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2018 (2) TMI 976

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 residential status of the assessee from the point of view of the 1961 Act, it is essential to know the period of stay outside India of an individual as is required under the provisions of Section 6 of the 1961 Act r.w.s. 2(30) which we are afraid that this document does not throw any light to conclude that the assessee was non-resident during the relevant period and had satisfied the conditions of being out of India for stipulated period(s). These documents are merely in the nature 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 .....

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said information. She filed Nil Return in reassessment proceedings and claimed that since she was Non Resident during the relevant assessment year, she did not file any return of income for the relevant period with the Revenue. The assessee claimed that she is Non-Resident during the said period but did not file any passport with the AO for the relevant period on the ground that the same was lost . 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 the AO with respect to her stay in India and without any cogent material and verifications , her Non Resident status was accepted by the AO. The Division Bench of the Tribunal confirmed the invocation of provisions of Section 263 by Pr. CIT by holding as under: 8. We have considered rival contentio .....

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e 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 account in Switzerland with HSBC Bank at Geneva. The assessee during re-assessment proceedings did not commented whether she is holding the said bank account with HSBC, Geneva or not as no comments were offered towards the existence of said bank account. The assessee merely stated that she does not have any bank statement with her for relevant period. The assessee had contended that the assessee is Non Resident during the relevant period but no evidence was provided to that effect. It is merely stated 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 provid .....

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any order passed therein by the [Assessing] Officer is erroneousin so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after 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 assessment made by the Assistant Commissioner 2[or Deputy Commissioner] or the Income-tax Officer on the basis of the directions issued by the [Joint] Commissioner under section 144A; (ii) an order made by the [Joint] Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the [Principal Chief Commissioner or] Chief Commissioner or [Principal Director General or] Direct .....

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t June, 2015 by Finance Bill 2015, Explanation 2 to section 263 was inserted to declare the law which reads as under:- [Explanation 2.-For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or 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 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 shall be deemed to be erroneous so far as it is prejudicial to the interest of Revenue. In the instant c .....

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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 considered view, this is irrelevant as her residential status is to be determined u/s 6 of the Act w.r.t. previous year relevant to assessment year 1996-97 which is a relevant assessment year and any passport which is issued post this period i.e. in this case passport no Z003983 issued on 26-12-2006 is totally irrelevant to determine residential status of the assessee for assessment year 1996-97 under consideration . Thus, keeping in view of our above detailed discussions , we uphold the order of 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 .....

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sential to know the period of stay outside India of an individual as is required under the provisions of Section 6 of the 1961 Act r.w.s. 2(30) , which we are afraid that this document does not throw any light to conclude that the assessee was non-resident during the relevant period and had satisfied the conditions of being out of India for stipulated period(s). These documents are merely in the nature 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 India for stipulated period as per conditions stipulated u/s 6 of the 1961 Act. Thus the contention of the assessee lacks merit and her contentions are rejected because the DB of the Tribunal has passed a detailed order after due application of mind wherein all the relevant contentions of the assessee w .....

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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 within limited mandate u/s 254(2) as in our considered view no prejudice is caused to the assessee with the said discussion on the relevant and applicable provision of the 1961 Act, thus in our considered view, there is no mistake apparent from records in the said order of the tribunal which can be corrected within limited mandate of Section 254(2). This ground raised by the assessee also lacks merits and is also rejected. 4. The Division Bench of the tribunal while passing order in ITA no. 2735/Mum/2016 has taken a conscious decision after due application of mind by upholding the decision of Principal CIT in invoking provisions of Section 263 as the AO had accepted the assessee to be Non-Resident during the relevant period merely on the basis of submissions of the assessee without making any enquiry/verification and without any cogent material on record. The assessee did not place passpo .....

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