Pappu Singh Rajpurohit, Nairobi Kenya vs Ao (Intl Tax) Jaipur, Jaipur on 17 April, 2023

[Cites 38, Cited by 0]

Income Tax Appellate Tribunal - Jaipur

Pappu Singh Rajpurohit, Nairobi Kenya vs Ao (Intl Tax) Jaipur, Jaipur on 17 April, 2023

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        IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,"B" JAIPUR

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  BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM

                       vk;dj vihy la-@IT(IT) A Nos. 02 & 03/JP/2023
                       fu/kZkj.k o"kZ@Assessment Years : 2018-19 & 2019-20

    Pappu Singh Rajpurohit                   cuke AO
    D3, Arm Cement Limited Kaloleni,         Vs.    (Circle Intl Tax Jaipur)
    Kaloleni-157 Kilifi County                      Jaipur
    Mombasa 999999, Foreign Kenya
    LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AJYPR 6413 P
    vihykFkhZ@Appellant                                 izR;FkhZ@Respondent

   fu/kZkfjrh dh vksj l@
                       s Assessee by : Sh. Om Prakash Rajpurohit (CA) &
                                   Sh. Rajat Mohan (CA)
    jktLo dh vksj ls@ Revenue by : Smt. Runi Pal (Addl. CIT)

     lquokbZ dh rkjh[k@ Date of Hearing         : 20/03/2023
     mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 17/04/2023
                                     vkns'k@ ORDER

PER: RATHOD KAMLESH JAYANTBHAI, AM These two appeals are filed by the assessee aggrieved from the order of the Commissioner of Income Tax (Appeal), Delhi-42 [ Here in after referred as Ld. CIT(A) ] for the assessment year 2018-19 & 2019-20 dated 25.11.2022 as per provision of section 250 of the Act, which in turn arises from the order passed by the DCIT, Circle, International Taxation, Jaipur passed under Section 154 of the Income tax Act, 1961 (in short 'the Act') dated 29.11.2021.

IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO

2. Since the issues involved in the assessee's appeal for both the years the grounds are almost identical, issues are almost common, except the difference in figure of additions disputed, therefore, both these appeals were heard together with the agreement of both the parties and are being disposed off by this consolidated order.

3. At the outset, the ld. AR has submitted that the matter in ITA no.

IT(IT)/2/JPR/2023 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are exactly identical except the difference in the amount in other assessment year. The ld. DR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. IT(IT)/2/JPR/2023 is taken as a lead case. Based on the above arguments we have also seen that for both the appeals grounds are similar, facts are similar and arguments were similar and therefore, were heard together and are disposed by taking lead case facts, grounds, and arguments from the folder in ITA No. IT(IT)/2/JPR/2023.

IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO

4. Before moving towards the facts of the case we would like to mention that the assessee has assailed the appeal in ITA No. IT(IT)/2/JPR/2023 on the following grounds;

"1. That on the facts and in the circumstances of the case, the Ld. CIT (A) erred in fact as well as in law affirming the action of Ld. AO, passing an order under section 154 r.w.s 143(1) of the Income-tax act and raising a demand of Rs. 10,03,130 /-.

2. That on the facts and in the circumstances of the case, the Ld. CIT (A) erred in affirming the action of Ld. AO, in not appreciating the fact that the entire income of the appellant accrued, earned and received outside India (i.e., Kenya), the appellant being a non-resident as per section 5 of the Act, is not liable to pay tax on income earned outside India.

2.1. That on the fact and in the circumstances of the case, The Ld. CIT (A) and Ld. AO erred in fact as well as in law that income tax can be levied upon the appellant only if the income is chargeable to tax and not otherwise.

3. That on the facts and in the circumstances of the case, the Ld. CIT (A) and the Ld. AO without appreciating the fact that the mistake captured in the intimation order passed u/s 154 r.w.s 143(1) of the Act is based on the mistake apparent from the record in Income-Tax Returns.

3.1. That on the facts and circumstances of the case and in law, the Ld. CIT (A) and Ld. AO has erred in not appreciating the undisputed fact that the Appellant was not required to pay taxes in India, and the income disclosed by the Appellant was clearly a mistake visible on the record, making it eligible for rectification.

3.2. That on the facts and in the circumstances of the case and in law, the Ld. CIT (A)and Ld. AO has erred in not considering the fact that the case of the Appellant is a mistake that is clear, glaring, and which is capable of being ratified by the Ld. AO

4. That on the facts and in the circumstances of the case and in law, the Ld. CIT (A) and Ld. AO has erred in not considering the fact that the Intimation under section 143(1) has been received by the appellant on 25 November 2020 i.e., after the lapse of the last date of the filling revised return i.e., (31st March 2020), thereby, making it impossible to revise the return of income and left with the available option of filling an application under section 154 of the Act.

5. That on the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in affirming the action of Ld. AO in considering the facts of the case as per their own convenience and disallow the Foreign Tax Credit (FTC) on the 4 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO ground that the "appellant is not being a resident" is not liable to claim the Foreign Tax Credit (FTC) and at the same time by treating the Appellant's salary income as taxable in India even though the same was earned and received outside India and not liable to be taxed in India being non-resident.

All of the above Grounds of Appeal are independent of and without prejudice to each other.

The Appellant craves leave to add to or alter, by deletion, substitution, or otherwise, any or all of the foregoing grounds of appeal at or before the hearing, and to submit such statements, documents, and papers as may be considered necessary either at or before the appeal hearing."

5. The fact as culled out from the records is that the appellant, a non-

resident Indian filed his return of income on 04.06.2018 offering salary income of Rs. 31,78,220/- and seeking foreign tax credit w.r.t. taxes paid in Kenya. The return was processed by CPC u/s 143(1) of the Act and intimation dated 25.11.2020 was issued wherein no adjustment was made to the returned income but the claim of foreign tax credit of Rs. 7,88,945/-

made in the return was not allowed by the CPC. The appellant filed a rectification application u/s 154 of the Act with the AO via e-mail dated 14.05.2021. The same was rejected by the AO on the ground that the application did not come under the purview of section 154 of the Act and the same was conveyed to the appellant vide e-mail dated 15.06.2021. The appellant again filed a detailed application for rectification on 09.08.2021.

This application was rejected by the AO vide a speaking order dated 29.11.2021 on the ground that the case did not fall under the purview of section 154 of the Act as it is not a mistake that is apparent from record.

IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO

6. As the assessee is aggrieved with the order of the ld. AO passed u/s 154 of the Act, he has preferred an appeal before ld. CIT(A) and the same was dismissed. The relevant finding of the ld. CIT(A) apropos to the grounds so raised by the assessee, the relevant finding of the ld. CIT(A) is as under:-

"9.1 It is an undisputed fact that the appellant had himself voluntarily offered salary income for taxation in India and had declared gross tax liability of Rs. 7,88,495/- in the said return. The appellant had also claimed tax relief of Rs. 7,88,495/- u/s 90/90A of the Act and had uploaded Form no. 67 electronically.

9.2 The appellant has contended that the salary income was earned outside India and was offered inadvertently. It is undisputed that the appellant has not filed any revised return prescribed under law. The CPC processes returns of income u/s 143(1) of the Act based on the information provided by the assessee in a system driven environment without any manual intervention. Therefore, when the appellant had himself offered salary income for taxation, and no revised return was filed, it cannot be said that the CPC committed any mistake in accepting the return of income. So far, the credit of FTC is concerned, the same was not allowed to the appellant as the appellant, as per his own admission, was a non- resident. The FTC is allowable to a Resident assessee in respect of income taxable in India in respect of which tax has been paid in a foreign country. In view of these facts, no infirmity is found in the order of the CPC in denying the FTC to the appellant.

9.3 It is also undisputed that the appellant did not file any appeal against the order u/s 143(1) but has preferred appeal only against order u/s 154 of the Act. The scope of section 154 is very limited and it covers only prima facie, patent and obvious mistakes arising from record on issues which are not debatable. Whether certain income was taxable or not is a debatable issue and can be determined only upon detailed examination and enquiry. This issue is beyond the scope of rectification that can be made u/s 154 of the Act. The AO's impugned order is found to be justified on this count as well.

9.4 The appellant has raised a ground that he had bona fide intention and no mens rea was involved in his action. It is observed that this is not a matter involving prosecution or imposing penalty upon the appellant but a simple case of processing of return by CPC accepting the data himself provided by the appellant voluntarily in the return of income. This ground is dismissed.

IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO 9.5 In this case, the appellant has not filed a revised return. Without prejudice to this fact, it is observed that even a revised return could not be of any help to the appellant in view of the recent decision of Hon'ble Supreme Court in Pr. CIT v. Wipro Ltd. [2022] 140 taxmann.com 223, wherein the Hon'ble Supreme Court, in para 9 of the order, has laid down that by filing the revised return, the assessee cannot be permitted to substitute the original return filed under s. 139(1). The Apex Court has laid down the law that filing a revised return under Section 139(5) of the Act and taking a contrary stand and/or claiming the exemption, which was specifically not claimed earlier while filing the original return of income is not permissible. Applying the decision to the facts of the case show that once the appellant has himself offered certain income as taxable in the return, he cannot subsequently take a contrary stand and claim such income as exempt.

9.6 In view of the overall discussion made above, the action of the CPC in accepting the returned income and declining credit of FTC are found to be in order. All grounds of appeal are dismissed."

7. As the assessee did not find any favour from the order of the ld.

CIT(A), the assessee has preferred the appeal before this Tribunal on the ground as reproduced hereinabove. To support various grounds so raised by the ld. AR of the assessee, he has filed the written submissions as reproduced herein below.

"Brief facts

1. The appellant, Mr Pappu Singh Rajpurohit, is a non-resident citizen of India for the purpose of the Income Tax Act, 1961. The appellant left India for the purpose of employment on 21st February 2013 for the first time and since then the appellant has been living outside India and occasionally comes for short visits to India.

2. That the appellant had stayed in India for 70 days during the previous year 2017-18 and a total of 122 days in the 4 previous years preceding the relevant previous year. Basis the same and in terms of the provision of Section 6 of the Act, the Appellant was a non-resident of India during AY 2018-19.

3. That the Appellant has been residing in Kenya for the past few years, at 'D3, Arm Cement Limited Kaloleni, 157 Kilifi County, Mombasa, Kenya' and has earned salary income from ARM Cement PLC, Nairobi, Kenya ('ARM Kenya'). Since, he has been residing in a foreign county (i.e., Kenya), thus, he has been abiding by the tax laws of 7 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO the said country and offering and paying taxes on the income earned in the said foreign country.

4. That the Appellant had earned salary income during the year under consideration from his employer - ARM situated in Kenya and did not have any taxable income in India except interest income, which was also below the basic exemption limit. Therefore, as per section 139(1) of the Act, the Appellant was not even liable to file the return of income in India as the interest income of INR 2,318/- earned in India is much below the basic threshold exemption limit.

5. That it is important to mention that, being a layman non-resident Indian, the appellant had e-filed his return of income on July 04, 2018 vide acknowledgement no. 633341020040618 for the AY 2018-19 and inadvertently declared and offered to tax his foreign salary income from AMR Kenya (amounting to Rs. 31,78,220) as taxable income in India along with foreign tax credit w.r.t. taxes paid in Kenya.

6. That while processing the income-tax return under section 143(1) of the Act, the Revenue had categorically chosen a certain portion of information, which means thereby, the tax department had treated the Appellant's salary income as taxable in India even though the same was earned and received outside India and not liable to be taxed in India. At the same time, while processing the return of income, the tax department had completely ignored the foreign tax credit as per revenue's own convenience. As a result of pick & choose strategy, an incorrect tax demand of Rs. 10,03,130 for the AY 2018-19 has arisen.

7. That the appellant had filed a rectification application under section 154 of the Act via Email dated May 14, 2021, along with all the necessary documents which were later rejected by the Ld. AO over the Email. Further, the appellant again filed a detailed submission for rectification on August 09, 2021.

8.That the application was also rejected and passed the rectification order under section 154 of the Act ('impugned order') on November 29, 2021, vide DIN ITBA/REC/S/154_1/2021-22/1037352954(1) and compute the tax demand of Rs. 10,81,232 along with interest.

8. That aggrieved by the rectification order the appellant filed an appeal before the Ld. CIT (A) which was also dismissed by the order Dated 25th November, 2022 vide DIN 8 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO ITBA/APL/S/250/2022-23/1047657415(1). (Kindly refer Pg no. 7 - 35 of the paper book for CIT Order)

9. That aggrieved by the decision of the Ld. CIT (A) The appellant has filed the present appeal before the Hon'ble Tribunal.

That the respondent herein is filing in the present Memorandum of appeal on the following grounds, which are without prejudice to one another. The respondent herein craves leave to add, modify, amend and forgo any of the aforesaid grounds at the time of the hearing.

GROUNDS OF APPEAL

1. That on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax 'Appeal' (hereinafter referred to as Ld. CIT (A)) erred in fact as well as in law affirming the action of Ld. Assessing Officer (hereinafter referred to as Ld. AO), passing an order under section 154 r.w.s 143(1) of the Income-tax act and raising a demand of Rs. 10,03,130/-.

2. That on the facts and in the circumstances of the case, the Ld. CIT (A) erred in affirming the action of Ld. AO, in not appreciating the fact that the entire income of the appellant accrued, earned and received outside India (i.e., Kenya), the appellant being a non-resident as per section 5 of the Act, is not liable to pay tax on income earned outside India.

2.1 That on the fact and in the circumstances of the case, The Ld. CIT (A) and Ld. AO erred in fact as well as in law that income tax can be levied upon the appellant only if the income is chargeable to tax and not otherwise.

3. That on the facts and in the circumstances of the case, the Ld. CIT (A) and the Ld. AO without appreciating the fact that the mistake captured in the intimation order passed u/s 154 r.w.s 143(1) of the Act is based on the mistake apparent from the record in Income-Tax Returns.

3.1 That on the facts and circumstances of the case and in law, the Ld. CIT (A) and Ld. AO has erred in not appreciating the undisputed fact that the Appellant was not required to pay taxes in India, and the income disclosed by the Appellant was clearly a mistake visible on the record, making it eligible for rectification.

IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO 3.2 That on the facts and in the circumstances of the case and in law, the Ld. CIT (A)and Ld. AO has erred in not considering the fact that the case of the Appellant is a mistake that is clear, glaring, and which is capable of being ratified by the Ld. AO.

4. That on the facts and in the circumstances of the case and in law, the Ld. CIT (A) and Ld. AO has erred in not considering the fact that the Intimation under section 143(1) has been received by the appellant on 25 November 2020 i.e., after the lapse of the last date of the filling revised return i.e., (31st March 2020), thereby, making it impossible to revise the return of income and left with the available option of filling an application under section 154 of the Act.

5. That on the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in affirming the action of Ld. AO in considering the facts of the case as per their own convenience and disallow the Foreign Tax Credit (FTC) on the ground that the "appellant is not being a resident" is not liable to claim the Foreign Tax Credit (FTC) and at the same time by treating the Appellant's salary income as taxable in India even though the same was earned and received outside India and not liable to be taxed in India being non-resident.

Grounds-wise submissions are as follows: -

Ground No. 1 is reproduced herein under as follow

1. That on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax 'Appeal' (hereinafter referred to as Ld. CIT (A)) erred in fact as well as in law affirming the action of Ld. Assessing Officer (hereinafter referred to as Ld. AO), passing an order under section 154 r.w.s 143(1) of the Income-tax act and raising a demand of Rs. 10,03,130/-.

Submission 1.1. That it is humbly submitted before the Hon'ble tribunal that the appellant in the present appeal petition is a peace-loving and law-abiding citizen of India. The petitioner is working for his livelihood as an engineer in Kenya since 2013.

1.2. It is humbly submitted that the appellant had received correspondence from CPC on his registered email on April 24, 2018, stating that Form 67 (the form to be furnished for availing credit of taxes paid in foreign countries under Section 90 of the Act) (Kindly refer Pg no. 66 of the paper book for E-email) is required to be filed before the due date for filing an income tax return.

1.3. It is humbly submitted that the appellant, in its bona fide contention, thought that the Government of India required every citizen of India to furnish this form to know the 10 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO countries from which they are deriving their income. With this Dinkum intent, the appellant furnished the ITR along with Form-67 on the income tax portal.

1.4. It is humbly submitted before the Hon'ble Tribunal that the ITR of the appellant got processed under section 143(1) of the Act. It is further submitted that the tax return filed by the appellant duly processed declaring his foreign-sourced salary income aggregating to INR 31,78,218/- from ARM-Kenya be taxable in India. However, the credit of the taxes paid by him aggregating to INR 7,88,945/- in a foreign country was not allowed.

1.5. That it is humbly submitted before the Hon'ble Tribunal that the Income which was considered to be taxable in India by the revenue was not even taxable income as the assessee was a non-resident for the tax purpose as per section 6 of the Income-tax Act and also the Income of the assessee was accrued and received outside India.

1.6. That it is humbly submitted before the Hon'ble Tribunal that the Hon'ble High court of Madhya Pradesh directed the revenue to refund the whole tax paid on the exempted/ not taxable income of the assessee in the case of Madan Gopal Singh Nagi v.Commissioner of Income-tax [2020] 113 taxmann.com 581 (Refer Pg no. 67-70 of the paper book for caselaw) The court held as under:-

"16. The Court records and reiterates its absolute commitment to adherence of Rule of Law in its strictest terms, without carving out any exception to it, however it intends to convey its concern for the welfare of the "War Heros" who marvels at the Borders and within the Country, should not be unnecessarily Harassed or Troubled, for Technical adherence to some archaic administrative procedures having no thoughtful purpose sought to be achieved, while denying Legitimate Relief to the Members of the Armed Forces. TANVI"

17. Resultantly the respondent is directed to refund the entire amount of income tax they have recovered, which was an exempted amount and which the petitioner has paid in respect of his disability pension.

18. The exercise of refunding the amount be concluded within a period of 30 days from the date of receipt of certified copy of this order. Authorities shall be free to pass appropriate order in the matter of refund and the petitioner shall be entitled for interest @ 12% per annum from the date the amount was deposited with the income tax department till the amount is paid.

1.7. That in another case having the same sets of facts, the Hon'ble High court of Madhya Pradesh further affirmed its earlier judgement and held as under in the case of Colonel Ashwani Kumar Ram Singh ... vs Principal Commissioner Of Income Tax 11 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO Decided on 29 August 2019 Writ Petition No.8858/2019(Refer Pg no. 71-76 of the paper book for caselaw) "This Court in the case of Colonel Madan Gopal Singh Negi v/s CIT (II) (W.P. No.29017/2018) vide judgment dated 28.02.2019, in similar circumstances has held as under- "In the considered opinion of this Court, as the income of the petitioner was exempted, the department does not have any other choice except to refund the amount and the disabled Army Officer cannot be made to run from pillar to post on account of various technicalities as stated in the writ petition. This Court is aware of its limitation of not Travelling and Traversing into the prohibited territory of "Legislating through Court orders" however this Court feels duty bound to state the obvious, more so when the "Call of Duty" of a Judge in spite him to Underline the requirement of brushing aside the "Administrative Technicality" while Dispensing Justice. Our Army Soldiers, Naval Officials and Fighter are Day and Night protecting Our Territorial Borders from Enemy Infiltration and Attacks and even while putting their life to the greatest risk, are keeping all Citizens safe and Secure and making Our life free from all such Dangers, where they don't think of "Technicalities" while Fighting with Enemies at the Front, as to whether pulling the Trigger of their Gun would invite a "Court of inquiry" and from this practical perspective this Court wants to express its concern for not putting too much of technicalities in such matters by those who are invested with Administrative Powers to deal and decide the affairs of the Personnel of Indian Armed Forces. The Court records and reiterates its absolute commitment to adherence of Rule of Law in its strictest terms, without carving out any exception to it, however it intends to convey its concern for the welfare of the "War Heros" who marvels at the Borders and within the Country, should not be unnecessarily Harassed or Troubled, for Technical adherence to some archaic administrative procedures having no thoughtful purpose sought to be achieved, while denying Legitimate Relief to the Members of the Armed Forces."

1.8.That the Hon'ble Supreme court in the case of Navnit Lal C. Javeri Versus K.K. Sen, Appellate Assistant Commissioner of Income-tax 1965] 56 ITR 198 (SC) (Refer Pg no. 77-91 of the paper book for caselaw) held as under:-

"The imposition of a tax is a restriction on the right of an assessee to hold property and a particular tax can be justified only as a reasonable restriction on the exercise of that right in the interests of the general public."

That as held by the Hon'ble Supreme court of India a tax can only be imposed when the tax imposition is justified as a reasonable restriction. It is humbly submitted that the phrase 'reasonable restriction connotes that the limitation imposed upon a person in the enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interest of the public. It is 12 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO humbly submitted before the Hon'ble Tribunal that in the present case, the tax has been imposed without having any locus standi hence it cannot be termed as a reasonable restriction.

1.9. That the Hon'ble Supreme court of India in the case of Commissioner of Income- tax v. Shelly Products [2003] 129 Taxman 271 (SC) (Refer Pg no. 92-103 of the paper book for caselaw) held as under: -

"31. We cannot lose sight of the fact that the failure or inability of the revenue to frame a fresh assessment should not place the assessee in a more disadvantageous position than in what he would have been if a fresh assessment was made. In a case where an assessee chooses to deposit by way of abundant caution advance tax or self-assessment tax which is in excess of his liability on the basis of return furnished or there is any arithmetical error or inaccuracy, it is open to him to claim refund of the excess tax paid in the course of assessment proceeding. He can certainly make such a claim also before the concerned authority calculating the refund. Similarly, if he has by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from payment of income-tax, or is not income within the contemplation of law, he may likewise bring this to the notice of the assessing authority, which if satisfied, may grant him relief and refund the tax paid in excess, if any. Such matters can be brought to the notice of the concerned authority in a case when refund is due and payable, and the authority concerned, on being satisfied, shall grant appropriate relief. In cases governed by section 240 of the Act, an obligation is cast upon the revenue to refund the amount to the assessee without his having to make any claim in that behalf. In appropriate cases therefore it is open to the assessee to bring facts to the notice of the concerned authority on the basis of the return furnished which may have a bearing on the quantum of the refund, such as those the assessee could have urged under section 237 of the Act. The concerned authority, for the limited purpose of calculating the amount to be refunded under section 240 of the Act, may take all such facts into consideration and calculate the amount to be refunded. So viewed an assessee will not be placed in a more disadvantages position than what he would have been, had an assessment been made in accordance with law."

That the Hon'ble Supreme court in the present case while discussing the issue held that if the assessee made any mistake on account of ignorance and paid taxes for the income which was otherwise exempted from the tax the assessee may bring that fact to the knowledge of the authorities and the authorities may grant him appropriate relief.

IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO That it is humbly submitted that, in the present case also the appellant has made a bonafide mistake while and included his exempted/ non-taxable income in the income tax return and also duly communicated the fact to the knowledge of the authorities but the authorities ignored the provisions of the laws by not granting the appropriate relief to the appellant.

1.10. That further in the case of Price Waterhouse Coopers (P.) Ltd. commissioner of Income-tax, Kolkata [2012] 25 taxmann.com 400 (SC) (Refer Pg no. 104-108 of the paper book for caselaw), the Hon'ble Supreme court held that "19.The contents of the Tax Audit Report suggest that there is no question of the assessee concealing its income. There is also no question of the assessee furnishing any inaccurate particulars. It appears to us that all that has happened in the present case is that through a bona fide and inadvertent error, the assessee while submitting its return, failed to add the provision for gratuity to its total income. This can only be described as a human error which we are all prone to make. The calibre and expertise of the assessee has little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a case such as the present does not mean that the assessed is guilty of either furnishing inaccurate particulars or attempting to conceal its income."

"20. We are of the opinion, given the peculiar facts of this case, that the imposition of penalty on the assessee is not justified. We are satisfied that the assessee had committed an inadvertent and bona fide error and had not intended to or attempted to either conceal its income or furnish inaccurate particulars."

That as stated by the Hon'ble supreme court of India humans are prone to mistakes and always subject to inadvertent error, and in case the assessee has made any inadvertent error so the assessee should not be held guilty of either offence on account of his inadvertent mistake, in the present case also the revenue has penalized by way of issuing a demand of Rs. 10,03,130/-. on account of the bonafide mistake of the assessee which should be quashed.

Ground No. 2 is reproduced herein under as follow

IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO 2.1 That on the fact and in the circumstances of the case, The Ld. CIT (A) and Ld. AO erred in fact as well as in law that income tax can be levied upon the appellant only if the income is chargeable to tax and not otherwise.

Submissions 2.1.It is humbly submitted before the Hon'ble Tribunal that the appellant had left India for the purpose of employment with ARM Cement PLC, Nairobi, Kenya on 21st February 2013. Since then, the appellant has made various occasional short trips to India to meet his family and friends. (Kindly refer to Pg no 109-113 of the paper book for the appellant's offer letter) 2.2.That the appellant stayed in India for an aggregate of 122 days in the 4 previous years immediately preceding the previous year under question. (Please refer Pg no. 114-127 of the paper book for the passport, visa and summary chart for the same). Consequently, making the appellant a non-resident within the meaning of section 6 of the Act. The Relevant portion of section 6 of the Act is reproduced herein below: -

Section 6 For the purposes of this Act, --

(1) An individual is said to be resident in India in any previous year if he--

(a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or

(b) [***]

(c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.

2.3. That further it is humbly submitted that the appellant had stayed only for 70 days in the previous year 2017-18 and, as the appellant left India for the purpose of taking up the employment and, thus, in accordance with Explanation 1(a) of Section 6(1) of the Act, the appellant is 'non-resident'.

2.4.That it is humbly submitted that as the appellant is non-resident in terms of section 6 of the Act, thus, as per section 5 of the Act, the taxable income in India of a non- resident includes only the following incomes:

a. Income received or is deemed to be received in India in such year by or on behalf of such person; or 15 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO b. Accrues or arises or is deemed to accrue or arise to him in India during such year.

That the relevant portion of Section 5 of the Income-tax Act is reproduced here as follows: -

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 him in India during such year ; or

Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6) of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India.

(2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non-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 him in India during such year.

Explanation 1.--Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India. Explanation 2.--For the removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued or arisen or is deemed to have accrued or arisen to him shall not again be so included on the basis that it is received or deemed to be received by him in India.

That it is humbly submitted before the Hon'ble tribunal that the income of the appellant in the present case the income of the appellant is accrued, earned and received outside of India hence the present income of the appellant is not liable to pay tax in India.

IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO That it is further submitted before the Hon'ble Tribunal that as per section 139(1) of the Act, the Appellant was not even liable to file the return of income in India as the interest income of INR 2,318/- earned in India is much below the basic threshold exemption limit.

2.5.That the Hon'ble High Court of Karnataka in the case of Prahlad vijendra Rao [ITA No. 838/2009] has held as under (Refer Pg no. 128-135 of the paper book for case law)

7. the explanation of section 9(1)(ii) has been taken note of while answering the substantial question of law in favour of the assessee and to negative the contentions of the revenue. Applying the said principles to the facts of the present case and number of days worked by the assessee outside India as extracted in assessment order when taken into consideration it would emerge that assessee was working outside India for a period of 225 days and the income in question earned by the assessee had not accrued in India and is not deemed to have accrued in India. As such the contention of the revenue cannot be accepted."

That the Hon'ble Court while deciding the scope of section 5 and section 9 of the Income Tax Act 1961 affirmed that if the income of the assessee had not accrued in India and is not deemed to have accrued in India the same cannot be liable to pay tax in India as in the present case also the income of the appellant has been accrued, arise, and received outside India.

2.6.That further the Hon'ble Bangalore ITAT in case of Bholanath Pal v. ITO [ITA No.10/Bang/2011] has held as under: (Refer Pg no. 136-146 of paper book for caselaw) "As per section 15, salary is not taxable on receipt basis except in case of advance salary or arrears salary. Regular salary under section 15(1)(a) is taxable on accrual basis. Salary is accrued where the employment services are rendered. In the instant case, for the assessee, the normal place where the employment services rendered is in Japan and not in India. His visits to India are in connection with business and not for rendering employment services for any Indian entity. There is no employment agreement for having rendered any services for Indian entity. In the instant case, the salary accrues to the assessee in Japan and the accrued salary is partly delivered by Motorola India in India. Hence, there is no accrual of salary in India."

In terms of section 9(1)(ii) income chargeable under the head "salaries" under section 15 shall be deemed to accrue or arise in India if it is earned in India, i.e., if the services under the agreement of employment are or were rendered in India. In the instant case, the employment services were entirely rendered outside India. Hence, the salary is not earned for rendering 17 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO services in India. Therefore, salary for the entire year is not taxable. In this connection, reliance is placed on the following decisions:-

(a) DIT (Intnl. Taxation) v Prahlad Vijendra Rao (2011) 198 Taxman 551 (Kar.)/(2011)24 CTR Kar.) 107;

(b) Ranjit Kumar Bose v ITO (1986) 18 ITD 230 (Calcutta ITAT);

(c) CIT v Avtar Singh Wadhwan (2001) 247 ITR 260 (Bom.);

(d) Sreenivas Kumar Sistla (AAR No.514 of 2000).

For the aforesaid reasons, the salary which was received by the assessee for the services rendered in Japan for the period 1/4/2005 to 31/3/2006 is not liable to tax in India."

The Hon'ble court while deciding the matter held that the salary income received for the services rendered in Japan will not be taxed in India. In the present case also the whole income of the appellant received outside India with respect to services rendered in Kenya, hence the income of the appellant cannot be subject to tax in India.

2.7.That the Hon'ble Bombay High Court in case of Balmukund Acharya vs DCIT [2009] 176 Taxman 316 (Bombay)] held that it was obligatory on the part of the Assessing Officer to apply his mind to the facts disclosed in the return and assess the assessee keeping in mind the law. The relevant extract has been reiterated as follows: (Refer Pg no. 147-160 of the paper book for caselaw) "31. various High Courts have ruled that the authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If any assessee, under a mistake, misconceptions or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected (see S.R. Kosti v. CIT [2005] 276 ITR 165 (Guj.), CPA Yoosuf v. ITO [1970] 77 ITR 237 (Ker.), CIT v. Bharat General Reinsurance Co. Ltd. [1971] 81 ITR 303 (Delhi), CIT v. Archana R. Dhanwatey [1982] 136 ITR 355(Bom.).

32. If particular levy is not permitted under the Act, tax cannot be levied applying the doctrine of estoppel. (See Dy. CST v.reeni Printers [1987] 67 SCC 279.

33. This Court in the case of Nirmala L. Mehta v. A. Balasubramaniam, CIT [2004] 269 ITR 1 has held that there cannot be any estoppel against the statute. Article 265 of the Constitution of India in unmistakable terms provides that no tax shall be levied or collected except by authority of law.

IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO Acquiescence cannot take away from a party the relief that he is entitled to where the tax is levied or collected without authority of law. In the case on hand, it was obligatory on the part of the Assessing Officer to apply his mind to the facts disclosed in the return and assess the assessee keeping in mind the law holding the field."

That in the present matter also the tax has been imposed by the Assessing Officer overriding the provisions of the Income-tax Act hence without the authority of law and without applying the judicial mind. Hence the present order in the question should be set aside.

Ground No. 3 is reproduced herein under as follow

3.1. That on the facts and circumstances of the case and in law, the Ld. CIT (A) and Ld. AO has erred in not appreciating the undisputed fact that the Appellant was not required to pay taxes in India, and the income disclosed by the Appellant was clearly a mistake visible on the record, making it eligible for rectification.

3.2.That on the facts and in the circumstances of the case and in law, the Ld. CIT (A)and Ld. AO has erred in not considering the fact that the case of the Appellant is a mistake that is clear, glaring, and which is capable of being ratified by the Ld. AO.

Submissions 3.1.It is humbly submitted before the Hon'ble Tribunal that, the appellant had filed a rectification application under section 154 of the Act via Email dated May 14, 2021, along with all the necessary documents (Kindly refer to Pg no. 161-163 of the paper book for the Email). In response to the said email, the appellant received an Email reply dated June 15, 2021, stating that the case of the appellant does not come under the purview of section 154 of the Act.

3.2. That it is further humbly submitted before the Hon'ble Tribunal that, the appellant through his consultant filed a detailed reply via email dated August 09, 2021, requesting the Ld. AO to consider the case a fit for section 154 of the Act, basis various judicial precedents mentioned in the mail. In response to the afore-sent email, the appellant was in receipt of a notice dated August 19, 2021. (Kindly refer to Pg no. 165-166 of the paper book for notice) directing the appellant to furnish certain documents in support of his contentions. In response to this, the appellant furnished a detailed reply dated August 25, 2021, along with all the requisite documents and records. (Kindly refer to Pg 19 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO no. 169-276 of the paper books for the detailed submission along with requisite documents).

3.3.That is further submitted before the Hon'ble Court that the rectification application was ultimately accepted by the Ld. AO, however, on November 29, 2021, an adverse rectification order (Kindly refer to Pg no. 277-285 of the paper book for the order and along with the computation sheet) computing the tax demand of INR 10,81,232 (including interest) was passed in haste without applying the mind and totally disregarding the correct disclosures made by the appellant in return of income w.r.t. 'non-residential status' and 'source of income' as disclosed in 'Part A - General' and 'Schedule S: Details of Income from salary' respectively in Form ITR-2 for the AY 2018-

19. (Kindly refer to Pg no.291=316 of the paper books for ITR).

3.4. It is humbly submitted before the Hon'ble Tribunal that due to a lack of awareness regarding Income tax Act, the appellant furnished his return of income declaring his non-taxable salary income erroneously. However, this inadvertent error on the part of the appellant does not dissolve the Ld. AO from his responsibility of correctly assessing the total income taxable in India, especially, where the appellant has correctly disclosed the details w.r.t. his 'non-resident status' and 'source of salary income' in ITR itself.

3.5. It is humbly submitted that while passing the adverse rectification order, the Ld. AO contended that the mistake on the part of the appellant in declaring his foreign sourced salary income is outside the purview of 'mistakes apparent from the record', however, the said contention of the Ld. AO is bad and not tenable in law, as the perusal of the provision of section 154 of the Act vis-à-vis judicial precedents clearly states that the mistake on part of the appellant does not absolve the Ld. AO from his obligation in extending the due benefit as laid under the remedial provisions of the Act.

3.6. That the Hon'ble Chennai ITAT in the case of M/s. Chinna Ponnu Ammal Trust vs DCIT [ITA No.414/Chny/2021] held as under: (Refer Pg no. 352-355 of paper book for caselaw) "6. After perusal of Form No.10B as placed on record, it could be seen that the assessee has applied an amount of Rs.5,55,57,015/- for the purpose of charitable trust. However, as per Explanation-3 to Sec.11(1), the disallowance of Rs.48,69,504/- u/s 40(a)(ia) would not be considered as application of income. Thus, the amount which has been applied for charitable purposes would be differential of two i.e., Rs.5,06,87,511/-. The assessee has earned income of Rs.5,17,39,216 out of which an amount of Rs.5,06,87,511/- (as computed above) has been applied for charitable purpose. The balance i.e., Rs.10,51,705/- would be the income of the assessee since as per Form No.10B, the assessee has not set-apart any amount for application is subsequent years. This income is the same which has been computed by the assessee in its computation of income and paid taxes thereon. Therefore, correctly applying the 20 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO provisions of law, the assessee's income is to be computed as Rs.10,51,705/-. Merely because there is mistake in filing the corresponding columns in the return of income, the same would not result into enhancement of the assessee's income. Therefore, we direct CPC to rectify the intimation and compute the income as Rs.10,51,705/- as offered by the assessee to tax. We order so."

That in the case in hand also the appellant has filed the wrong information in the returns, therefore, the income of the appellant is enhanced, which is otherwise not taxable, hence in the present case also ratification should be made.

3.7.That the Hon'ble Rajkot ITAT in the case of ACIT vs Rupam Impex [[2016] 66 taxmann.com 181 (Rajkot - Trib.)] has held as under (Refer Pg no. 356-360 of the paper books for caselaw) "A lot of emphases is placed on the fact that the mistake was committed by the assessee himself which has resulted in the error creeping in the assessment order as well. Instead of being apologetic about the complete non-application of mind to the facts and making a mockery of the scrutiny assessment proceeding itself, the Assessing Officer has justified the mistake on record on the ground that it is attributed to the assessee. The income tax proceedings are not adversarial proceedings. As to who is responsible for the mistake is not material for the purpose of proceedings under section 154; what is material is that there is a mistake- a mistake which is clear, glaring and which is incapable of two views being taken.The fact that mistake has occurred is beyond doubt. The fact that it is attributed to the error of the assessee does not obliterate the fact of mistake or legal remedies for a mistake having crept in. It is only elementary that the income liable to be taxed has to be worked out in accordance with the law as in force. In this process, it is not open to the Revenue authorities to take advantage of mistakes committed by the assessee. Tax cannot be levied on an assessee at a higher amount or at a higher rate merely because the assessee, under a mistaken belief or due to an error, offered the income for taxation at that amount or that rate. It can only be levied when it is authorised by the law, as is the mandate of Art. 265 of the Constitution of India. A sense of fair play by the field officers towards the taxpayers is not an act of benevolence by the field officers but it is call of duty in a socially accountable governance. [Para 9]"

That as per the above-mentioned view at the time of passing the adverse rectification order under section 154 of the Act, the Ld AO. had overlooked the underlying principles that the income tax proceedings are not adversarial proceedings and that for the purpose of section 154, it is immaterial as to who is responsible for the mistake. The fact that the mistake is attributed to the appellant does not obliterate the fact of the mistake or legal remedies for resolving such a mistake. Additionally, in this process, it is not open to the Revenue authorities to take advantage of mistakes committed by the assessee.

IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO 3.8.That the Hon'ble Delhi High Court in case of Vijay Gupta vs CIT [WP(C) 1572/2013] held as under: (Refer Pg no. 361-373 of paper book for caselaw) "38. In the present case, as per the Petitioner, in his return of income, he has erroneously offered to tax gains arising on sale of shares as short-term capital gains instead of same being long term capital gains exempt from tax. Subsequently, the petitioner on 14.01.2011 filed the application under section 154 of the Act. The assessing officer on 21.02.2011 partly rectified the intimation and computed the tax on capital gains @ 10% as against 30% computed in the intimation issued under section 143(1) of the Act. The assessing officer, however refused to accept the application under section 154 filed by the petitioner. When the assessing officer could rectify the intimation on 21.02.2011, he could also consider the prayer of the petitioner made in the rectification application under section 154 of the Act, which was already pending before him on that date."

"39. When the commissioner was called upon to examine the revision application under section 264 of the Act, all the relevant material was already available on the record of the assessing officer. The commissioner instead of merely examining whether the intimation was correct based on the material then available should have examined the material in the light of the Circular No. 14(XL-35) of 1955, dated 11.4.1955 and Article 265 of the Constitution of India. The commissioner has erred in not doing so and in failing to exercise the jurisdiction vested in him on mere technical grounds.

40. In view of the above, the impugned order dated 20.11.2012 is set aside. The revision application under section 264 of the Act is restored to the file of the Commissioner. The commissioner is directed to consider the same afresh on merits and dispose the same within a period of eight weeks from today. The Writ petition is disposed of, leaving the parties to bear their own costs."

That in the present case also the assessing officer have taken the decision without examinations of the facts and ignoring article 265 of the constitution of India which say that 265. No tax shall be levied or collected except by authority of law.

Ground No. 4 is reproduced herein under as follow

4.That on the facts and in the circumstances of the case and in law, the Ld. CIT (A) and Ld. AO has erred in not considering the fact that the Intimation under section 143(1) has been received by the appellant on 25 November 2020 i.e., after the lapse of the last date of the filling revised return i.e., (31st March 2020), thereby, making it impossible to revise the return of income and left with the available option of filling an application under section 154 of the Act.

Submissions 22 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO 4.1.That it is humbly submitted before the Hon'ble Tribunal that the last date for filling of revised return was 31st March 2020, and the intimation under section 143(1) has been received to the assessee on 25 November 2020, thereby making it impossible for the assessee to even file a revised return.

4.2.That it is most humbly submitted before the Hon'ble Tribunal That the Hon'ble Gujrat High Court in case of S.R. Koshti vs CIT [[2005] 146 TAXMAN 335 (GUJ.)] held as under: (Refer Pg no. 374-382 of paper book for caselaw) "18. The position is, therefore, that, regardless of whether the revised return was filed or not, once an assessee is in a position to show that the assessee has been over- assessed under the provisions of the Act, regardless of whether the over-assessment is as a result of assessee's own mistake or otherwise, the CIT has the power to correct such an assessment under section 264(1) of the Act. If the CIT refuses to give relief to the assessee, in such circumstances, he would be acting de hors the powers under the Act and the provisions of the Act and, therefore is duty-bound to give relief to an assessee, where due, in accordance with the provisions of the Act."

That irrespective of the fact that who has made the mistake once the assessee is in a position to show that the assessee is over-assessed as in the present case the Ld. CIT and Ld. AO are duty bound to correct the mistake, despite the fact that revised return is filed or not.

4.3.That further the Hon'ble Kolkata High Court in case of Madhabi Nag vs ACIT [ITA No.512/Kol/2015] held as under: (Refer Pg no. 383-385 of paper book for caselaw) "I have heard the rival submissions. The CBDT Circular No.14 of 1955 dated 11.04.1955 has taken a view that the officers of the department must not take advantage of ignorance of the assessee about his rights and it is their duty to assist the tax payer in every reasonable way particularly in the matter of claiming and securing reliefs. In my view therefore the revenue authorities ought not to have rejected the application u/s 154 of the Act on the ground that the assessee has not filed the revised return of income. The CIT(A) has placed reliance on the decision of the Hon'ble supreme Court in the case of Goetz (India) Ltd. (supra) for sustaining the order of the AO u/s 154 of the Act. The Hon'ble Supreme Court in it's decision rendered in the case of Goetze (India) Ltd vs CIT has clarified that the appellate authorities under the Act have the power to consider the claim even if the business of the revised return of income. In my view, therefore, the claim of the assessee that Long Term Capital Gain is exempt u/s 10(38) of the Act has to be examined by the AO. It is seen from the order of AO u/s 154 of the Act that the AO wanted details of acquisition and proof of payment of STT. I therefore set aside the order of CIT(A) and remand the question of exemption of Long Term Capital Gain u/s 10(38) of the Act to the AO for fresh consideration. The 23 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO assessee is directed to file necessary evidences before the AO to substantiate his claim."

That in the present case also the hon'ble high court held that the department must not take advantage of the ignorance of the assessee, and even the application under section 154 of the act cannot be rejected on the basis that the assessee failed to file the revised return. (even otherwise the relief to the assessee/appellant cannot be denied merely having the fact that the revised return is not filed.

Ground No. 5 is reproduced herein under as follow

Submissions 5.1.That it is humbly submitted before the Hon'ble Tribunal That the revenue rejects the claim of FTC of the assessee as the assessee was the non-resident but on the other hand the revenue held the income of the assessee taxable in India, despite the fact that the whole income accrued, arise, and received outside India, and the assessee is a non-resident for the tax purpose in India.

5.2.That the Hon'ble High Court of Bombay in the case of CIT v Avtar Singh Wadhwan (2001) 247 ITR 260 (Bombay HC) held that the services rendered outside India are not taxable in India in case of non-resident. The relevant extract of the said judgment is as under (Refer to Pg no. 386-389 of the paper book for caselaw) "We find merit in the contentions advanced on behalf of the assessee. Section 5(1) of the Income-tax Act, deals with the scope of total income. It states, inter alia, that subject to the provisions of the Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which is received or is deemed to be received in India or which accrues to him in India or which accrues to him outside India during such year. In other words, the total income of a resident Indian shall, inter alia, include even income which accrues to him outside India. On the other hand, Section 5(2) indicates the meaning of accrual of income. It states, inter alia, that the total income of any previous year of a non-resident shall include all income from whatever source derived which is received by him in India or which accrues to him in India. In other words, broadly, in the case of a resident Indian all income which accrue to him whether in or outside India is taxable whereas in the case of a non-resident only 24 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO income which accrues to him in India or which is received by him in India is taxable. Therefore, consequently, in the case of a non-resident if income accrues outside India, the same is not taxable. Section 6 indicates the meaning of residence in India.

5.3.That in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 1979 taxmann.com 210 (SC) (Refer Pg no. 390-418 of the paper book for caselaw) "it would avail of the concessional rates of sales tax granted under the letter dated 20th January, 1970. It is possible that the appellant might have thought that since no notification exempting the appellant from sales tax had been issued by the State Government under Section 4-A, the appellant was legally not entitled to exemption and that is why the appellant might have chosen to accept whatever concession was being granted by the State Government. The claim of the appellant to exemption could be sustained only on the doctrine of promissory estoppel and this doctrine could not be said to be so well defined in its scope and ambit and so free from uncertainty in its application that we should be compelled to hold that the appellant must have had knowledge of its right to exemption on the basis of promissory estoppel at the time when it addressed the letter dated 25th June 1970. ln fact, in the petition as originally filed, the right to claim total exemption from sales tax was not based on the plea of promissory estoppel which was introduced only by way of amendments. Moreover, it must be remembered that there is no presumption that every person knows the law. It is often said that everyone is presumed to know the law, but that is not a correct statement: there is no such maxim known to the law. Over a hundred and thirty years ago, Maule, J., pointed out in Martindale v. Falkner, (1846) 2 CB 706: "There is no presumption in this country that every person knows the law: it would be contrary to common sense and reason if it were so". Scrutton, LJ„ also once said : "It is impossible to know all the statutory law, and not very possible to know all the common law". But it was Lord Atkin who, as in so many other spheres, put the point in its proper context when he said in Evans v. Bartlam, 1937 AC 473"...the fact is that there is not and never has been a presumption that everyone knows the law. There is the rule that ignorance of the law does not excuse a maxim of very different scope and application." It is, therefore, not possible to presume, in the absence of any material placed before the Court, that the appellant had full knowledge of its right to exemption so as to warrant an inference that the appellant waived such right by addressing the letter dated 25th June, 1970. We accordingly reject the plea of waiver raised on behalf of the State Government."

That Hon'ble court in the present case held that it is not possible to presume, in the absence of any material placed before the Court, that the appellant had full knowledge of its right to exemption, as in the present case also there is a no presumption as regard to the assessee to hold that the assessee has full knowledge of the exemptions 25 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO and after that, he has filed the return hence in the case in hand also the relief should be granted to the assessee.

5.4.That it is further humbly submitted that the Hon'ble ITAT Pune bench also affirmed that the authorities should assist the assessee and claim only legitimate taxes Income- tax Officer, Ward 1 (3), Jalna v.MSEB Employees Co-op. Credit Society Ltd. [2014] 50 taxmann.com 210 (Pune - Trib.) (Refer Pg no. 419-423 of the paper book for caselaw) "4.1 In view of above discussion, the CIT(A) was justified in holding that the assessee is entitled for deduction u/s 80P(2)(a)(i) of the Act though the same has not been claimed by the assessee in return of income. It is settled law that correct income of the assessee is to be assessed as per provisions of Income Tax Act, 1961 in spite of higher income incorrectly declared by the assessee in the return of income. This view was fortified by the decision of Hon'ble Bombay High Court in the case of CIT v. Smt. Archana R. Dhanwatey [1981] 136 ITR 355/[1981] 7 Taxman 121, wherein it was held that "under the I.T. Act, 1961, the authorities are obliged to act in accordance with law. Tax has to be collected as per the provision of the Act. If an assessee, under a mistake, misconceptions or on being not properly instructed is over assessed, the concerned authority under the Act is obliged, required to assist such an assessee by ensuring that only legitimate taxes are determined as collectible. If particular levy is PAMPA not permissible under the Act, the tax cannot be collected. In view of above, the CIT(A) was justified in holding that the assessee is eligible for deduction u/s.80P(2)(a)(i) of the Act and the assessee society is eligible for deduction u/s.80P(2)(a)(i) of the Act on merit as well, as discussed above. This reasoned finding of CIT(A) needs no interference from our side. We uphold the same."

That in the case in hand also the authorities should help the assessee and collect the taxes which is legitimate.

5.5.That the same proposition has been affirmed in the case of Assam Company (India) Ltd. vs Commissioner Of Income-Tax 2002 256 ITR 423 Gauhati (Refer Pg no. 425-437 of the paper book for caselaw) "We consider it to be a solemn duty of the taxing authorities to correctly assess the tax liability of an assessee by duly following the relevant provision of law and therefore do not countenance an inflexible and mechanical adherence to the law of procedure and in the process deny an assessee a benefit to which it is otherwise entitled in law. In our considered opinion, that could not have been the purpose of framing the Appellate Tribunal Rules. There cannot be any estoppel against law. In this regard, we are reinforced by the observations of the apex court in Sangram Singh v. Election Tribunal, AIR 1955 SC 425, with reference to the Code of Civil Procedure as under (page 429) :

"Now a code of procedure must be regarded as such. It is 'procedure', something designed to facilitate justice and further its ends : not a penal enactment for punishment 26 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO and penalties ; not a thing designed to trip people up. Too technical a construction of sections that leaves no room for reasonable elasticity of interpretation should therefore be guarded against (provided always that justice is done to 'both' sides) lest the very means designed for the furtherance of justice be used to frustrate it."

Prayer In light of the above submission advance, authorities and law cited in the interest of justice, equity and good consciences this hon'ble tribunal may please to a. Set aside the Order of the Ld. CIT (A) passed under section 154 r.w.s 143(1) of the Income-tax act and raised a demand of Rs. 10,69,841 /-.

b. Pass any other Order in the interest of justice, this Hon'ble Tribunal Think fit."

8. In addition to the above written submission the ld. AR of the assessee vehemently argued before us that when the revenue has not disputed the fact that the assessee is a non resident, employed in kenya how the salary income that has been earned and received outside in India is chargeable to tax and the same is not under the authority of the law of the Income tax and thus, the income that has been charged to tax is illegal and the assessee should be given the relief in accordance with the law about the income that has not been subjected to tax in India.

9. Per contra, the ld. DR supported the order of the lower authorities.

The ld. DR further stated that there is no mistake apparent on record and the assessee has not disputed adjustment made u/s 143(1) of the Act and therefore, the appeal of the assessee has been rightly dismissed while 27 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO passing the order u/s 154 of the Act. The ld. AO has not examined the merits of the case but has dealt with the applicability of only provisions u/s 154 of the Act in the present case. He has not decided the issue of chargeability of salary and therefore, the merits of the case have not been discussed by both the lower authorities while passing the order in this case.

It is not disputed that the assessee is a non resident Indian as it is evident from the ITR filed by him and it is also not disputed that the income declared by the assessee is salary income.

10. We have heard the rival contentions and perused the material placed on record. The Bench noted that the assessee is a non-resident Indian earning income as salary from Keniya. The assessee has in pursuance of e-mail responded and filed ITR wherein he has inadvertently shown the income of salary earned out of India while filling the ITR. Both the parties have not disputed before us that the assessee is a non-resident Indian and earning income from salary sourced and earned from Keniya. As it is also not disputed that the assessee on bona fide belief wrongly shown on salary income which was charged to tax inadvertently for which he has requested the ld. AO to rectify order as per provisions of section 154 of the Act. The ld.

AO dismissed the rectification application filed by the assessee on ground 28 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO that the assessee has not disputed that the adjustment made u/s 143(1) of the Act. The Bench noted it would be two technical for non-resident Indian to go into the intricacy of Indian income tax once the assessee has fairly moved an application u/s 154 of the Act. The ld. AO should have guided the non-resident and have passed the order on merits. The Bench has also noted that ld. CIT(A) has dismissed the appeal of the assessee only on the reason that the scope of section 154 of the Act is very limited and have not entertained the appeal of the assessee on merits considering the oral all fact and peculiarity of the case. Considering the specific facts on record that the assessee is non resident the amount which the ld. AO has taxed is earned and sourced outside India does not confer the income tax on the said income which does not accrue or arise in India and levy of income tax on such income is does not arise. Be that it may so, it is the duty of the ld.

AO to guide the assessee who are complying voluntarily based on the email addressed to him and it should not be intention the ld. AO to tax the income which is not chargeable to tax in India. Since, we have considered the arguments of the ld. DR that the issue on merits that whether the income shown on head salary is in fact received outside India is not decided under the order in dispute before us i.e. u/s 154 of the Act. Considering these set of facts we direct the ld. AO to call for the details of the salary from the 29 IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO assessee and determined the fact as to whether considering the facts and circumstances of the case and salary income is chargeable to tax into or not. At the same time assessee is directed to place all the relevant material to decide about the taxability or otherwise of the income that he has earned.

In terms of these observations, the appeal of the assessee is allowed for statistical purpose.

11. The fact of the case in IT(IT) A No. 03-JP-2023 is similar to the case in IT(IT) A No. 02-JP-2022 and we have heard both the parties and persuaded the materials available on record. The bench has noticed that the issues raised by the assessee in this appeal No. 03/JP/2022 is equally similar on set of facts and grounds. Therefore, it is not imperative to repeat the facts and various grounds raised by both the parties. Hence, the bench feels that the decision taken by us in IT(IT)A No. 02/JPR/2022 for the Assessment Year 2018-19 shall apply mutatis mutandis in the case of Pappu Singh Rajpurohit in IT(IT) A No. 03-JP-2023 for the Assessment Year 2019-20.

In the result, both appeals of the assessee are allowed for statistical purpose.

IT(IT) A Nos. 02 & 03/JP/2023 Pappu Singh Rajpurohit vs. AO Order pronounced in the open court on 17/04/2023.

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        (Sandeep Gosain)                                    (Rathod Kamlesh Jayantbhai)
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Tk;iqj@Jaipur
fnukad@Dated:- 17/04/2023
*Ganesh Kumar

vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:

1. The Appellant- Pappu Singh Rajpurohit, Kenya

2. izR;FkhZ@ The Respondent- AO (Circle Intl Tax Jaipur), Jaipur

3. vk;dj vk;qDr@ The ld CIT

4. vk;dj vk;qDr¼vihy½@The ld CIT(A)

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (IT(IT)A Nos. 2 & 3/JP/2023) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar

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Income Tax Appellate Tribunal - Jaipur

Pappu Singh Rajpurohit, Nairobi Kenya vs Ao (Intl Tax) Jaipur, Jaipur on 17 April, 2023