Person stayed more than 182 Days in India is ‘Resident’, entire Salary subject to Income Tax: Calcutta High Court [Read Order]

The Calcutta High Court upheld the order treating the assessee as “Resident” for having stayed in India for 182 days, brought the entire salary under global income.

The petitioner, Tapas Kumar Basak has challenged the impugned order of the Director of Income Tax (International Taxation), Kolkata (respondent) passed under Section 264 of the Income Tax Act, 1961 which arises out of the assessment order passed under Section 147 or 144 of the Income Tax Act, 1961 treating the assessee/petitioner as “Resident” for having stayed in India for 182 days during the relevant previous year as per Section 6 (1) (a) of the Act and the Assessing Officer brought the entire salary of the petitioner amount to Rs. 12,26,822/- under the tax net as the global income of the resident as taxable while it is the claim of the petitioner that it is not taxable by taking the ground that during the financial year relevant to the assessment year 2004-05 he was on foreign water for a total period of 184 days and his residential status should have been taken as “Non-Resident” and salary received by him should have been treated as exempted by relying on Circular no. 586 of the CBDT dated 28th November, 1990 which is calculable for the crew members.

The single judge bench of Justice Md. Nizamuddin clarified that circulars/notifications upon which petitioner wants to rely is in conflict with Section 6 (1) of the Income Tax Act, 1961 and it is settled principle of law that if there is a conflict between a circular or notification and an Act the Act will prevail.

“I am not inclined to interfere with the impugned order of the respondent Commissioner of Income Tax dated 25th January, 2007 passed in exercise of his revisional jurisdiction under Section 264 of the Income Tax Act, 1961, confirming the order of assessment under Section 147/144 of the Income Tax Act, 1961 treating the petitioner as “Resident”, in the exercise of the limited scope of judicial review by this Court under constitutional writ jurisdiction under Article 226 of the Constitution of India,” the court said.

The court has heard Advocate Ananda Sen for the petitioner and Advocate Mr. P.K. Bhowmik for the respondents.

The ruling would have an impact on the NRI taxpayers during these days where so many people working abroad were stuck in India due to flight cancellation following the global pandemic.

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