Query on Section 6 of IT Act - In view of Binny Bansal ITAT Bangalore Judgement

[Pankaj Singh]

Good afternoon,

My understanding has been that residential status under Section 6 of IT Act is to be determined independently for each FY, based only on the number of days of stay in that year & read with relaxation given in explanations which gives benefit of relaxed to 182 days to Citizen of India, or Person of Indian Origin who visits to India, without reference to residential status in earlier years.

However, in the Binny Bansal ITAT Bangalore held that while determining residential status, it is necessary to examine whether the person was a non-resident in preceding years, if yes, then only the benefit of relaxed 182 days from 60 days will be available.

Views requested on following -

1. How do generally read and apply Section 6 with explanation - is it treated as year-wise independent test, or has it commonly been applied by also considering the residential status in preceding years, as interpreted by the Tribunal in the Binny Bansal case?

2. In light of this judgment, do it is necessary to revisit and review residential status determinations of clients by examining their prior-year residential status, in line with the Tribunal’s interpretation?

Thanks & Regds

Pankaj Singh

AI Summary

Section 6 residential-status test: prior-year residency can bar 182-day relaxation for citizen/PIO, ruling clarifies, requiring review of prior determinations Section 6 residential-status test: the issue is whether determination is independent for each year or conditioned by prior-year status; the ITAT in Binny Bansal held that the relaxed 182-day threshold for a citizen/PIO applies only if the individual was a non-resident in preceding years, thereby clarifying that prior-year residential status can limit the applicability of the relaxed day-count. Operative effect: taxpayers who meet the day-count in a year may still be treated differently if they were resident earlier, potentially denying the 182-day relaxation. Review obligation: the issue is whether past-year status must be re-examined for existing client determinations; operative effect: practitioners may need to revisit and, where necessary, revise prior residential-status conclusions in light of the Tribunal ruling.