Citizenship cannot be determined relying on Definition of 'Resident' under Income Tax Act: Rajasthan HC [Read Order]

A division bench of the Rajasthan High Court has held that the definition of the term 'resident' under the Income Tax Act, 1961 isdesigned for including persons in the tax net andnot for determining the citizenship.

The writ petitioner, Smt. Kamla submitted that the Hindustan Petroleum Corp. Ltd.was not qualified to be appointed as distributor under the Notice (Annexure-P1) and the guidelines applicable in the Hindustan Petroleum Corporation Ltd. for award of LPG distributorship. He urged that it is an admitted position that the respondent was not residing in India within a period of previous 180 days as on the date of award of dealership and thus, he was not a resident of India in terms of the definition of resident of India provided under the Income Tax Act and consequently, he could not have been awarded the dealership. On these grounds, Mr. Maheshwari implored the Court to admit the appeal and stay the impugned order.

Justice Sandeep Mehta Hon'ble Mr. Justice Vinod Kumar Bharwani observed that there is no reason to accept the assertion of the appellant that the respondent was not a resident of India by applying the provisions of the Foreign Exchange Management Act, 1999 and the Income Tax Act, 1961 because, both the acts have a different object and purposes.

“The condition imposed by the Income Tax Act that a person residing in India for a continuous period of 180 days would be considered to be a resident of India, is for the purpose of bringing such person in the purview of the Income Tax Act. The definition is simply designed for the purpose of including the persons who are in India for a period of 180 days to bring in the tax net and not for the purpose of determining the citizenship or for deciding the permanent resident status of such person,” the Court said.

“Apparently, the respondent owns properties in India. He is a bonafide resident of District Barmer and has all necessary identification documents which conclusively establish his status as a resident of India. The learned Single Bench extensively dealt with this aspect of the matter and turned down the argument advanced by the appellant’s counsel by assigning valid reasons,” the Court added.

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