Salary of a person staying in India for more than 182 days being ‘Resident’ is subject to Income tax

In Tapas Kumar Basak v. Assistant Director of Income Tax, International Taxation-II & Ors. [W.P.O. No. 931 of 2007, dated September 16, 2021], Tapas Kumar Basak (“the Petitioner”) has challenged the impugned order dated January 25, 2007 passed by the Director of Income Tax (International Taxation), Kolkata (“the Respondent”) treating the Petitioner as “Resident” for having stayed in India for 182 days during the relevant previous year as per Section 6(1)(a) of the Income Tax Act, 1961 (“the IT Act”) 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 dated November 28, 1990 which is calculable for the crew members.

The Hon’ble Calcutta High Court noted that the Petitioner did not file any reply to the notice under Section 148 of the Income Tax Act neither at any point of time he challenged the said notice before this Court and he has not filed any application for rectification under Section154 of the IT Act for the assessment under Section 147/144 of the IT Act by which Petitioner was held as “Resident”. Moreover, he didn’t filed any Appeal before the Commissioner of Income Tax (Appeals) against the aforesaid assessment order though it was appealable.

Furthermore, the evidence by way of certificate of his employer upon which Petitioner wants to rely for his period of stay in question on foreign water was never produced or filed either before the Assessing Officer or before the Commissioner of Income Tax during the impugned proceeding under Section 264 of the IT Act in which the Commissioner of Income Tax has upheld the order of the assessment under Section 147/144 of the IT Act treating the Petitioner as “Resident” and for the first time Petitioner has produced the aforesaid certificate issued by his employer in this writ proceeding and wants this Writ Court to appreciate and consider the aforesaid piece of evidence in exercise of its constitutional writ jurisdiction under Article 226 of the Constitution of India.

Moreover, the circulars/notifications upon which Petitioner wants to rely is in conflict with Section 6 (1) of the IT Act 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.

In view of the factual and legal discussion made above, the Calcutta High Court did not interfere with the impugned order and confirmed the assessment order under Section 147/144 of the IT Act treating the Petitioner as “Resident”.

Accordingly, Writ Petition is dismissed with no order as to costs.

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