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

Residential status under Section 6 is ordinarily a year-wise test, though prior-year residence may affect visit-to-India claims.
Residential status under Section 6 of the Income-tax Act is ordinarily determined year by year on the basis of physical stay in the relevant previous year, applying the statutory day-count tests together with the applicable explanations. The commonly accepted view is that the concessional 182-day threshold for a citizen of India or person of Indian origin visiting India is linked to the facts of the relevant year and does not, on the statute's plain reading, require proof of non-resident status in earlier years unless the provision expressly says so. The Binny Bansal ITAT view is described as debatable, though it may increase litigation risk in borderline cases.