Case Details: Binny Bansal v. DCIT - [2026] 182 taxmann.com 226 (Bangalore - Trib.)
Judiciary and Counsel Details
- Prashant Maharishi, Vice President
- Keshav Dubey, Judicial Member
- Percy Pardiwala, Sr. Adv. for the Appellant.
- Arvind Kamath, ASG for the Respondent.
Facts of the Case
The principal issue before the ITAT was the determination of the residential status of the assessee, Mr. Binny Bansal, for AY 2020-21 under section 6(1)(c) of the Income-tax Act, 1961.
Specifically, the controversy centred on whether the assessee, who had taken up employment in Singapore, could claim the benefit of Explanation 1(b) to section 6(1)(c) by contending that he was “being outside India” and therefore subject to the 182-day threshold, or whether he was liable to be treated as a resident in India by applying the 60-day rule, having stayed in India for more than 365 days in the preceding four years.
ITAT Held
The Tribunal ruled as follows:
a)The Tribunal examined the scheme of section 6(1)(c) of the Act and held that the basic conditions for residence under domestic law were clearly satisfied in the assessee’s case. It noted that the assessee had been in India for more than 365 days during the four years preceding FY 2019-20 and had stayed in India for more than 60 days during the relevant previous year, thereby fulfilling the statutory requirements for being treated as a resident, unless the assessee could validly bring himself within the scope of Explanation 1.
b)On the interpretation of Explanation 1(b) to section 6(1)(c), the Tribunal agreed with the Assessing Officer and the DRP that the benefit of the extended 182-day threshold is intended only for individuals who are otherwise non-residents and who visit India, and not for persons who were ordinarily residents in India in the preceding years. The ITAT held that the expression “being outside India” cannot be read in isolation, and must be harmoniously construed with the main charging provision of section 6(1)(c). According to the Tribunal, the Explanation is a relaxation provision, meant to protect the non-resident status of persons already outside the Indian tax net, and cannot be invoked to convert a resident into a non-resident.
c)The Tribunal further observed that the assessee had been a resident of India for several consecutive years, including the immediately preceding years, and that his presence in India during FY 2019-20 was not merely casual or incidental. The assessee had visited India multiple times for business and personal reasons, and even after his alleged relocation, he spent a substantial portion of the year in India. Therefore, the Tribunal held that the assessee could not be characterised as a person who merely “came on a visit to India”.
d)With respect to the assessee’s alternative reliance on Explanation 1(a) (leaving India for employment), the Tribunal rejected this argument on the ground that Explanation 1(a) applies only to the previous year in which the individual leaves India for employment purposes. The facts on record established that the assessee left India in February 2019, which fell in the previous year 2018-19 relevant to assessment year 2019-20, not in the previous year 2019-20 relevant to assessment year 2020-21 under consideration.
e)The Tribunal also took note of the assessee’s long-standing economic and personal connections with India, including ownership of residential properties and significant business interests, and held that the conditions for invoking Explanation 1(a) were not satisfied.
f)The ITAT further examined the assessee’s claim under the India–Singapore DTAA, particularly Article 4(2), which addresses tie-breaker rules. It held that since the assessee was found to be a resident under Indian domestic law, the mere fact that he may also qualify as a resident of Singapore would not automatically entitle him to treaty benefits. In fact, the Tribunal accepted the Revenue’s finding that the assessee had a permanent home available in India, and that his centre of vital and economic interests continued to remain in India, especially considering the source and nature of his wealth and business activities.
g)On the issue of habitual abode and nationality, the Tribunal observed that the assessee was an Indian citizen who had lived and carried on his principal activities in India for most of his life, and that his relocation to Singapore did not, by itself, displace India as his habitual abode for the year under consideration. Consequently, even under the treaty tie-breaker analysis, the assessee could not dislodge India as the country of residence.
h)In light of the above findings, the ITAT upheld the conclusions of the AO and the DRP and held that the assessee was resident and ordinarily resident in India for AY 2020-21. As a corollary, the Tribunal held that the capital gains arising from the sale of shares were taxable in India, and the assessee was not entitled to claim exemption under Article 13(5) of the India–Singapore DTAA.
List of Cases Reviewed
List of Cases Referred to
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