On appeal, the Tribunal observed that from the material facts which have been placed before the Commissioner and also before the Assessing Officer during rectification proceedings under S. 154, post assessment proceedings, it is seen that the assessee has given entire details of number of days for which assessee had stayed outside India which has been computed at 203 days.

The order can be held to be erroneous in the absence of any proper enquiry at the stage of assessment proceeding, though examined subsequently by the Assessing Officer which is also part of assessment record, but certainly one has to see that, whether it is prejudicial to the interest of the Revenue or not. The assessee in terms of section 6 clearly cannot be held to be resident in India in the relevant previous year. So far as the observation that since the salary income has been received in India, i.e., it has been credited in the bank account of the assessee in India and also TDS has been deducted by the employer, this fact cannot be determinative of the taxability of resident or non-resident in terms of provisions of the Act.

Salary of the assessee cannot be taxed in India and the same has rightly been claimed as deduction in the return of income. Thus, on merits the assessment order passed by the Assessing Officer is not prejudicial to the interest of the revenue, albeitcan be reckoned as erroneous in the absence of any proper enquiry and thus, relying of the decision of Supreme Court in case of Malabar Industrial Co. Ltd  v. CIT (2000)243 ITR 83 (SC), Tribunal held that even if one of the limbs of said expression used in S. 263 is missing, then ostensibly the assessment order cannot be set aside within the scope of revision u/s 263 and uphold the allowability of deduction of salary as claimed by the assessee. (AY. 2011-12)