2020 (6) TMI 35 - HC - Income Tax

Period of stay in India - ascertaining the tax residency status under Section 6(1)(a) - petitioner seeking a direction to respondents to disregard/exclude the days spent by the petitioner in India since 15th July, 2016 and for allowing the petitioner to file his income tax returns for the Financial Years 2018-19 and 2019-20 as an NRI - HELD THAT - Petitioner states that the petitioner has been forced to stay in India due to confiscation of his passport initially by the CBI and later on due to its deposit with the trial court. He points out that the passport of the petitioner is still lying deposited with the trial court. In the opinion of this Court, the issue whether the petitioner s presence in India was with his consent or against his Will is a question of fact which will have to be decided by the assessing officer. Consequently, the present writ petition is disposed of with liberty to the parties to raise all their pleas before the statutory authority, who needless to say, shall decide the same in accordance with law.

Summary

Issues:
1. Petitioner seeking direction to exclude days spent in India for tax residency status.
2. Petitioner requesting to file income tax returns as an NRI.
3. Disposal of writ petition with liberty to parties to raise pleas before assessing officer.

Analysis:
1. The petitioner filed a writ petition under Article 226 of the Constitution to direct the respondents to exclude the days spent in India since a specific date for determining tax residency status under Section 6(1)(a) of the Income Tax Act, 1961. The petitioner argued that his stay in India was involuntary due to the confiscation and subsequent deposit of his passport with the trial court. The court acknowledged the issue of whether the petitioner's presence in India was voluntary or forced as a question of fact to be determined by the assessing officer. The court disposed of the petition, granting liberty to the parties to present their arguments before the statutory authority, emphasizing that the assessing officer would make the final decision in accordance with the law.

2. Additionally, the petitioner sought permission to file income tax returns for the Financial Years 2018-19 and 2019-20 as a Non-Resident Indian (NRI). The petitioner's counsel highlighted the circumstances that led to the petitioner's extended stay in India, emphasizing the continued deposit of the passport with the trial court. The court recognized the petitioner's plea but directed the parties to address this request before the assessing officer for a proper determination based on factual considerations. The court's decision indicated that the assessing officer would have the authority to decide on the petitioner's classification for tax purposes in line with legal provisions.

3. The High Court, after considering the arguments presented, disposed of the writ petition with the liberty granted to the parties to raise all their contentions before the assessing officer. The court stressed that the assessing officer would be responsible for making the final decision on the matter in accordance with the applicable laws and regulations. The court ordered the immediate uploading of the order on the website and further directed the distribution of a copy of the order to the petitioner's counsel via email for their reference and compliance with the court's decision.