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TMI Blog2006 (6) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 5(1) of the Act. The assessee was serving in Merchant Marinar in the rank of Chief Officer and deriving salary in foreign currency from the employer M/s. MOL Ship Management Asia Pte. Ltd., Singapore. The assessee claimed his residential status as "resident but not ordinarily resident". In support of his claim of status, the assessee has submitted copy of acknowledgement of filing of return for assessment years 1995-96 to 1999-2000 and certificate of being out of India for the preceding years. The Assessing Officer noticed that assessee had not been in India as per certificate as under: --------------------------------------------------------- Previous year No. of days Residential status ----------------------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 'resident and ordinarily resident' or 'resident but not ordinarily resident' he noted that he had been resident in India in 5 years out of 10 previous years preceding previous year under consideration. Thus, he had been in India more than 730 days in all during the seven previous years preceding the year under consideration. After considering the assessee's submissions, the Assessing Officer treated the assessee as 'resident and ordinarily resident' under section 6(1) read with section 6(6) of the Act. The ld. CIT(A), after considering the amendment brought in the Act by the Finance Act, 2003 in section 6(6), observed that the person will be 'not ordinarily resident' only when he is non-resident in at least 9 out of 10 previous years prec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys down that a person is not ordinarily resident in India if in 9 out of 10 preceding years he had not been resident in India. This decision of the Hon'ble Allahabad High Court was affirmed by the Hon'ble Supreme Court in Morgenstern Werner's case. 9. The ld. DR pointed out that in order to remove the ambiguity in the section, a clarificatory amendment has been brought out in section 6(6)(a) and in view of this amended section unless an individual has been non-resident in India in 9 out of 10 years preceding the year under consideration, he will not be treated as 'resident but not ordinarily resident'. He submitted that assessee was, admittedly not non-resident in 9 out of 10 preceding years and therefore, his status has rightly been take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en he satisfies one of the basic conditions as contemplated under sub-section (1) of section 6 and either of the conditions as contemplated under sub-section (6) clause (a) is fulfilled. In the present case, it is not disputed that the assessee was in India for more than 730 days and therefore, one of the conditions laid down under clause (a) to sub-section (6) of section 6 is not satisfied. There is no dispute to this extent. 13. Now the dispute concentrates only with respect to the other part of clause (a) of sub-section (6) of section 6 viz. - an individual who has not been resident in India (non-resident as substituted by Finance Act, 2003) in nine out of the ten previous years preceding that year. The assessee's claim is that he fulf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to, seven hundred and thirty days or more; or is a Hindu undivided family whose manager has not been resident in India in nine out of the ten previous years preceding that year, or has not during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and thirty days or more. This definition has been subject to differing legal interpretations. 6.2 In order to remove any doubts in this regard, the Act has substituted the existing definition with a new one to provide that a person would be "not ordinarily resident" in India in any previous year if such person is an individual who has been non-resident in India in nine out of the ten previous years preceding that year, or has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red a vested right in the form of reduced total income. In regard to statutes dealing with substantive rights, I may refer to the decision of the Hon'ble Supreme Court in the case of Keshavan Madhava Menon v. State of Bombay AIR 1951 SC 128 wherein it has been held that a cardinal principle of construction of statutes is that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. This rule is applicable where the object of the statute is to affect vested rights (e.g. in the present case by amendment, a person who hitherto was to be assessed as 'resident but not ordinarily resident' will be assessed as 'resident and ordinarily resident' thereby increasing his scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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