9911796707
TMI Blog2021 (8) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed deposits & bank interest amounting to Rs. 17,87,709/- @10% and 15% as per the India-USA DTAA. As is discernible from the records, the assessee, a non-resident individual, had inter alia derived interest income, viz. interest on fixed deposits and bank interest during the year under consideration. On the basis of Sec. 90(2) of the Act, the assessee had in his return of income offered for tax the aforesaid interest income as per the special rate of tax on the basis of the India-USA DTAA. However, as the assessee in the course of the assessment proceedings despite specific direction failed to substantiate that the interest income in question was offered for tax in his return of income filed in U.S.A, the A.O, for the said reason declined to apply the beneficial provisions of the India-USA DTAA. Accordingly, the A.O subjected the interest income to tax as per the normal provisions of the Act. 4. Aggrieved, the assessee assailed the assessment order before the CIT(Appeals). During the course of the appellate proceedings the assessee filed before the CIT(A) by way of additional evidence, viz. (i). Tax Residency Certificate, dated 30.01.2017 (TRC); and (ii). Form 10F, dated 07.05.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arily rejected the admission of the additional evidence. It was further submitted by the ld. A.R that though the assessee due to paucity of time and reasons beyond his control could not file the TRC in the course of the assessment proceedings, however, by the time the same was obtained the assessment proceedings stood culminated. It was submitted by the ld. A.R that the TRC of the assessee was filed by the assessee after the conclusion of the assessment proceedings and is available in the records of the A.O. 6. Per contra, the ld. Departmental representative (for short "D.R") relied on the orders of the lower authorities. It was submitted by the ld. D.R that as the assessee had failed to file the TRC and Form 10F, therefore, the lower authorities had rightly declined the assessee's claim for applying the special rate of tax on his interest income as per the India-USA DTAA. 7. We have heard the ld. Authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. As pointed out by the ld. A.R, and rightly so, the A.O had declined to apply the special rate of tax qua the interest income of the assessee, for the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of any country outside India or specified territory outside India for, inter alia, granting of relief in respect of income-tax chargeable under this Act and under the corresponding law in force in that country or specified territory, as the case may be, to promote mutual economic relations, trade and investment. Sub-section (4) of Sec. 90 sets out as a pre-condition, that a non-resident assessee, to whom an agreement referred to in sub-section (1) of Sec. 90 applies shall not be entitled to claim any relief under such agreement unless a certificate of his being a resident in any country outside India or specified territory outside India, as the case may be, is obtained by him from the Government of that country or specified territory. Accordingly, as per the mandate of sub-section (4) of Sec. 90, the beneficial provisions of a DTAA would stand triggered qua an assessee to whom an agreement referred to in sub-section (1) of Sec. 90 applies, subject to obtaining of a TRC by him from the Government of the country or specified territory of which he is a resident. Insofar sub-section (5) of Sec. 90 is concerned, the same supplements sub-section (4) of Sec. 90, with a condition, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requisite information prescribed in 'Form 10F'. It is, thus, in the backdrop of the aforesaid mandate of law that we shall hereinafter deliberate on the maintainability of the assessee's claim for subjecting of his interest income to tax as per the special tax rates provided in the India-USA DTAA. 8. As is discernible from the records, the assessee had in his return of income offered for tax the interest income on fixed deposits & bank interest amounting to Rs. 17,87,709/- @10% and 15% on the basis of the India-USA DTAA. Admittedly, the assessee had neither filed the TRC nor the Form 10F upto the culmination of the assessment proceedings. Insofar the TRC is concerned, the same is stated to have been filed with the A.O though after the assessment was framed. As observed by us hereinabove, the assessee explaining the reasons as to why the TRC and Form 10F could not be filed in the course of the assessment proceedings had sought for admission of the same as additional evidence by the CIT(A). However, the CIT(A) held a conviction that as per the mandate of Sec. 90(4) and (5) r.w Rule 21AB(2A) the assessee was obligated to have furnished the TRC and 'Form 10F' before the A.O. Having h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utely misconceived and in fact misplaced. As stated by the ld. A.R, and rightly so, the assessee was not seeking credit of taxes paid on his income abroad, but was seeking taxing of his interest income as per the special rates on the basis of the India-USA DTAA. Considering the fact that the assessee had filed the TRC with the A.O though after the conclusion of the assessment, coupled with the reasons that had led to delay in obtaining of the same alongwith the Form 10F, we are unable to persuade ourselves to the summarily rejection or in fact discarding of the same by the CIT(A). We, thus, in the backdrop of our aforesaid deliberations, are of the considered view, that as the assessee had filed the TRC and Form 10F, therefore, there was no justification in declining the applying of the special rate of tax qua the interest income on fixed deposits & bank interest amounting to Rs. 17,87,709/- @10% and 15% that was claimed by him on the basis of the India-USA DTAA in his return of income. 10. We, thus, set-aside the order of the CIT(A) and direct the A.O to determine the taxability of the interest income as per the special rate of tax on the basis of India-USA tax treaty. 11. Resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
