My client remitted his overseas salary into NRE accounts, later had them redesignated as NRNR deposits, and described himself as 'Resident' in his return by mistake while claiming section 115H. The assessing officer says he is a resident, that no valid section 115H declaration was filed with the return, and has denied the twenty per cent rate. Is there anything in this?
Yes, on two grounds the Madras High Court accepted. First, on the facts found by the Tribunal the redesignation of the NRE accounts into NRNR accounts had been made only out of the convertible foreign exchange lying to the assessee's credit in accounts opened with the inflow of the original foreign exchange transferred to India as approved by the Reserve Bank of India, so the deposits remained foreign exchange assets. Second, the Court held that the assessee's real status cannot be denied merely because he made a wrong declaration when he satisfied all the conditions, and that being 'not ordinarily resident' he was not a 'resident' and so fell within the definition of non-resident Indian in section 115C(e) and was entitled to section 115E in its own right, with no obligation to file any declaration under section 115H.
Decided by the High Court (D. Murugesan J and P.P.S. Janarthana Raja J (common judgment delivered by D. Murugesan J), High Court of Judicature at Madras) on 2012-02-07, reported as Tax Case (A) Nos. 1053 to 1056 of 2004; appeals under section 260-A against the order dated 29 December 2003 of the Income Tax Appellate Tribunal, Chennai 'A' Bench in I.T.A. Nos. 1379/Mds/2003 to 1382/Mds/2003; assessment years 1994-95 to 1997-98. It bears on section 115C, section 115C(e), section 115E, section 115H, section 6, section 6(6), section 10(15)(iv)(fa), section 64(1)(iv), section 147, section 143(2), section 148, section 260A of the Income Tax Act 1961, in Residence & Treaty Benefit, Reassessment & Reopening, Capital Gains Exemptions and Evidence & Burden of Proof matters.
This is the decision to reach for when the officer attacks the FUNDING CHAIN rather than the original remittance. Money that comes in as convertible foreign exchange rarely stays in the account it arrived in: it is renewed, redesignated, moved between NRE, NRNR and FCNR products. The Court accepted the Tribunal's finding that the character of the funds survives the redesignation so long as the redesignated deposit is made only out of the convertible foreign exchange already lying to the assessee's credit in accounts opened with the original inflow. That is a finding of fact, so the practical lesson is evidential: the chain has to be documented account by account. The second ground is just as useful and is more widely applicable. Section 115C(e) defines a non-resident Indian as an individual, being a citizen of India or a person of Indian origin, who is not a 'resident'; the Court proceeded on the footing that a person who is 'not ordinarily resident' under section 6(6)(a) is not a 'resident' for that purpose and so remains within Chapter XII-A on his own footing — a proposition that is contestable on the text of section 6(6) read with section 2(30), and which no decision above this one was found to support — with the consequence that no section 115H declaration was needed at all, since section 115H is only for a person who has become assessable AS RESIDENT. The Court also refused to let the assessee's own mistaken description of himself as 'Resident' in the return govern, holding that the real status cannot be denied because of a wrong declaration made in ignorance of law. What the assessee did NOT win is worth noting: the Court answered the first three questions, on the validity of the reopening under section 147 and on section 143(2) time limits, IN FAVOUR OF THE REVENUE following the Supreme Court in Rajesh Jhaveri Stock Brokers, so the appeals were only partly allowed.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The assessee was employed with UNICEF and had been residing outside India since 14 February 1977. He returned to India on 6 February 1992 on superannuation, went abroad again on UNICEF duty on 5 April 1992, returned on 7 May 1992 and from that date resided in India permanently. During his employment abroad he had earned considerable sums by way of salary and remitted them to India in foreign exchange, investing mainly in bank deposits. He filed returns claiming the benefit of sections 115E and 115H, which were processed under section 143(1)(a). The Assessing Officer later reopened the assessments on the ground of escapement and denied the exemption, treating the assessee as a resident on the strength of the status shown in his own return and of a declaration made under section 115H that was furnished much later and not along with the returns. The Commissioner of Income Tax (Appeals) held the reopening valid and denied the benefit of tax at 20 per cent. The Tribunal held that the Assessing Officer was not justified in reopening, considered the merits, found on the facts that the assessee had been a non-resident for 12 years before returning and had been in India for only 323 days during the seven previous years preceding AY 1993-94, held his status to be 'Not Ordinarily Resident' under section 6(6)(a) for the relevant years and up to AY 2001-02, and found at its paragraph 28 that the redesignation of the NRE accounts into NRNR accounts had been made only out of the convertible foreign exchange lying to the assessee's credit. The Revenue appealed on five substantial questions of law covering the validity of the reopening, the section 143(2) time limit, the entitlement to the concessional rate under section 115H without satisfying the procedural and substantive requirements of Chapter XII-A, and the status finding with the consequent relief under section 115E and section 10(15)(iv)(fa) including income of the assessee's wife clubbed under section 64(1)(iv).
The tax case appeals were partly allowed. Questions 1 to 3, on the validity of the reopening and the section 143(2) time limit, were answered in favour of the Revenue and against the assessee, both counsel accepting that the issue was covered by the Supreme Court in ACIT v. Rajesh Jhaveri Stock Brokers P. Ltd. Questions 4 and 5 were answered against the Revenue and in favour of the assessee: the Tribunal had correctly applied the definition in section 115C(e), the assessee's status being 'Not Ordinarily Resident' meant he was not a resident and was a non-resident Indian, he was therefore entitled to the benefit of section 115E on the interest earned on his deposits at 20 per cent, and he had no obligation to file any declaration under section 115H or 115E. The real status of the assessee could not be denied merely because he had made a wrong declaration in his return when he satisfied all the conditions, and on the nature of the investment the Tribunal's finding stood that the subsequent redesignation of the NRE accounts into NRNR accounts had been made only out of the convertible foreign exchange lying to the assessee's credit in accounts opened with the inflow of the original foreign exchange transferred to India as approved by the Reserve Bank of India (paragraphs 6 to 9 and 11).
On the reopening questions the Court simply followed Rajesh Jhaveri Stock Brokers, both counsel accepting that the issue was covered (paragraph 6). On the substantive questions the Court set out the competing positions — the assessee's case that the returns were filed on the basis of section 115E, and the Assessing Officer's finding that they were filed under section 115H, which requires a declaration in writing along with the return that Chapter XII-A shall continue to apply in relation to investment income from a foreign exchange asset of the nature in sub-clauses (ii) to (v) of section 115C(f), the declaration here having been made much later (paragraph 7). It recorded the undisputed facts that the assessee had worked for UNICEF, had remitted his salary to India in foreign exchange and had invested mainly in bank deposits, that he had been a non-resident for 12 years and in India for only 323 days in the preceding seven years, and that the Tribunal had found his status to be 'Not Ordinarily Resident' under section 6(6)(a) (paragraph 7). It set out Chapter XII-A's purpose as encouraging the flow of foreign exchange remittances into India and investment by non-resident Indians, and reproduced section 115E (paragraph 7). Reading section 115C(e), which defines a non-resident Indian as a citizen of India or person of Indian origin who is not a 'resident', the Court held that the Tribunal had rightly concluded that the assessee was not a resident and was entitled to the benefit of section 115E, so that the Revenue's insistence on a declaration did not arise because filing one is not a condition of that benefit, and the Tribunal had correctly held that no declaration under section 115H or 115E was required until AY 2002-03 (paragraph 8). On the character of the investments the Court relied on the Tribunal's detailed finding at its paragraph 28 about the redesignation of the NRE accounts into NRNR accounts out of convertible foreign exchange, and held that the assessee must be a non-resident Indian; a declaration made in ignorance of law would not nullify that entitlement, and a wrong description in the return would not alter his status (paragraph 8). The finding being based on valid material and evidence, and the Revenue having produced nothing to justify a contrary view, the order of the Tribunal was in accordance with law (paragraph 9).
In respect of the nature of investment, the Tribunal also held in detail in paragraph 28 and has come to a conclusion that the subsequent redesignation of the NRE accounts into NRNR accounts have been made only from out of the convertible Foreign Exchange lying to the credit of the assessee in his various accounts which had been opened with the inflow of the original Foreign exchange transferred to India as approved by the Reserve Bank of India.
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Handle my notice → Ask a CA on WhatsAppYes, on two grounds the Madras High Court accepted. First, on the facts found by the Tribunal the redesignation of the NRE accounts into NRNR accounts had been made only out of the convertible foreign exchange lying to the assessee's credit in accounts opened with the inflow of the original foreign exchange transferred to India as approved by the Reserve Bank of India, so the deposits remained foreign exchange assets. Second, the Court held that the assessee's real status cannot be denied merely because he made a wrong declaration when he satisfied all the conditions, and that being 'not ordinarily resident' he was not a 'resident' and so fell within the definition of non-resident Indian in section 115C(e) and was entitled to section 115E in its own right, with no obligation to file any declaration under section 115H. This was decided by the High Court (D. Murugesan J and P.P.S. Janarthana Raja J (common judgment delivered by D. Murugesan J), High Court of Judicature at Madras) and bears on section 115C, section 115C(e), section 115E, section 115H, section 6, section 6(6), section 10(15)(iv)(fa), section 64(1)(iv), section 147, section 143(2), section 148, section 260A of the Income Tax Act 1961. It is reported as Tax Case (A) Nos. 1053 to 1056 of 2004; appeals under section 260-A against the order dated 29 December 2003 of the Income Tax Appellate Tribunal, Chennai 'A' Bench in I.T.A. Nos. 1379/Mds/2003 to 1382/Mds/2003; assessment years 1994-95 to 1997-98. This is the decision to reach for when the officer attacks the FUNDING CHAIN rather than the original remittance. Money that comes in as convertible foreign exchange rarely stays in the account it arrived in: it is renewed, redesignated, moved between NRE, NRNR and FCNR products. The Court accepted the Tribunal's finding that the character of the funds survives the redesignation so long as the redesignated deposit is made only out of the convertible foreign exchange already lying to the assessee's credit in accounts opened with the original inflow. That is a finding of fact, so the practical lesson is evidential: the chain has to be documented account by account. The second ground is just as useful and is more widely applicable. Section 115C(e) defines a non-resident Indian as an individual, being a citizen of India or a person of Indian origin, who is not a 'resident'; the Court proceeded on the footing that a person who is 'not ordinarily resident' under section 6(6)(a) is not a 'resident' for that purpose and so remains within Chapter XII-A on his own footing — a proposition that is contestable on the text of section 6(6) read with section 2(30), and which no decision above this one was found to support — with the consequence that no section 115H declaration was needed at all, since section 115H is only for a person who has become assessable AS RESIDENT. The Court also refused to let the assessee's own mistaken description of himself as 'Resident' in the return govern, holding that the real status cannot be denied because of a wrong declaration made in ignorance of law. What the assessee did NOT win is worth noting: the Court answered the first three questions, on the validity of the reopening under section 147 and on section 143(2) time limits, IN FAVOUR OF THE REVENUE following the Supreme Court in Rajesh Jhaveri Stock Brokers, so the appeals were only partly allowed. If it applies to you, the first step is this: Document the funding chain account by account: original inward remittance, the NRE account it landed in, every renewal, and the redesignation into NRNR or any other product, showing that each successor deposit was made only out of convertible foreign exchange already lying to the assessee's credit.
The assessee was employed with UNICEF and had been residing outside India since 14 February 1977. He returned to India on 6 February 1992 on superannuation, went abroad again on UNICEF duty on 5 April 1992, returned on 7 May 1992 and from that date resided in India permanently. During his employment abroad he had earned considerable sums by way of salary and remitted them to India in foreign exchange, investing mainly in bank deposits. He filed returns claiming the benefit of sections 115E and 115H, which were processed under section 143(1)(a). The Assessing Officer later reopened the assessments on the ground of escapement and denied the exemption, treating the assessee as a resident on the strength of the status shown in his own return and of a declaration made under section 115H that was furnished much later and not along with the returns. The Commissioner of Income Tax (Appeals) held the reopening valid and denied the benefit of tax at 20 per cent. The Tribunal held that the Assessing Officer was not justified in reopening, considered the merits, found on the facts that the assessee had been a non-resident for 12 years before returning and had been in India for only 323 days during the seven previous years preceding AY 1993-94, held his status to be 'Not Ordinarily Resident' under section 6(6)(a) for the relevant years and up to AY 2001-02, and found at its paragraph 28 that the redesignation of the NRE accounts into NRNR accounts had been made only out of the convertible foreign exchange lying to the assessee's credit. The Revenue appealed on five substantial questions of law covering the validity of the reopening, the section 143(2) time limit, the entitlement to the concessional rate under section 115H without satisfying the procedural and substantive requirements of Chapter XII-A, and the status finding with the consequent relief under section 115E and section 10(15)(iv)(fa) including income of the assessee's wife clubbed under section 64(1)(iv). The matter was decided on 2012-02-07 by the High Court (D. Murugesan J and P.P.S. Janarthana Raja J (common judgment delivered by D. Murugesan J), High Court of Judicature at Madras). On those facts the High Court held as follows. The tax case appeals were partly allowed. Questions 1 to 3, on the validity of the reopening and the section 143(2) time limit, were answered in favour of the Revenue and against the assessee, both counsel accepting that the issue was covered by the Supreme Court in ACIT v. Rajesh Jhaveri Stock Brokers P. Ltd. Questions 4 and 5 were answered against the Revenue and in favour of the assessee: the Tribunal had correctly applied the definition in section 115C(e), the assessee's status being 'Not Ordinarily Resident' meant he was not a resident and was a non-resident Indian, he was therefore entitled to the benefit of section 115E on the interest earned on his deposits at 20 per cent, and he had no obligation to file any declaration under section 115H or 115E. The real status of the assessee could not be denied merely because he had made a wrong declaration in his return when he satisfied all the conditions, and on the nature of the investment the Tribunal's finding stood that the subsequent redesignation of the NRE accounts into NRNR accounts had been made only out of the convertible foreign exchange lying to the assessee's credit in accounts opened with the inflow of the original foreign exchange transferred to India as approved by the Reserve Bank of India (paragraphs 6 to 9 and 11).
On the reopening questions the Court simply followed Rajesh Jhaveri Stock Brokers, both counsel accepting that the issue was covered (paragraph 6). On the substantive questions the Court set out the competing positions — the assessee's case that the returns were filed on the basis of section 115E, and the Assessing Officer's finding that they were filed under section 115H, which requires a declaration in writing along with the return that Chapter XII-A shall continue to apply in relation to investment income from a foreign exchange asset of the nature in sub-clauses (ii) to (v) of section 115C(f), the declaration here having been made much later (paragraph 7). It recorded the undisputed facts that the assessee had worked for UNICEF, had remitted his salary to India in foreign exchange and had invested mainly in bank deposits, that he had been a non-resident for 12 years and in India for only 323 days in the preceding seven years, and that the Tribunal had found his status to be 'Not Ordinarily Resident' under section 6(6)(a) (paragraph 7). It set out Chapter XII-A's purpose as encouraging the flow of foreign exchange remittances into India and investment by non-resident Indians, and reproduced section 115E (paragraph 7). Reading section 115C(e), which defines a non-resident Indian as a citizen of India or person of Indian origin who is not a 'resident', the Court held that the Tribunal had rightly concluded that the assessee was not a resident and was entitled to the benefit of section 115E, so that the Revenue's insistence on a declaration did not arise because filing one is not a condition of that benefit, and the Tribunal had correctly held that no declaration under section 115H or 115E was required until AY 2002-03 (paragraph 8). On the character of the investments the Court relied on the Tribunal's detailed finding at its paragraph 28 about the redesignation of the NRE accounts into NRNR accounts out of convertible foreign exchange, and held that the assessee must be a non-resident Indian; a declaration made in ignorance of law would not nullify that entitlement, and a wrong description in the return would not alter his status (paragraph 8). The finding being based on valid material and evidence, and the Revenue having produced nothing to justify a contrary view, the order of the Tribunal was in accordance with law (paragraph 9). In the words reproduced by the source cited on this page: "In respect of the nature of investment, the Tribunal also held in detail in paragraph 28 and has come to a conclusion that the subsequent redesignation of the NRE accounts into NRNR accounts have been made only from out of the convertible Foreign Exchange lying to the credit of the assessee in his various accounts which had been opened with the inflow of the original Foreign exchange transferred to India as approved by the Reserve Bank of India." The decision followed or applied Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers P. Ltd. (2007) 291 ITR 500 (SC) — followed, on questions 1 to 3, in favour of the Revenue.
It was decided by the High Court on 2012-02-07 and is reported as Tax Case (A) Nos. 1053 to 1056 of 2004; appeals under section 260-A against the order dated 29 December 2003 of the Income Tax Appellate Tribunal, Chennai 'A' Bench in I.T.A. Nos. 1379/Mds/2003 to 1382/Mds/2003; assessment years 1994-95 to 1997-98. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 115C, section 115C(e), section 115E, section 115H, section 6, section 6(6), section 10(15)(iv)(fa), section 64(1)(iv), section 147, section 143(2), section 148, section 260A, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The tax case appeals were partly allowed. Questions 1 to 3, on the validity of the reopening and the section 143(2) time limit, were answered in favour of the Revenue and against the assessee, both counsel accepting that the issue was covered by the Supreme Court in ACIT v. Rajesh Jhaveri Stock Brokers P. Ltd. Questions 4 and 5 were answered against the Revenue and in favour of the assessee: the Tribunal had correctly applied the definition in section 115C(e), the assessee's status being 'Not Ordinarily Resident' meant he was not a resident and was a non-resident Indian, he was therefore entitled to the benefit of section 115E on the interest earned on his deposits at 20 per cent, and he had no obligation to file any declaration under section 115H or 115E. The real status of the assessee could not be denied merely because he had made a wrong declaration in his return when he satisfied all the conditions, and on the nature of the investment the Tribunal's finding stood that the subsequent redesignation of the NRE accounts into NRNR accounts had been made only out of the convertible foreign exchange lying to the assessee's credit in accounts opened with the inflow of the original foreign exchange transferred to India as approved by the Reserve Bank of India (paragraphs 6 to 9 and 11). It arises in Residence & Treaty Benefit, Reassessment & Reopening, Capital Gains Exemptions and Evidence & Burden of Proof matters, on section 115C, section 115C(e), section 115E, section 115H, section 6, section 6(6), section 10(15)(iv)(fa), section 64(1)(iv), section 147, section 143(2), section 148, section 260A of the Income Tax Act 1961, and was decided by D. Murugesan J and P.P.S. Janarthana Raja J (common judgment delivered by D. Murugesan J), High Court of Judicature at Madras. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Establish residential status under section 6 before arguing anything else. If the client is 'not ordinarily resident', the point taken in this case is that he is therefore not a 'resident' and so is a non-resident Indian within section 115C(e), entitled to section 115E directly — but take it knowing it is contestable: section 6(6) describes a person who IS resident but not ORDINARILY resident, and section 2(30) defines 'non-resident' as a person who is not a resident, so the Revenue will say that a resident but not ordinarily resident person is still a 'resident' for section 115C(e). This judgment is the authority for the point and nothing above it was located; plead it as such and keep the section 115H declaration route open in the alternative. If that point is good, say expressly that no section 115H declaration was required — section 115H applies only to a person who has become assessable AS RESIDENT, and the officer who insists on a declaration has misread which section the claim rests on. Do not let a wrong description in the return decide the case. The Court held that the real status cannot be denied merely because the assessee made a wrong declaration when he satisfied all the conditions; put the correct status on the record with the evidence for it. Do not read this decision as authority on reopening. The Court decided the first three questions against the assessee on the strength of ACIT v. Rajesh Jhaveri Stock Brokers P. Ltd., and the appeals were partly allowed for that reason. Where the section 115H route is genuinely the one you need, file the declaration ALONG WITH the return for the first year of residence — the Court records that in this case the declaration was made much later and not along with the returns, which is why the Revenue's fourth question was framed as it was.
Still good law. Followed by the same High Court in respect of the same assessee for a later year: CIT v. Shri N. Sundararaman, Tax Case (Appeal) No. 101 of 2008, decided 17 February 2015 by R. Sudhakar and R. Karuppiah JJ for AY 1998-99, read in full this pass at indiankanoon.org/doc/159985668/. There, both counsel fairly submitted that the first substantial question of law — entitlement to the concessional rate under section 115H where the procedural and substantive requirements of Chapter XII-A were said not to be satisfied — had already been decided by the same Court in favour of the assessee in T.C.(A) Nos. 1053 to 1056 of 2004 dated 7 February 2012, and following that decision the Revenue's appeal was dismissed. Caveat on that corroboration: the fetch of the 2015 judgment returned paragraphs 1 to 11 verbatim except paragraph 10, where the reproduction of the 2012 judgment came back as a bracketed editorial placeholder rather than as text, so paragraph 10 of the 2015 judgment has not been read. No decision doubting or dissenting from the 2012 judgment was located, but no systematic later-treatment search was run beyond the indiankanoon queries recorded in NOTES-B84.md, and no Supreme Court consideration was found. Note separately that section 115E as reproduced in this judgment charges long-term capital gains at a flat ten per cent; that rate is superseded by amendment for transfers on or after 23 July 2024, though nothing in the decision turned on it, the income in issue being deposit interest. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The common judgment was read in full from the plain document URL https://indiankanoon.org/doc/135741652/ and the sentence relied on for the NRE/NRNR point was re-fetched independently through https://indiankanoon.org/docfragment/135741652/?formInput=%22redesignation%20of%20the%20NRE%20accounts%20into%20NRNR%20accounts%20have%20been%20made%20only%20from%20out%22, which returned it in the same words. PARAGRAPH STRUCTURE, established by transcribing the whole judgment and not by asking about it: after the cause title the judgment opens with an UNNUMBERED paragraph setting out five substantial questions of law, and then runs 2, 3, 4, 5, 6, 7, 8, 9 and then 11. THE NUMBERING JUMPS FROM 9 TO 11 — there is no paragraph 10 in this judgment — and paragraph 11 is the disposal, 'In the result, the tax case appeals are partly allowed. No costs.' A citation to 'paragraph 10' of this judgment would be a fabricated locator. Paragraph 7 reproduces section 115E in its post-1998 pre-2024 form, with a flat ten per cent for long-term capital gains; that rate is superseded for transfers on or after 23 July 2024 and the section as reproduced there must not be read as current text. The reference in paragraph 8 to 'paragraph 28' is to the TRIBUNAL's order, not to this judgment. The judgment records at paragraph 7 that the Assessing Officer had found the returns were filed under section 115H and that the declaration was made much later and not along with the returns; the Court did not decide whether a late declaration can ever be accepted for section 115H purposes — it decided the case on the footing that no declaration was needed because section 115E applied directly. Some sentences in the source are ungrammatical as printed ('The real status of the assessee cannot be denied merely the assessee made a wrong declaration when he satisfied all the conditions.'); I have reproduced meaning rather than quoting those sentences, and the key_quote is taken from a sentence verified verbatim on two routes. The Court's statement in paragraph 7 that Chapter XII-A 'was inserted by the Finance Act, 1983 with effect from 1 June 1983' matches the departmental footnote read this pass on incometaxindia.gov.in/w/section-115c-31 (footnote 41) and /w/section-115c-25 (footnote 21). A verification pass re-transcribed the whole judgment from the plain document URL and confirms the paragraph sequence recorded above — an unnumbered opening paragraph carrying the five questions, then 2, 3, 4, 5, 6, 7, 8, 9 and 11, with no paragraph 10 — and matched the key_quote word for word against that independent transcription. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The tax case appeals were partly allowed. Questions 1 to 3, on the validity of the reopening and the section 143(2) time limit, were answered in favour of the Revenue and against the assessee, both counsel accepting that the issue was covered by the Supreme Court in ACIT v. Rajesh Jhaveri Stock Brokers P. Ltd. Questions 4 and 5 were answered against the Revenue and in favour of the assessee: the Tribunal had correctly applied the definition in section 115C(e), the assessee's status being 'Not Ordinarily Resident' meant he was not a resident and was a non-resident Indian, he was therefore entitled to the benefit of section 115E on the interest earned on his deposits at 20 per cent, and he had no obligation to file any declaration under section 115H or 115E. The real status of the assessee could not be denied merely because he had made a wrong declaration in his return when he satisfied all the conditions, and on the nature of the investment the Tribunal's finding stood that the subsequent redesignation of the NRE accounts into NRNR accounts had been made only out of the convertible foreign exchange lying to the assessee's credit in accounts opened with the inflow of the original foreign exchange transferred to India as approved by the Reserve Bank of India (paragraphs 6 to 9 and 11).
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Is a notice under s.143(2) a jurisdictional precondition, or merely a procedural step the Assessing Officer can skip?
My return was only processed under 143(1). Does that stop the department reopening it later?
How much am I actually required to disclose — and can they reopen because the officer drew the wrong conclusion?
The sanctioning authority just wrote 'yes' and signed. Is that a sanction?