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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