INCOME TAX ACT, 1961

Section 263 Section 5(2) Section 192

Revision under section 263 - Jurisdiction of CIT - AO followed permissible view in law - Jurisdictional facts being absent

Assessee's were employees of IBM India Pvt. Ltd. 'IBM' who had been sent to Switzerland on company's foreign assignment. The undisputed facts were that the residential status of all the assessee's for the relevant year was 'non-resident' in terms of section 6 and that they actually rendered services outside India during the period under consideration. The employer, viz., IBM deducted tax at source under section 192 on the entire gross salary earned by the assessee. In the assessments completed under section 143(3), the AO accepted the assessee's claim for exclusion of such foreign assignment allowance from the ambit of total income. This action of the AO had been interfered with by the CIT under section 263 on the ground that AO's action was erroneous as well as prejudicial to the Revenue. The legal issue raised by all the assessee's in the present appeals, was against the action of the CIT to usurp the revisional jurisdiction under section 263.Held: Not only did the AO enquire into the issue of taxability of foreign assignment allowance received by the assessee but had consciously applied his mind to the facts made available before him and adopted the permissible view in law. For these reasons, the assessment order was not the result of non-enquiry or non-application of mind or assumption of wrong facts. While passing the assessment order the AO had followed the permissible view in law which could not be said to be 'unsustainable in law'. The jurisdictional facts for usurping the jurisdiction under section 263, being absent, the action of CIT was therefore, without jurisdiction and all subsequent actions were, therefore, 'null' in the eyes of law. The order impugned before this Tribunal was thus, quashed.

Followed:Bodhisattva Chattopadhyay & Ors. v. CIT (IT & TP) [ITA. No. 1314/Kol/2019 & Ors. for assessment year 2014-15] : 2019 TaxPub(DT) 7627 (Kol-Trib) and Dy. CIT v. Sandip Maity & Ors. ITA. No. 1128, 416 to 425/Kol/2017.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15

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