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Sh. Bimal V. Pala (legal heir of late Smt. Ranjana Vrajlal Pala) C/o HH Parme r & Co. Versus Principal CIT, Mumbai

2018 (2) TMI 976 - ITAT MUMBAI

Rectification of mistake - mistake apparent from records - determination of the residential status of the assessee for period under consideration - Unit Trust of India ( which is claimed to be government documents by the assessee) application forms/ receipts filed by the assessee w.r.t. subscription of US 64 securities issued by UTI in July 1995 which were subscribed by the assessee wherein the assessee declared herself to be Non Resident in the application form - Held that:- To determine the re .....

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tion and are not conclusive to determine residential status of the assessee as required under the provisions of 1961 Act. These are the documents for making investments in UTI in the US 64 securities offered by UTI for which self declaration by the assessee could be sufficient but to establish the residential status in India of the assessee from the view point of the 1961 Act , the assessee has to prove through cogent evidences such as passport to prove her stay outside India for stipulated peri .....

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is hereby rejected. - The assessee did not submit passport for relevant period nor any bank statements were submitted and it was claimed that bank statement and passport was lost. The tribunal has duly deliberated on these issues in its order in details and came to conclusions after due application of mind and the said view of the tribunal is not shown to be a perverse view dehors material on records and hence in our considered view there is no mistake apparent from records in tribunal orde .....

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Appellate Tribunal, Mumbai ( hereinafter called the tribunal ) order dated 17-03-2017 passed by Division Bench in ITA no. 2735/Mum/2016 for the assessment year 1996-97. 2. The brief background of the case is that the Assessing Officer(AO) received information from Investigation wing that the assessee has an account during the relevant year with HSBC Bank at Geneva, Switzerland. The assessee had not filed any return of income with Indian Income Tax Department for the said assessment year 1996-97 .....

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. She also claimed that bank statement and other documents are also lost and she could not recollect any bank transactions during the said period . She also claimed that she did not had any income during the relevant period which could be brought to tax in India. The AO accepted the contentions of the assessee and accepted her to be Non Resident based on her contentions and the assessment was framed at Nil Income. The Pr. CIT invoked provisions of Section 263 as there was no enquiry conducted by .....

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land with HSBC Bank at Geneva. The AO based on such information reopened the assessment u/s 147 of the Act for assessment year 1996-97 by issuing notice dated 26-03-2013 u/s 148 of the Act. The assessee was confronted with the said information during re-assessment proceedings u/s 147 r.w.s. 143(3) of the Act. The assessee in re-assessment proceedings submitted that she is an old lady of 74 years suffering from arthritics. It was submitted that she resided in Bahrain for more than 40 years and ac .....

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e to recollect transaction for assessment year 1996-97 nor she had any bank statement or any other documents of those times to help her recollect the transactions. It was submitted that from the assessment year 2009-10, she was filing return of income in India as resident . It was submitted that in 2007, in Bahrain , the assessee lost her passport which bore the number Z003983 issued on 26- 12-2006, which is reflected in the present passport issued at Bahrain on 09-01-2012 which referred to old .....

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ious year , without any enquiry and verifications based on submissions and claims made by the assessee in her submissions before the AO, for which re-assessment order dated 19.03.2014 was passed by the AO u/s 143(3) r.ws. 147 of the Act. We have gone through the assessment order dated 19.03.2014 passed by the AO u/s 143(3) r.w.s. 147 of the Act as well submissions made by the assessee before the AO. The assessment was re-opened as information was received that assessee was holding an bank accoun .....

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that the assessee resided in Bahrain for last more than 40 years and being Non Resident, the assessee does not have taxable income in India and hence no returns were filed till assessment year 2009-10. No details of actual period of stay out of India and specifically during the previous year relevant to the impugned assessment year as also no details as to fulfilling of the requirements as provided under Section 6 of the Act was furnished by the assessee before the AO. It was merely stated that .....

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case which is not suffering from inadequate enquiry but rather the re-assessment is vitiated by complete lack of enquiry wherein the AO chose not to make any enquiry or verifications whatsoever . The AO while passing re-assessment order dated 19-03- 2014 did not made any enquiry and merely accepted the contentions of the assessee without any verification and enquiry. The re-assessment order dated 19-03- 2014 passed by the AO thus cannot be upheld as it is not based on any cogent material on reco .....

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Act. The AO even did not brought on record whether the assessee was in-fact holding bank account with HSBC , Geneva or not during the relevant previous year or no such bank account was held by her . The assessee has merely stated that she does not have bank statement. Even the passport was stated to be lost and status of the assessee being Non Resident for previous year relevant to assessment year was accepted by the AO on self declaration by the assessee. Attention is drawn to provisions of Se .....

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r making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. [Explanation 1.]-For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed [on or before or after the 1st day of June, 1988] by the Assessing Officer shall include- (i) an order of assessmen .....

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or General or [Principal Commissioner or] Commissioner authorised by the Board in this behalf under section 120; (b) "record" [shall include and shall be deemed always to have included] all records relating to any proceeding under this Act available at the time of examination by the [Principal Commissioner or] Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal [filed on or before or after the 1 .....

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r Commissioner,- (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the .....

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Tribunal,] the High Court or the Supreme Court. Explanation.-In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. We have observed that w.e.f. 1st June, 2015 by Finance Bill 2015, Explanation 2 to section 263 was inserted to declare the law whic .....

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ade in accordance with any order, direction or instruction issued by the Board under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. ] Thus, explanation 2 to Section 263(1) of the Act has introduced deeming provisions where, inter-alia, if the AO did not made the enquiries which it was required to made , the order shal .....

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Taxman 66 (SC) held that if the AO has accepted the entry in the statement of account filed by the taxpayer without making enquiry and application of mind , the said order of the AO shall be deemed to be erroneous in so far as it is prejudicial to the interest of the Revenue. In our considered opinion, the facts of the case of the instant case are similar to the facts in the case of Malabar Industrial Co. Limited(supra) whereby no enquiry/verification is made by AO whatsoever with respect to res .....

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the interest of Revenue, as no enquiry was made by AO as well there was no application of mind while all the submissions of the assessee were accepted without any enquiry/verification. Thus the view of the AO is not a sustainable view as it was not supported by evidence on records and hence was a perverse view which could not be held to be one of the possible view taken by the AO to take the same out of the purview of mandate of Section 263 of the Act. In proceedings u/s 263 of the Act , the as .....

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-07-1994 , and the impugned assessment year is 1996-97. The assessee in her affidavit has averred that the assessee has filed an RTI application with FRRO on 05-11-2015 to obtain her entry into and out of India to confirm her residential staus. The assessee has also averred that she has lost her passport no Z003983 dated 26/12/2006 issued at Bahrain by Indian Consulate which was duly reported to Ministry of Interior at Kingdom of Bahrain , their certificate is placed in page 20-21, but in our co .....

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the learned Pr. CIT passed u/s 263 of the Act setting aside the order of the AO being erroneous and prejudicial to the interest of Revenue on the above mentioned issue and to be set aside the same to the file of the AO for deciding the issue afresh , after due verifications. We order accordingly. 9. In the result, appeal filed by the assessee in ITA No. 2735/Mum/2016 for assessment year 1996-97 is dismissed. 3. The assessee has now filed this MA to rectify mistakes apparent from records u/s 254( .....

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application form filed by the assessee with UTI for allotment of US 64 securities in July 1995 and the said Non Resident status was accepted by UTI, which were placed by the assessee in the paper book page no. 8 to 11 filed with the tribunal during appellate proceedings. It is the claim of the assessee that these documents being government documents are sufficient to classify the assessee to be Non-Resident under the provisions of the Income-tax Act, 1961 . It is submitted by the assessee that t .....

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gs under Income Tax Act, 1961 for which the definition of Non-Resident has been stipulated under the provisions of the 1961 Act namely Section 2(30) r.w.s. Section 6 of the 1961 Act which requires stipulated period of stay outside India for individuals to come within the ambit of being classified as Non-Residents , while in the case of FERA, 1973 it is the intention of the assessee to take up employment, business etc outside India with the intention of settling abroad which was relevant. Thus , .....

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ature of self declaration and are not conclusive to determine residential status of the assessee as required under the provisions of 1961 Act. These are the documents for making investments in UTI in the US 64 securities offered by UTI for which self declaration by the assessee could be sufficient but to establish the residential status in India of the assessee from the view point of the 1961 Act , the assessee has to prove through cogent evidences such as passport to prove her stay outside Indi .....

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Section 254(2) is restricted to correction of the mistakes apparent from record and wherein in the instant case a conscious decision was taken by the DB of Tribunal which is not shown by the assesee to be a perverse view not sustainable in the eyes of law , and hence the same is not amenable to corrections within limited mandate of provisions of Section 254(2). Thus this contention of the assessee lacks merit and is hereby rejected. The assessee has also claimed in this MA that she lost her pass .....

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ontention of the assessee. This ground raised by the assessee in MA is also rejected. The perusal of the assessment order passed by the AO clearly reveals that no enquiry/verification whatsoever was conducted by the AO and contentions of the assessee were accepted by the AO without and enquiry/verification and without any application of mind. The assessee did not submit passport for relevant period nor any bank statements were submitted and it was claimed that bank statement and passport was los .....

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t is the claim of the assessee that provisions of Section 5(2) was discussed by tribunal while the same was not the subject matter of order passed u/s 263. It is only the discussion by the tribunal on the scope of taxability of the income of Non-Residents which was covered by provisions of Section 5(2) and in any case all Non-Residents are covered by said provision which is already placed in statute by legislature which in our considered view did not made tribunal order amenable to corrections w .....

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