Not Ordinarily Resident test: aggregate presence over two years in the preceding seven years determines family residence status.

The text explains that clause (a) applies an aggregate presence test: an individual is 'not ordinarily resident' only if he has not been present in British India for an aggregate period of more than two years during the seven years preceding the previous year; presence exceeding that threshold defeats 'not ordinarily resident' status. Clause (b) attributes the manager's (karta's) residence status to the Hindu undivided family, so the family follows the karta's position. Applying these principles, where the karta was present in British India for over two years in the relevant seven year period, the family was not 'not ordinarily resident'.

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Issues: Whether, for the assessment year 1940-41, the Hindu undivided family was "not ordinarily resident" within the meaning of Section 4B(a) of the Indian Income-tax Act, having regard to the manager's periods of presence in British India during the seven years preceding the previous year.

Analysis: The Court examined clause (a) of Section 4B which, for an individual, explains when he is "not ordinarily resident". The decisive part provides that an individual is "not ordinarily resident" if he has not, during the seven years preceding the year, been in British India for an aggregate period of more than two years. The Court interpreted this as a test of presence in British India (an aggregate period of presence exceeding two years during the preceding seven years excludes an individual from the category of "not ordinarily resident"). Where the karta has been resident in nine out of the ten preceding years and has been present in British India for an aggregate period of more than two years during the preceding seven years, he does not satisfy the requirements of Section 4B(a) to be "not ordinarily resident." By clause (b) of Section 4B the status of the manager determines the status of the Hindu undivided family; therefore the family's status follows that of the karta.

Conclusion: The issue is answered against the assessee; the Hindu undivided family was not "not ordinarily resident" for the assessment year 1940-41 (decision in favour of the Revenue).

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