Commissioner Of Income Tax – Tds, Chennai v. Icl Shipping Ltd., 827, Anna Salai, Chennai-600 002

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 08.06.2009 C O R A M: THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLAandTHE HONOURABLE MR.JUSTICE B.RAJENDRAN TAX CASE (APPEAL) No.251 of 2009 Commissioner of Income Tax – TDS,Chennai. .. Appellant vs. ICL Shipping Ltd.,827, Anna Salai,Chennai-600 002... Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act,1961 against the order of the Income Tax Appellate Tribunal, Madras'A' Bench, Chennai, dated 15.12.2008 passed in ITA No.2207/Mds/06relating to the assessment year 2001-2002. against the Ordser dated25.8.2006 on the file of Commissioner of Income Tax(A) in AppealNo.C.I.T.(A)X/C/113/5-06 against the Order dated 21.3.2005 on thefile of Assistant Commissioner of Income Tax TDS Circle I, Chennai-34in PAN:AAAC 12703 H For appellant :Mrs.Pushya SitaramanStanding Counsel for Income Tax. J U D G M E N T (Judgment of the Court was delivered by F.M.IBRAHIM KALIFULLA, J.) The revenue has come forward with this appeal challenging theorder of the Income Tax Appellate Tribunal, Chennai in ITANo.2207/Mds/06, dated 15.12.2008. 2. The question of law posed for consideration is as to whetherthe conclusion of the Tribunal in holding that the Indian shippingcompany need not deduct tax at source with respect to its crew forthe days on which the ship was outside the territorial waters of https://hcservices.ecourts.gov.in/hcservices/ India and the number of such days exceeds 182 in any particular year. 3. We heard Mrs.Pushya Sitaraman, learned standing counselappearing for the appellant and perused the relevant provisions viz.,Sections 2(30), 2(42) and 6 of the Income Tax Act, 1961 as well astaken note of the indisputable fact that the crews were on dutyoutside the territorial waters of India in the ship of a company ofIndian origin for more than 182 days. 4. On a reading of Sections 2(30), 2(42) and 6 together, for aperson to claim the status of a 'non-resident' has only to satisfythat though such person as a crew works for an Indian shippingcompany rendered such service for the said company in the shipoutside the territorial waters of India for a period exceeding 182days. For that purpose it would be relevant to extract Sections 2(30), 2(42) and Explanation to Section 6, which reads as under: "Section 2(30) : "non-resident" means a person whois not a "resident" and for the purposes of sections92,93 and 168, includes a person who is not ordinarilyresident within the meaning of clause (6) of section 6;Section 2(42) "resident" means a person who isresident in India within the meaning of section 6;Section 6: For the purposes of this Act,- (1) An individual is said to be resident in Indiain any previous year, if he-- (a) is in India in that year for a period orperiods amounting in all to one hundred and eighty-twodays or more; or (b) *** (c) having within the four years preceding thatyear been in India for a period or periods amounting inall to three hundred and sixty five days or more, is inIndia for a period or periods amounting in all to sixtydays or more in that year.Explanation-- In the case of an individual,- (a) being a citizen of India, who leaves India inany previous year as a member of the crew of an Indianship as defined in clause (18) of Section 3 of theMerchant Shipping Act, 1958 (44 of 1958), or for thepurposes of employment outside India, the provisions of https://hcservices.ecourts.gov.in/hcservices/ sub-clause (c) shall apply in relation to that year asif for the words "sixty days", occurring therein, thewords "one hundred and eighty-two days" had beensubstituted." (b) *** (c) having within the four years preceding thatyear been in India for a period or periods amounting inall to three hundred and sixty five days or more, is inIndia for a period or periods amounting in all to sixtydays or more in that year.Explanation-- In the case of an individual,- (a) being a citizen of India, who leaves India inany previous year as a member of the crew of an Indianship as defined in clause (18) of Section 3 of theMerchant Shipping Act, 1958 (44 of 1958), or for thepurposes of employment outside India, the provisions of https://hcservices.ecourts.gov.in/hcservices/ sub-clause (c) shall apply in relation to that year asif for the words "sixty days", occurring therein, thewords "one hundred and eighty-two days" had beensubstituted." 5. Having regard to the said specific statutory provisionsproviding for the benefit of grant of exemption for a non-resident, we are convinced that in the case on hand having regard tothe fact that the crews with reference to whom the exemption wasavailed and who offered their services outside the territorial watersfor an Indian shipping company, the period of which exceeded 182days, there was no scope to find fault with the action of the Indianshipping company in not having deducted any tax at source in respectof the salary paid to such crew for the relevant period. 6. We therefore do not find any question of law much lesssubstantial question of law in order to entertain this appeal andthe same is dismissed. Sd/Asst.Registrar/true copy/Sub Asst.RegistrarkkTo1. The Commissioner of Income Tax, Chennai. 2. The Income Tax Appellate Tribunal, Chennai 'A' Bench, Chennai. 3.The Assistant Commissioner of Income Tax(TDS) Cricle I, Chennai-34. TAX CASE (APPEAL) No.251 of 2009 ka(co)pmk.17.6.2009.