TMI Blog2007 (1) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... ese circumstances, according to the assessee, the reassessment proceedings should have been dropped by the Assessing Officer. The grievance of the assessee is that the CIT(A) erred in confirming the reassessment order so passed by the Assessing Officer. 3. The factual matrix in which this grievance arises is as follows. The assessee is a Japanese national and was, in the relevant period, employed as Managing Director of the Hitachi CG Motor Engineering Limited ( Hitachi , in short). The assessee filed an income-tax return disclosing an income of Rs. 12,44,286. The salary so disclosed was the salary that the assessee received in Indian Rupees and in India. However, in addition to this salary, the assessee also received part of his salary in US and Japanese currencies. As for salary received in US currency, the assessee disclosed the same in his income-tax return but claimed that the said component of salary is not taxable in India. The amount so claimed to be non-taxable was US $ 18,104 which was equivalent to Rs. 7,10,039 at the relevant point of time. In addition, admittedly the assessee also received a part of salary in Japanese Yens which was not disclosed to the revenue aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer, but a prayer was made for dropping the reassessment proceedings on the following ground : ". . . During our appearance before you (the Assessing Officer), we have pointed out that the full taxes as required by the TDS Officer were paid by the employer on behalf of Mr. T. Etoh for the assessment year under reference, since Mr. T. Etoh had no other income except the salary income paid by the Indian company and the Japanese company. As such, income-tax has been fully discharged in the taxable income of Mr. T. Etoh in his assessment. Considering that there is no loss to the department once that tax has been fully paid by the employer on behalf of Mr. Etoh in the TDS assessment of the employer company and also the fact that Mr. Etoh is out of India, we submit that proceedings under section 148 may be dropped. . . ." Not impressed by this explanation and having noted the fact that though the notice under section 148 is duly served on the assessee, the assessee has not filed the income-tax return in response to the said notice, the Assessing Officer completed the assessment under section 148 read with section 144 of the Act. Aggrieved, assessee carried the matter in appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee will surely get due credit for any taxes paid by Hitachi on his behalf, as long as appropriate certificates for such tax deductions are issued by Hitachi. We are thus urged to reject the grievance of the assessee, and thereby confirm and approve the stand of the authorities below on this point. 8. Having given our careful consideration to the matter, we are unable to uphold the grievance raised by the assessee. The reasons of our decision are as follows. 9. The scheme of tax deduction at source by the employer is part of the mechanism for collection and recovery of taxes from the employees, so far as salary income of the employees is concerned. It is quite distinct from the assessment proceedings of an employee s income which seeks to determine the income actually taxable in the hands of the assessee. Whatever tax is deducted by the employer is given due credit, in accordance with the scheme of the Act, in the hands of the assessee. In the case before us, the actual taxable income of the assessee admittedly was Rs. 81,08,156, whereas his completed assessment only showed an income of Rs. 12,44,286. The balancing figure represents the income escaping assessment. This fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 192, on the salaries and allowances paid abroad, or perquisites provided abroad, to their employees for services rendered in India. . . . All payments and perquisites to the employees for services rendered in India are taxable in India irrespective of place where the payment occurs. The employers are, therefore, liable to deduct tax at source even on payment of salary, allowances or perquisites abroad to the employees who have rendered services in India. . . . . Employers (Indian and foreign), who have committed default in the past are advised to make use of this opportunity to pay up the arrears of TDS (tax deductible at source) together with interest on or before 31-7-1994 and avoid penalty and prosecution proceedings. . . . ." It was in the course of this Amnesty Scheme that the CBDT had granted further relaxation, vide CBDT Circular No. 686 dated 12-8-1994, that in order to fully implement the spirit of Amnesty Scheme set out in the aforesaid circular stated that "the assessment of the employees, in respect of whom payments for short deduction and interest thereon are made by the employers in pursuance of the Circular No. 685, dated 20-6-1994, will not be re-ope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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