A Karnataka resident moved to South Korea to work for a company that secured a major project from Samsung Heavy Industries in South Korea. According to reports from The Times of India, the employment arrangement required him to work at Samsung's shipyard from September 2014 to June 30, 2016, where his responsibility was to supervise vessel construction. His salary was fixed in US dollars and transferred directly to his Non-Resident External (NRE) account in India, as specified in his employment contract that designated him as a supervisor and electrician. As per the latest reports, Mr Akka, a resident of Humnabad Road in Gandhi Nagar, Karnataka, emigrated to South Korea to work for Greece-based Ocean Rig UDW Inc, which had secured the big project from Samsung Heavy Industries in South Korea.
The Income Tax Assessing Officer in Bangalore issued a tax notice after concluding that the man was employed by a foreign company and had not filed foreign tax returns or submitted a Tax Residency Certificate (TRC). As reported by The Times of India, the officer included his salary income in total taxable income and added interest income differences, making him liable for income tax on the salary credited to his NRE account. The latest reports confirm that the AO observed that Akka had received credits into his NRE account in USD, therefore concluding that Akka is working with a foreign company. The AO further stated that despite his employment with a foreign company, Akka has not filed the Foreign Tax Returns and has also not furnished the copy of the TRC, while noting that Akka had not declared his received salary income in his Indian income tax return (ITR).
On September 23, 2026, the Income Tax Appellate Tribunal Bangalore ruled in favor of the taxpayer, granting relief based on supporting evidence. According to The Times of India, ITAT Bangalore noted that the man's bank statements supported his account of transactions and his passport entries established non-resident status during the relevant period. The latest reports confirm that ITAT Bangalore held that the income tax department had applied the wrong test as the entire basis for taxing the salary on the premise that Akka hadn't produced the documents mentioned above including TRC. The tribunal held that Akka had already proven the facts that actually matter for Indian taxability as his passport entries and NRE bank statements established he was a non-resident during the year, and the documentary evidence showed he was employed by a Greece-based company, working in South Korea, and salary was paid in USD in his NRE account.
Karanjot Singh Khurana, Partner at DMD Advocates, explained to The Times of India that for assessment year 2016-17, the taxpayer filed his income tax return as a non-resident. The tribunal directed the Assessing Officer to examine the man's passport entries and NRE account records for fresh consideration, without insisting on TRC, foreign tax returns, or proof of taxes paid abroad. The latest reports confirm that ITAT Bangalore ruled that payment of tax abroad is not the test for whether income is taxable in India, and that the NRE account establishes the fact that the assessee had received the salary in USD. The ITAT Bangalore also observed that despite the fact that Akka had produced the copy of the passport and the copy of the bank statements, the AO had not considered the same for the only reason that the documents such as tax returns, TRC, and tax paid details in the foreign country were not produced by Akka.
