Law: Income Tax Act, 1922

Section: 4,4A

[Indian Income Tax Act, 1922 (XI of 1922)].....Section 4A-Residence-Essential requisites-Intention to reside in taxable territory permanently -Whether should be decided from all the circumstances and objectively-Held yes; The question of "residence" of an assessee must be determined with reference to each year and what is important to consider is, therefore, whether the assessee was a "resident" in the year of account. To be a resident, the assessee should have factually come into the taxable territories at any time during that year, and, secondly, the Income Tax Officer must be satisfied that such individual is likely to remain in the taxable territories for not less than three years from the date of his arrival. In other words, it has to be determined by the Income Tax Officer that, when the assessee arrived in India during the year of account, he had the intention of continuing to reside here for not less than three years. If he had not that intention, then, the mere fact that during the subsequent years he made up this mind to come and remain in this country for the requisite period will not make him a "resident" during the relevant year of account and, on the other hand, if the assessee had the intention at the time of his coming here of continuing to remain in this country for more than three years, the fact that he changed his mind the following year and left this country will not affect his liability to tax as "resident". Whether the circumstances warrant an inference that the assessee had the intention when he arrived of living in this country for the next three years will have to be decided objectively. On the facts of the case, their Lordships held that the Tribunal had sufficient material before it to sustain its conclusion that during the month of March, 1942, the assessee did not arrive in this country with any intention of taking up his residence for the prescribed period of time. Cases referred to: Janaba Muhammad Nachiar Ammal v. Commissioner of Income Tax (1956) 29 I.T.R. 848 ; United Nilgiris Services Ltd. v. Commissioner of Income Tax (1960) 40 I.T.R. 369. ORDER [The judgment of the court was delivered by S. RAMACHANDRA IYER C.J.].-The…

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