TMI Blog2024 (4) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee since the assessee is a non-resident and has rendered services outside India. Thus, the Assessee is eligible for exemption on his salary for services rendered in Australia employment exercised in Australia during his Australia assignment period. In the result, the appeal of the assessee is allowed. - Dr. B. R. R. Kumar, Accountant Member And Sh. Anubhav Sharma, Judicial Member For the Assessee : Ms. Preeti Goel, Adv. For the Revenue : Sh. Vizay B. Vasanta, CIT-DR ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: The present appeal has been filed by the assessee against the order dated 21.12.2022 passed by the AO u/s 143(3) r.w.s. 144C(13). 2. Following grounds have been raised by the assessee: 1. The learned Assessing Officer has in pursuance of the directions of the Hon'ble DRP, in the facts and circumstances of the case and in law erred in issuing the impugned Final Assessment Order dated 21 December 2022 under Section 143(3) read with Section 144C(13) of the Act disallowing the exemption of INR 55,37,591 claimed by the Appellant under Article 15(1) of the India Australia Double taxation Avoidance Agreement (DTAA) read with Section 90 of the Act in ignorance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 60 days during F.Y. 2019-20 and qualified as a Non-Resident in India as per Section 6(1) of the Act. The Assessee qualified as Tax Resident of Australia for the Tax Year (TY) 2018-19 and TY 2019-20. As the Assessee qualified as a Resident of Australia under the domestic tax law of Australia for the TY 2018- 19 and TY 2019-20, and Non-Resident of India. 6. Accordingly, the Assessee qualified as a Resident of Australia as per Article 4(1) of India- Australia Double Taxation Avoidance Agreement (DTAA) between India and Australia for the F.Y. 2019-20. The relevant extract of Article 4(1) of the India- Australia DTAA is as under: 1. For the purposes of this Agreement, a person is a resident of one of the Contracting States if the person is a resident of that Contracting State for the purposes of its tax. However, a person is not a resident of a Contracting State for the purposes of this Agreement if the person is liable to tax in that State in respect only of income from sources in that State; 2. Where, by reason of the provisions of paragraph (I), an individual is a resident of both Contracting States, then the status of that person shall be determined in accordance with the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37,591/- received in India for services rendered in Australia to Nokia Australia was claimed as exempt from tax in India as per Article 15(1) Dependent Personal Services of the India-Australia DTAA, read with Section 90 of the Act. 10. The Assessing Officer initiated scrutiny assessment proceedings vide notice dated 29 June 2021 issued under Section 143(2) of the Act to verify the reduction of income and claim for refund in the Revised ITR filed by the Assessee for F.Y. 2019-20. 11. The AO issued notices dated 25 October 2021 and 3 January 2022 under Section 142(1) and show cause notice dated 28 February 2022 of the Act to seek further details and information from the Assessee in connection with the revised ROI filed by him. 12. In response to the notices issued under Section 143(2), Section 142(1) of the Act, the Assessee had filed the responses vide submission dated 13 July 2021, 8 November 2021 and 7 January 2022 along with documentation/ evidence in support of the exemption claimed under Article 15(1) of the India-Australia DTAA. 13. In response to the show-cause notice dated 28 February 2022 issued by the AO, the Assessee had filed Adjournment letter on 3 March 2022 requesting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnored and incorrectly interpreted by the ld. DRP. c) The contract of employment was executed in India and employment was based in India throughout his Australia assignment. 19. The Assessing Officer has thereafter issued final assessment order under Section 144C(13) read with Section 143(3) of the Act on 21 December 2022 and disallowed the claim for relief on ground that Tax Residency Certificate and Australian tax returns reflecting taxes paid in Australia has not been submitted and that the ld. DRP rejected the Objections raised by the Assessee. 20. Aggrieved by the Final Assessment order issued by the Assessing Officer, the Assessee has filed the present appeal before the Tribunal. 21. Before us, it was submitted that, 1. The Assessee qualified as a Non -Resident in India as per Section 6(1) of the Act as he was present in India for less than 60 days during FY 2019-20. 2. During FY 2019-20, the Assessee an employee of Nokia Solutions and Networks India Private Limited (Nokia India) was on an overseas assignment to Australia and was exercising employment/rendering services in Australia to Nokia Australia from 23 August 2017 to 10 March 2020, post which he was localized in Austra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Australia and exercised employment in Australia with Nokia Australia during the relevant Financial Year. 24. The Assessee produced copies of Assignment Agreement. Passport and Australia tax return evidencing due payment of taxes in Australia in respect of salary paid to him in India for employment exercised in Australia with Nokia. Australia. The TRC was also furnished during proceedings before the DRP as additional evidence in support of the claim for exemption of Salary income under India- Australia DTAA. 25. Further, the following judicial precedents support the contention of the Assessee: a) The Delhi Tribunal in the case of Vishal Gulati vs. ACIT [2024] 159 Taxmann.com 713 where it was held that Where assessee, a non-resident, had rendered services outside India and assessee neither had any rest period nor leave period which was preceded and succeeded by services rendered outside India, salary received by assessee from an Indian company could not be taxed in India. b) The Delhi Tribunal in the case of Anjali Puri vs. ACIT [2024] 159 Taxmann.com 603 where it was held that Where assessee was residing and exercising employment in Ireland under complete control of BA PLC, Irela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Assessee had applied for TRC in Australia for the TY 2018 and TY 2019 and it is pertinent to highlight that the Assessee had received the TRC of Australia issued by the Australia Taxation Office for TY 2019-20 and in this regard an application for admission of additional evidence was filed before the ld. DRP. 28. The undisputed facts are that: The assessee is a NRI The assessee received salary for services rendered outside India The assessee has paid taxes in Australia. Copy of the tax return filed Australian tax authority are filed before the revenue authorities. Assessee had a valid TRC. 29. Under these facts, the taxability of the salary paid by the Indian company to a non-resident is examined with reference to the provisions of Section 5, Section 9, Section 15 of the Income Tax Act, 1961. Section 5 Income Tax Act reads as under: Scope of total income. 5.(1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which- (a) is received or is deemed to be received in India in such year by or on behalf of such person or (b) accrues or arises or is deemed to accrue or arise to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns are not carried out in India, the income of the business deemed under this clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India; (b) in the case of a non-resident, no income shall be deemed to accrue or arise in India to him through or from operations which are confined to the purchase of goods in India for the purpose of export; (c) in the case of a non-resident, being a person engaged in the business of running a news agency or of publishing newspapers, magazines or journals, no income shall be deemed to accrue or arise in India to him through or from activities which are confined to the collection of news and views in India for transmission out of India ; (d) in the case of a non-resident, being (1) an individual who is not a citizen of India ; or (2) a firm which does not have any partner who is a citizen of India or who is resident in India ; or (3) a company which does not have any shareholder who is a citizen of India or who is resident in India, no income shall be deemed to accrue or arise in India to such individual, firm or company through or from operations which are confined to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
