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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 ..... e had claimed income to be exempt under section 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 ..... 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 preceding the relevant year. He observed that this amendment is clarificatory in nature as per Explanatory Note in the Finance Act. He, accordingly, upheld the order of the Assessing Officer. 5. The ld. Counsel relied on various case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 taken as 'resident and ordinarily resident'. 10. I have considered the rival submissions and have perused the record of the case. As per section 6(1)(a), if a person is in India for a period or periods amounting in all to 182 days or more in a y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 fulfils this condition because he was resident only for 5 years in 9 out of the 10 previous years preceding the year in question. In support of his contention, the assessee has relied on various case laws particularly on the decision of the ITAT Bangalore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty nine days or less; or is a Hindu undivided family whose manager has been non-resident in India in nine out of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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 total income and consequently tax liability) or to impose new burdens or to impair existing obligations. In the words of Lord BLANESBURG, "provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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