BINNY BANSAL,SINGAPORE V. DEPUTY COMMISSIONER OF INCOME-TAX, INTERNATIONAL TAXATION, CIRCLE-1(1), BANGALORE

ITITA 571/BANG/2023

AI Insights

The case involves Shri Binny Bansal, who appealed against the final assessment order for the assessment year 2020-21, which was passed by the Deputy Commissioner of Income Tax, International Taxation Circle 1(1), Bangalore. The primary contention was regarding his residential status and the consequent tax implications on capital gains from the sale of shares. The Tribunal examined various grounds including the applicability of the Double Taxation Avoidance Agreement between India and Singapore, the interpretation of residential status under the Income Tax Act, and procedural aspects of the assessment order. The Tribunal's decision was based on a detailed analysis of the legal provisions, judicial precedents, and the factual matrix presented by both parties.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827272 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 09-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Appeal Filed On: 08-08-2023
• Other Referred Cases: Director of Income-tax, International Taxation, Bangalore vs. Manoj Kumar Reddy Nare, Additional Director of Income-tax vs. Sudhir Choudhrie, Income-tax Officer vs. Dr. M.P. Konanhalli, AMP Spinning and Weaving Mills Private Limited vs. Income Tax Officer, Mc Dowell & Co. Ltd. vs. Commercial Tax Officer, Shyam Sunder Bhartia vs. Deputy Commissioner of Income-tax (International Taxation), Atos India (P.) Ltd. vs. Deputy Commissioner of Income-tax, Johnson & Johnson (P.) Ltd. vs. Dy. CIT/ACIT/Jt./ITO/NFAC, Delhi, Aldrin Alberto Araujo Soares vs. Deputy Commissioner of Income-tax, Principal Commissioner of Income-tax vs. Binod Kumar Singh
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARVIND KAMATH; ASG
• Assessee Lawyers: PERCY PARDIWALA; WAY OF
• Keywords: Capital asset; Revised return; Transfer pricing; Salary income; Capital Gains; Principle of natural justice; Source of fund; Avoidance of tax; Initiation of penalty proceedings; Double taxation relief; Services rendered outside India; Residential status
• Section: 143(3); 142(1); 54F; 90; 234B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER IT(IT)A No.571/Bang/2023 Assessment year : 2020-21 Shri Binny Bansal, 11, Nathan Road, # 24-02, Singapore 248732. C/o. Mr. Chavali Narayan, Ernst & Young LLP, 4th Floor, Divyasree Chambers, ‘A’ Wing, # 11, O’Shaughnessy Road, Langford Gardens, Bengaluru – 560025. PAN: AKEPB 4202D Vs. The Deputy Commissioner of Income Tax, International Taxation Circe 1(1), Bangalore. APPELLANT RESPONDENT Appellant by : Shri Percy Pardiwala, Sr. Advocate Respondent by : Shri Arvind Kamath, ASG. Date of hearing : 31.10.2025 Date of Pronouncement : 09-01-2026 O R D E R Per Prashant Maharishi, Vice President 1. This appeal is filed by Shri Binny Bansal (the assessee/appellant) for the assessment year 2020-21 against the final assessment order passed u/s. 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 [the Act] dated 31.07.2023 by the DCIT (IT), Circle 1(1), Bangalore in Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 2 of 189 pursuance of the directions of the Dispute Resolution Panel-1, Bengaluru [ld. DRP] dated 28.6.2023. 2. The assessee has raised the following grounds of appeal :- “1. The learned AO, in the impugned order issued pursuant to the Directions of the Hon'ble DRP erred in law and in facts by assessing the total income of the Appellant at INR 10,81,93,95,700 instead of the returned income of INR 8,33,19,930. 2. The learned AO / Hon'ble DRP erred in both law and facts by erroneously concluding that the Appellant is a resident of India under section 6(1)(c) of the Act for the Financial Year (\"FY\") 2019-20. 3. The learned AO / Hon'ble DRP has failed to appreciate that for the FY 2019-20, the Appellant qualified as a person who \"being outside India, comes on a visit to India\", and thus, should be classified as a Non-Resident according to Explanation 1(b) to section 6(1)(c) of the Act, as his presence in India during the relevant previous year was for less than 182 days: 4. Without prejudice to the above ground, the learned AO / Hon'ble DRP has erred in law and facts by not appreciating that even if Explanation 1(b) to section 6(1)(c) of the Act were deemed inapplicable to the Appellant for the relevant previous year, the Appellant would still qualify as a non-resident under Explanation 1(a) to section 6(1)(c) of the Act as the Appellant departed from India to take up employment with Three State Capital Advisors Pte Ltd, Singapore during the FY 2019-20. 5. The learned AO / Hon'ble DRP has erred in law and facts, by not appreciating the fact that the Appellant satisfies the criteria to be considered a resident of Singapore as per Article 4 of the India- Singapore Double Taxation Avoidance Agreement. Instead, the Appellant has been erroneously deemed a resident of India under Article 4 of the India-Singapore Double Taxation Avoidance Agreement. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 3 of 189 6. That on facts and circumstances of the case, the impugned order passed by the learned AO is without jurisdiction, non-est, illegal and bad in law since the notice under section 143(2) of the Act was issued by National Faceless Assessment Center ('NFAC') which does not have jurisdiction over the Appellant's case which is under the International Tax Charge and hence the impugned order is bad in law. 7. Without prejudice to the above grounds, while the learned AO, consistent with the Appellant's residential status as \"non-resident\" per the Return of Income, has passed a draft assessment order under section 144C of the Act by treating the Appellant as an \"eligible assessee\" as defined under the provisions of section 144C(15)(b), the learned AO has erred in holding the Appellant to be a \"resident\" in the operative part of the draft assessment order which is inconsistent with and in contradiction with the learned AO's determination that the Appellant is a non-resident u/s 144C(15)(b) of the Act and hence the impugned order issued by the learned AO is bad in law and barred by limitation. 8. The Hon’ble DRP erred in passing the Directions under section 144C(13) of the Act in contravention of the CBDT Circular No.19 of 2019 dated 14 August 2019, thereby rendering the Directions invalid and deemed to have been never issued and thereby rendering the assessment proceedings null and void. 'Other grounds: 9. The learned AO erred in computing the assessed income, resulting in an erroneous higher demand. The learned AO assessed total income in the impugned order as INR 10,81,77,23,119 however in the computation sheet attached along with the impugned order the sum of INR 10,81,93,95,700 has been computed as assessed income, resulting in an erroneous higher demand. 10. The learned AO has computed the demand by erroneously considering a sum of INR 5,81,80,852 as refund already issued to the Appellant whilst the same has not been received by the Appellant. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 4 of 189 11. The learned AO has erred on facts and in law in charging interest under sections 234A and 234B of the Act. 12. The learned AO has erred, in law and on facts, in initiating penalty proceedings under Section 270A of the Act. The Appellant submits that each of the above grounds is independent and without prejudice to one another. Facts :- 3. The brief facts of the case show that assessee is an individual who filed his return of income for the assessment year 2020 – 21 claiming his status as a 'non-resident Indian' showing total income of ₹ 83,319,930. The case was selected for scrutiny and consequently the notice under section 143 (2) of the Act was issued on 29 June 2021. In response to that the assessee filed his submission on 20 September 2021. Further, case of the assessee was transferred from the assessing officer of the assessment unit to the Deputy Commissioner of Income Tax, Circle 3 (1) (1), Bangalore as the assessee has declared himself as non-resident in his ITR filed on 17 February 2022. 4. The claim of the assessee is that he is a co-founder of Flipkart, an online e-commerce platform. He was part of the leadership team at the Flipkart group since its establishment. He is serving in various capacity including as chairman, chief operating officer and group chief executive officer at various points in time. It was further stated that in August 2018, the Walmart group acquired a majority stake in the Flipkart group. Post the aforesaid acquisition, the assessee continued to serve as a chairman and chief executive officer of the Flipkart group. However, due to subsequent developments, the Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 5 of 189 assessee resigned from his role as chairman and group chief executive officer with effect from 13 November 2018. Thus assessee ceased to be in employment with the Flipkart group effective 13 November 2018. Assessee submitted that he left India for the purpose of taking up employment as chief executive officer of X to 10 X technologies PTE Ltd which was previously known as BTB Consulting PTE Ltd and commenced working in Singapore with effect from 22 February 2019. 5. During the financial year 2019 – 20, the assessee sold equity shares of Indian companies listed on stock exchange in India. He also sold shares in Flipkart Private Limited Company Incorporated in Singapore during financial year 2019 – 20. The fact shows that on 28 August 2019 the assessee sold 54,596 shares to Tiger Global Eight Holdings, on 28 August 2019 the assessee sold 47,759 shares to Internet Fund III PTE Ltd and on 27 November 2019 the assessee sold 5,39,912 shares to FIT Holdings SARL. The claim of the assessee that he was a resident of Singapore during financial year 2019 – 20 and therefore, pursuant to the provisions of section 90 (2) of the Act, the assessee is entitled to the benefit of India Singapore Double Taxation Avoidance Agreement [DTAA]. Therefore, the capital gain arising from sale of 5,39,912 shares of Flipkart Private Limited, a Singapore company, to FIT Holdings SARL are not taxable in India as per Article 13 (5) of the India Singapore Tax Treaty. Another fact relevant to the issue is that the purchaser FIT Holdings SARL on sale of the above shares on 21 June 2019 has Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 6 of 189 deducted tax at source amounting to ₹ 656,963,526/–. The explanation of the assessee is that the assessee had sold shares of Flipkart Private Limited to the above entity on 21st of June 2019. The assessee's claim is that the gain arising from the transfer of such shares is exempt under Article 13 (5) of India Singapore tax treaty. However, tax was deducted by the buyer on the long-term gains prior to considering the benefit under Article 13 (5) of the India Singapore tax treaty. Further the share transfer undertaken on 27 November 2019 the assessee submitted that the gain arising on the transfer of the 5,39,912 shares of FlipKart are not taxable under the Income Tax Act itself in view of Explanation 7 (a) to section 9 (1) (i) of the Act. However, the tax was deducted by the buyer on the long-term gains prior to considering the provisions of the above Explanation of the Act. Assessment proceedings: - 6. One of the reasons for selection of the return of income for scrutiny was the claim of high tax refund claimed by the assessee. For this assessee explained that he was employed in Singapore and was a resident in Singapore and capital gain arising from sale of the shares on 21 June 2019 are not taxable in India under Article 13 (5) of the India Singapore Double Taxation Avoidance Agreement and the capital gain so arising from the sale of shares undertaken on 28 August 2019 and 27 November 2019 are not taxable in India under Explanation 7 (a) to section 9 (1) (i) of the Act. Show cause Notice of AO: - Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 7 of 189 7. The learned assessing officer noted that the assessee stayed in India for more than 365 days during the last preceding four years and for 141 days in the financial year 2019 – 20 and therefore the assessee was asked to prove the residential status of the assessee as a non- resident as per provisions of section 6 (1) ( c ) of The Income Tax Act, 1961. The Ld AO was of the view that case of the assessee does fall within Explanation 1 of that section. The claim of the assessing officer was that the words of the Explanation \"being outside India\" are to be read in harmony with the provisions under section 6 (1) (C) of the Act. In the case of the assessee the assessee is resident in each of the previous four financial years and he has only travelled in the February – March 2018 and even for the financial year 2018 – 19, he was a resident of India. Therefore the AO noticed that for the financial year 2019 – 20, the assessee stayed in India for 141 days even after the purported shift of base to Singapore. Therefore the words \"being outside India\" do not apply to the assessee as the assessee is ordinarily resident of India for the previous four years and is resident for more than 60 days in the relevant financial year. With respect to the Explanation – 1 (b) it was stated that it is applicable only for a non- resident Indian citizen or person of Indian origin or overseas citizen of India who by virtue of his visit becomes a resident. The learned AO further referred to the memorandum to The Finance Act, 1994 wherein it is stated that this Explanation is for the purpose of \"extending the period of stay in India in the case of non-residents without losing their non-resident status\". Therefore, it is clear that the Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 8 of 189 purpose of the Explanation is for the benefit of the non-residents and not for those who are already residents in the previous 4 years as per the provisions of section 6 (1) (C) of the Act. The learned assessing officer further noted that even after the purported move for employment purposes outside India, the assessee continued to stay in India for 38.6% of the year under consideration. On the basis of the submission of the assessee of the duration of stay within and outside India, the learned AO noted that for the calendar year 2019 which is considered as the fiscal year for the tax assessment in Singapore, he is resident in India for 138 days. The assessee has not provided the number of days of stay in Singapore and whether the same is more than 183 days or not, which is the necessary condition to be a tax resident of Singapore for the relevant fiscal year. Further the AO noted that according to the India Singapore DTAA, Article 4 (2), the residential status is required to be determined in accordance with \"permanent home, Centre of vital interest and habitual abode\" in the above two countries. The assessee is undisputedly Indian national. Thus the learned assessing officer questioned the assessee that why his income should not be assessed as a resident for the financial year 2019 – 20 in relation to the assessment year 2020 – 21. The learned AO further questioned that even assuming that assessee is a resident of Singapore for the relevant assessment year and even if it claims exemption from tax on capital gains under Article 13 (4A) and the Article 13 (4A) which is also subject to the LOB [Limitation of benefit ] clause under Article 24A (1) of the treaty. Thus, the Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 9 of 189 assessee was questioned that limitation of benefit clause also prevents the assessee from claiming the benefit of Double Taxation Avoidance Agreement because his affairs are so arranged with the primary purpose to take advantage of the benefits of Article 13 of the agreement. The ld. AO issued show cause notice on 21/09/2022 on these issues. Reply of Assessee: - 8. The assessee submitted his reply on 26 September 2022. According to that the assessee strongly stated that the assertion made by the learned assessing officer that Explanation 1 (b) to section 6 (1) (c) of the Act is applicable only to individuals who were non-resident of India in the earlier years, is incorrect. It was submitted that there is no requirement for an individual to have been a non-resident in the preceding year in order to be covered by the Explanation 1 (b) to that section. It was further stated that \"being outside India\" is different from \"being non-resident\". An individual who goes overseas and takes employment \"outside India\" since his situs is outside India. Thus \"being outside India\" as referred to in Explanation 1 (b) should not be interpreted as \"being non-resident\". The assessee further referred to the legislative history of Explanation 1 (b) to section 6 (1) of the Act starting from Finance Act 1978, 1982, explanatory memorandum, CBDT circulars and the speech of the Finance Minister. The assessee further relied upon the judicial precedents in case of decision of the honourable High Court of Karnataka in case of Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 10 of 189 Director of Income-tax, International Taxation, Bangalore vs. Manoj Kumar Reddy Nare [2011] 12 taxmann.com 326 (Karnataka)/[2011] 201 Taxman 30 (Karnataka)/[2011] 245 CTR 350 (Karnataka)[20-06- 2011] and also submitted a table wherein the similarity between the case of the assessee and the case decided by the honourable Karnataka High Court were mentioned. The assessee also relied upon the decision of the coordinate bench in case of Additional Director of Income-tax vs. Sudhir Choudhrie [2017] 88 taxmann.com 570 (Delhi - Trib.)/[2017] 55 ITR(T) 681 (Delhi - Trib.)[06-03-2017], the decision of the coordinate bench in case of Income-tax Officer VS Dr. M.P. Konanhalli [1995] 55 ITD 266 (Bangalore)/[1996] 54 TTJ 38 (Bangalore) . 9. With respect to the issue raised by the learned assessing officer that the question of the assessee having declared the income from capital gain from the previous financial year it is apparent that the move was entailed on the question of taxability, the assessee submitted that migration to Singapore was for a bona fide personal and professional reasons, so no tax motives can be attributed for the same. Assessee referred to his submission dated 16 March 2022 and 19 September 2022. It was further reiterated that assessee has resigned from the employment in India with the Flipkart group in November 2018 and post his resignation, the assessee left India to take up the employment in Singapore with effect from February 2019. Throughout the financial year 2019 – 20, the assessee has been employed in Singapore and continues to be in employment until date. Assessee Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 11 of 189 further stated that he has a rented home in Singapore where he has resided throughout the financial year 2019 – 20. The family of the assessee is also residing in Singapore and the children of the assessee are attending schools there. The spouse of the assessee is also in employment in Singapore and the family of assessee and assessee continues to reside in Singapore till date. The assessee as well as his family has appropriate Singapore residence visas. Thus the claim of the assessee that his migration to Singapore was for bona fides personal and professional reasons and was not occasioned by the state of sale of shares of Flipkart Private Limited undertaken during the assessment year 2020 – 21. Assessee further stated that he has been a shareholder in Flipkart Private Limited since 2011 and undertaking sale of some of the shares in that company over the years. Thus the sale of shares by the assessee in financial year 2019 – 20 pertaining to assessment year 2020 – 21 is not a one-off event but the assessee has been undertaking sale of shares in the above company over the years. 10. With respect to the finding of the learned assessing officer that assessee continued to stay in India for 38.6% of the year even after he moved for employment outside India in Singapore, the assessee submitted that he did not \"continue to stay in India' but he has been briefly visiting India principally for the purpose of the business meeting with the existing and prospective investee companies with occasional visits for personal purposes. It was further stated that assessee's visits to India have been only for a shorter duration. The assessee explained that total number of days of stay in India during Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 12 of 189 financial year 2019 – 20 was considered at 141 days but total No. of days of visiting India excluding days where the assessee was stranded in India due to the Covid 19 pandemic is only 103 days . Thus with respect to the 38 day stay it was stated that it is because of the Covid 19 pandemic. 11. With respect to the claim of the assessing officer about applicability of Article 4 (2) of the Double Taxation Avoidance Agreement, which provides for determination of the residency of an individual, assessee submitted that that since the assessee is a resident of Singapore and not a resident of India, the 'tiebreaker test' in Article 4 (2) of the India Singapore tax treaty does not apply. It was further stated that article 4 (2) is only relevant where the assessee is a resident of both India and Singapore. 12. However, without prejudice, the assessee further submitted that assessee has a permanent home in Singapore and assessee does not own any residential house in India and he has also not taken any house on rent in India. Assessee submitted that assessee has commenced construction of a house at 411, Koramangala, Bangalore prior to considering the migration to the Singapore, construction of the house is proceeding slowly and it still remains under construction, therefore, same is not a home available to him in India. Thus it was the claim of the assessee that on the criteria of \"permanent home\" assessee has a permanent home in Singapore and does not have a permanent home in India. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 13 of 189 13. With respect to \"centre of vital interest \"it was submitted that during the financial year 2019 – 20, the assessee's personal and economic relations are close to Singapore than India. It was stated that assessee's nuclear family consisting of his spouse and his two children are residing in Singapore along with the assessee for the whole of the financial year 2019 – 20. Further the assessee does not have any dependent family members in the India and the parents of the assessee are residing in Punjab, are independent and even prior to his migration to Singapore his parents were not living with him. His children go to school in Singapore; spouse of the assessee is also employed in Singapore. He is principal bank accounts and credit cards are also in Singapore. Therefore, even the presences of his close family in Singapore, his social relations are close in Singapore than to India. Further with respect to the economic relationship of the assessee, it was submitted that assessee is employed in Singapore, does not have any office or other similar premises in India and he administers his investment from Singapore. Accordingly, it was submitted that he has \"his centre of vital interest\" is not with India since he moved to Singapore in February 2019 but with Singapore. 14. He further submitted that he has a habitual abode also in Singapore and not in India as Singapore is the place where the assessee customarily or usually is present by virtue of his employment in Singapore. He also submitted a chart to show that in financial year 2020 – 21 his No. of days of stay in India is 91 and further for Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 14 of 189 financial year 21 – 22 only 50 days and for financial year 2022 – 23 till the date of reply only 18 days. 15. Thus, it was claimed that according to the 'Tiebreaker\" test of DTAA also assessee is resident of Singapore. 16. With respect to the applicability of provisions of Explanation is 7 (a) to section 9 (1) (i) of the Act, it was submitted that the assessee has acquired the shares of Flipkart Private Limited on 19 October 2011 which are held for more than 24 months prior to the date of transfer and therefore the same are classified as 'long term capital assets' in terms of provisions of section 2 (29AA) of the Act. Assessee submits that on 28 August 2019 assessee has sold 54,596 shares, on 28 August 2019 in second trench assessee has sold 47,759 shares and on 27 November 2019 assessee has sold 5,39,912 shares. The assessee submits that the shares he holds in the above company represented less than 5% of the total share capital and voting power both on the date of the transfer of shares as well as at any time during the 12- month period preceding the share transfer. Further the assessee did not have the right to appoint a majority of the directors of that company on the date of transfer of shares as well as at any time during the 12- month period preceding the share transfers. It was further stated that assessee does not have any right to control the management or policy decisions directly or indirectly by virtue of shareholding or management rights etc on the date of transfer or at any time during the 12-month period preceding the share transfers. The assessee submitted Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 15 of 189 a copy of the shareholders agreement of Flipkart Private Limited also. Accordingly, it was stated that capital gain arising from the transfer of shares in Flipkart Private Limited does not accrue or arise in India as provided under Explanation 7(a) to section 9 (1) (i) of the Act. 17. With respect to the applicability of limitation of benefit clause as per Article 24A of the Double Taxation Avoidance Agreement assessee contended that that ambit of Article 24A is restricted to paragraph 4A and 4B of Article 13 and same is not applicable to capital gains falling under paragraph 5 of Article 13. As the assessee is capital gain earned by him on sale of shares in Flipkart Private Limited is covered under Article 13 (5) and not under Article 13 (4A) the same is not applicable. 18. It was further stated that the affairs of the assessee were not so arranged with the primary purpose to take advantage of the benefit of Article 13. The assessee once again reiterated the facts about his shifting from India to Singapore. Therefore, the assessee stated that the stand taken by the assessee in the return of income deserves to be accepted. Reasons of the Assessing Officer: - 19. The learned assessing Officer examined the explanation of the assessee and computed the days of the stay of the assessee from financial year 2015 – 16 to 2019 – 20 at 1237 days against the requirement of 365 days and also stay in the relevant previous year of Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 16 of 189 141 days. He further considered the provisions of section 6 of the Income Tax Act that provides that assessee was in India for more than 365 days in 4 previous year preceding financial year 2019 – 20 and was in India for more than 60 days during financial year 2019 – 20. Thus, According to Section 6 (1) (c) of the Act, assessee is resident of India. 20. He further referred to circular No. 554 dated 13 February 1990 to state that the above circular was issued with the intent of liberalisation of the criteria for determining the residential status in case of a non- resident Indians. He further examined the words used in the Explanation the term \"being outside India\" was to refer to a non- resident only. The state of being outside India was to refer to an individual who was, but of course, a \" non-resident\". He further analysed the stay of the assessee of 141 days in India for financial year 2019 – 20 and held that the assessee has not just come for a visit but has visited and stayed in India for multiple times for the purpose of business and employment. He further stated that the facts of the case of Vijay Mallya vs. Assistant Commissioner of Income-tax [2003] 133 Taxman 552 (Calcutta)/[2003] 263 ITR 41 (Calcutta)/[2003] 183 CTR 201 (Calcutta)[12-05-2003] wherein it is held that the determination of residential status of an assessee requires mandatory consideration of both sections 6 (1) (a) and 6 (1) (c) and stated that on the facts of the case of the assessee, this decision is squarely applicable. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 17 of 189 21. He further looked at the residential status of the assessee as per the income tax return filed by him. He noted that for assessment year 2008 – 09 till assessment year 2019 – 20 the assessee has stated himself to be a resident except for the nonfiling of the return for assessment year 2010 – 11, Therefore the assessee is resident and ordinarily resident as per the Income Tax Act 1961. The learned assessing officer further stated that the No. of days of stay in India as per the passport photocopy submitted by the assessee shows that his stay in four years prior to financial year 2019 – 20 is 1237 days against the requirement of 365 days. He further distinguished the facts of the decision of the honourable Karnataka High Court by referring to the tribunal decision in that case reported Manoj Kumar Reddy vs. Income-tax Officer (International Taxation) Ward-1(3), Bangalore [2009] 34 SOT 180 (Bangalore)/ [2010] 132 TTJ 328 (Bangalore) [03-04-2009] it was stated that the issue is in fact in favour of the revenue. The learned assessing officer further rejected the claim of the assessee that interpretation of Explanation 1 (b) to section 6 (1) (c) is restricted to non-resident would lead to an absurd result. It was stated that assessee has considered the hypothetical scenarios where assesses who are individuals ordinarily resident in India. The scenarios where the individuals are non-resident, then the benefit would be available to them in every possible situation under Explanation 1 (b) and that indeed is the intent of the law. Accordingly, the learned assessing officer held that the assessee is ' resident – ordinarily resident' as per the provisions Of the Income Tax Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 18 of 189 Act, 1961 and the claim of the assessee's status in the income tax return filed as non-resident was rejected. 22. With respect to the residential status as per the double taxation avoidance agreement with a specific reference to ' tiebreaker test' of Article 4 (2), the learned assessing officer held that the assessee has a permanent home in India and he has been living in an apartment at Bangalore as per the income tax record. Further the income tax record also shows that assessee has purchased a large residential house in Koramangala, Bangalore and has also staked the claim of deduction under section 54F in relation to assessment year 2015 – 16 on the purchase of this residential house. Thus according to the learned assessing officer, as extracted from the reply filed by the assessee, assessee has one flat at a Mantri Classic, Bangalore, house in Koramangala Bangalore and land in Gurgaon Haryana. The residential address of the assessee as per the income tax return from assessment year 2008 – 09 to assessment year 2019 – 20 shows that he was residing at C 703, Mantri classic apartments, Koramangala Bengaluru, Karnataka, 560034. Thus the submission made by the assessee that he does not own any residential house in India and he has not taken any house on rent in India was rejected. It was stated that assessee has always had a permanent residence in India. The learned assessing officer further noted that that the claim of the assessee that he has taken a rental accommodation in Singapore remains unverified. He further stated that there is no doubt that the permanent residence of the assessee was in India for the financial year Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 19 of 189 2019 – 20. He stated that during the Covid pandemic, Which was the most difficult times, the assessee stayed in India for 38 days and therefore the fact proves that where the intention of permanent residence truly resides in the case of this assessee. Accordingly the learned assessing officer held that even by the first tiebreaker clause, the assessee is resident of India as per the double taxation avoidance agreement as he has a permanent Home available to him In India Only. 23. The learned assessing officer further examined the centre of vital interest of the assessee by examining the summary of assets and liabilities for the respective years on looking at his return of income. Based on this, he held that the majority of the economic interest Of The Assessee Lies In India, The Shares Of Flipkart private limited Singapore with respect to which the capital gain is arising during the year, the underlying assets of these shares are also in an Indian entity namely FlipKart India Ltd. He further referred to the screenshot of the website of the company where the assessee is stated to be employed and derived salary income which shows that company is based at Bangalore. He further held that from the above screenshot, it is clear that the company is working on Indian start-up ecosystems, the client and customers are Indians, the organisation mostly comprises of Indians and the office address is in Bangalore, India. He further noted that on the website there is not a single whisper of Singapore clients or operation. The learned assessing officer was also of the view that assessee has singularly been in a Startup in India and to deny that the Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 20 of 189 centre of vital interest do not lie in India is an argument that is neither born by the facts nor even by imagination. Thus the learned assessing officer held that that the economic interest of the assessee also lie in India. 24. With respect to the question of habitual abode , the learned assessing officer noted that from the complete facts shown the habitual abode and nationality are obviously in this case are in India. The assessee for his entire life has been a resident of India and has been living in India and also an Indian national. Draft Assessment order: - 25. Accordingly the learned assessing officer held that the assessee is a resident of India for the financial year 2010 – 2011 to assessment year 2020 – 21 and assess the income of the assessee by computing the capital gain chargeable to tax and assessed the total income of the assessee at ₹ 1,978,875,775/–. As the assessee has declared an income of ₹ 83,319,930 in its return of income, an addition of ₹ 1,895,555,845/– is made to the total income of the assessee. The learned assessing officer further held that assessee has declared an income of Rs. 1,21,94,978/– is salary income in Singapore and accordingly filed income tax return and paid the requisite tax in Singapore, the assessee is eligible for the foreign tax credit, but the assessee has not filed form No. 67 as well as not claimed the foreign tax credit in the ROI, same was not given. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 21 of 189 26. Accordingly draft assessment order was passed on 30 September 2022 was u/s 143 (3) read with section 144C (1) of the Act. DRP Proceedings: - 27. The assessee filed an objection before The Dispute Resolution Panel, Bangalore [ the ld. DRP] who passed the direction on 28 June 2023. The ground No 2 of the objection was raised with respect to the residential status of the assessee according to the provisions of the Income Tax Act, which was rejected by the learned dispute resolution panel as per paragraph No. 2.2.13 and 2.2.14 based on the intention of the legislation to allow the non-resident to stay longer without losing the non-resident status and it did not apply for the individual who is an ordinarily resident. Thus, it was held that Explanation (b) applies to Nonresidents only and assessee is not entitled for same. 28. With respect to the residential status of the assessee under section 6 (1) (c) of the Act read with Explanation 1 (a) of the Act it was held that that same is not applicable in the case of the assessee and therefore the objection was dismissed. 29. With respect to ground No. 4 of objection with respect to the residential status as per the Double Taxation Avoidance Agreement between India and Singapore of Article 4 (2) was also dismissed. 30. With respect to the computation of the total income, ld DRP directed the learned assessing officer to verify the computation of the long- term capital gain and to be made in accordance with Rule 115 of the Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 22 of 189 Income Tax Rules and also directed the AO to verify the expenses incurred wholly and exclusively for transfer of a capital asset and to allow the deduction of the same. Thus the panel directed the learned AO to allow the expenses incurred on sale of shares. The assessee also got a benefit of deduction under section 80 G of the Act on the donation made. Final Assessment Order: - 31. Accordingly the long-term computation of capital gain was made by the learned assessing officer and granted the benefit of the provisions of Rule 115 of The Income Tax Rule as well as granted deduction of the expenses incurred towards the transfer of shares. Accordingly the long-term capital gain on account of sale of shares of Flipkart Private Limited was computed at ₹ 162,54,19,504/-. 32. The assessment order was passed computing the total income of the assessee at ₹ 1,819,395,700/–. By passing an assessment order under section 143 (3) read with section 144C (13) of the Act on 31st of July 2023. Submissions of ld. Sr. Advocate on behalf the Assessee: - 33. Assessee is aggrieved with the same and is in appeal before us. The learned senior advocate Shri Percy Pardiwala referred to the various grounds of appeal. He filed a paper book containing 1345 pages. He also referred to several judicial precedents and referred to the Hindi version of some of the Circular etc. issued by the CBDT. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 23 of 189 34. The Ld Senior Advocate first referred to the written submission filed by the assessee on 12/2/2024:- Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 24 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 25 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 26 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 27 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 28 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 29 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 30 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 31 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 32 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 33 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 34 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 35 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 36 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 37 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 38 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 39 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 40 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 41 of 189 35. With respect to ground No. [1] it was submitted that it merely challenges the assessment order at a particular sum instead of at the returned income and therefore such ground is general in nature. 36. Coming to ground No. [ 2 – 4] are with respect to the residential status of the assessee under The Income Tax Act. He firstly referred to the provisions of section 6 of The Income Tax Act and submitted that assessee has stated himself to be a 'non-resident' but the learned assessing officer has treated him as a 'resident of India' under the provisions of section 6 (1) (c) of the Act for the impugned financial year. He submits that an individual can be said to be resident in India for any previous year [i] if he is in India in that year for a period or periods amounting in all to 182 days or more, or [ii][a] within the four years preceding that year, he has been in India for 365 days or more and [ii][b] for that year for 60 days or more. He further referred to the Explanation 1 and submits as per clause (b) of Explanation 1, 60 days criteria in [ ii] [b] is further extended to 182 days in certain circumstances. 37. After that he referred to the history of the assessee stated that assessee is a founder of Flip Kart who resigned from that company on 13 November 2018. On 11 February 2019, he got an employment pass from Singapore government and he got employment letter on 17 February 2019 from a Singapore company X to 10 X Technologies PTE Limited . He arrived in Singapore to take up that employment on 21 February 2019 and his employment commenced on 22 February Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 42 of 189 2019. He returns to India on 1 September 2019 and on 4 September 2019, he resigned from X to 10 X Technologies PTE Limited, Singapore, while in India. On 10 September 2019, he left India to take up employment in Singapore and on 12 September 2019 his employment commenced with Three State capital Advisers Pte Limited, Singapore. He continues to be employed in that company and has not come back to India. 38. During this year, he has earned capital gain on sale of shares of a Singapore entity [Flipkart Private Limited] which has derived its valuation from an Indian entity [Flipkart India Private Limited]. Such sale took place somewhere in the month of July 2019. The second and third tranche of sales has happened in August 2019 and November 2019. According to the assessee, he submitted that the capital gain arising on the sale of a Singapore company is not chargeable to tax either as per the Indian Income Tax Act or as per the treaty. He submits that Article 13 (5) of the treaty exempt such capital gain from taxation in India. 39. He submits that that the learned assessing officer is of the view that the phrase mentioned in Explanation 1 (b) \"being outside India\" is only applicable to the non-resident. He strongly refuted the above finding of the learned AO. He referred to the legislative history of the above provisions. He first took us to the memorandum explaining the provision in The Finance Bill 1982 and referred to clause 43 wherein some relaxation was granted to the test of residency in India. He Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 43 of 189 submits that clause 33 explains what the provision is. According to clause 34, the Indian citizen who is rendering services outside India and who is only for vacation in India, there is an extended time of 90 days is granted. He further referred to clause 35, wherein it is specifically mentioned that with a view to avoiding hardship in case of Indian citizen's who are employed or engaged in other location outside India wherein the 60 days period considered in clause (c) was further increased to 90 days or more. He further referred to the provisions of the Finance Act 1982 wherein the finance Minister's speech was shown to us. In that speech at paragraph No. 74 and 75 was drawn to our attention wherein it was stated that the test of residency in India laid down for taxation purposes results in hardship to Indian citizens earning income in foreign countries who come to India for short spells. An individual is regarded as a resident in India in the year, if he stays in that year for 30 days only and also maintains a dwelling house for 182 days or more. It stated that as this test causes hardship to persons working outside India who come home even in a relatively short visit, such test was deleted. Further according to the paragraph No. 75, another test that for the persons Indian citizens who are employed out outside India who come to India only for vacation, the period for residential status is 90 days which was also extended to benefit the self-employed. He further referred to the Direct Tax (Second Amendment) Act, 1989 wherein as per paragraph No. 6.1 , on the re-presentation made by the non-resident Indians, that the period of 90 days or 60 days was too short, especially for those who Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 44 of 189 had to supervise their investment in India. Therefore, in order to enable the non-resident Indians to stay in India for a longer period for looking for after their investments without losing their non-resident status, clause (b) of the Explanation clause (c) of subsection (1) of section 6 has been amended and the period of 90 days provided there under has been increased to 150 days. The above amendment not only applied to a citizen of India but also to a person of Indian origin. He further referred to paragraph No. 19 of The Finance Act, 1994 wherein there is a further amendment to the conditions of the residential status. He further referred to official Hindi translation of section 6 (3) which is placed at the submission before the learned dispute resolution panel wherein the word \"being outside India\" and \"non-resident\" were also mentioned. His submission was that if the person ' being outside India ' is to be interpreted as Nonresident only, the statue would have used that simple phrase of \" Nonresident' only. 40. Accordingly, the contention of the learned authorised representative was that the assessee's case falls in the Explanation 1 (b) of the Act and therefore for application of clause (c) of subsection 1 of section 6, period of 182 days should be considered, instead of the period of 60 days considered by the learned assessing officer. Therefore his contention was that according to that Explanation, the assessee is not a resident of India. 41. He submits that assessee has stayed for 127 days in this financial year, which is less than 182 days for this year. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 45 of 189 42. Even otherwise his contention is that, even if he fails to satisfy that the case of the assessee falls under Explanation 1 (b), his case also falls under clause (a) of the above Explanation. He submits that if a citizen of India who leaves India in any previous year for the purpose of employment outside India, the criteria of 60 days mentioned in sub clause (c) should also be considered as 182 days. He submits that assessee is a citizen of India , who left India in any previous year for the purpose of employment outside India , therefore, the period of 60 days should also be extended to 182 days in his case. 43. Thus his argument is whether one take help of clause (a) or of clause (b) for the purpose of considering the period as per section 6 (1) (c) of the Act, the period of 60 days need to be extended to 182 days in case of this assessee. On that ground the assessee is not a resident of India, He submits that assessee has stayed 127 days in India for this year and therefore it is less than 182 days, and therefore the assessee is not resident in India. 44. He extensively referred to the order of the learned assessing officer and the direction of the learned dispute resolution panel to show that why the assessee has been considered as a 'resident of India' for the purpose of taxability. It was submitted that both the lower authorities have wrongly interpreted the provisions. 45. He relied upon the decision of honourable Karnataka High Court in case of Director of Income-tax, International Taxation, Bangalore vs. Manoj Kumar Reddy Nare [2011] 12 taxmann.com 326 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 46 of 189 (Karnataka)/[2011] 201 Taxman 30 (Karnataka)/[2011] 245 CTR 350 (Karnataka)[20-06-2011] where in the order of the ITAT in Manoj Kumar Reddy vs. Income-tax Officer (International Taxation) Ward- 1(3), Bangalore [2009] 34 SOT 180 (Bangalore)/[2010] 132 TTJ 328 (Bangalore)[03-04-2009] has been affirmed by the honourable Karnataka High Court. 46. In the end he referred to the decision of the special bench in case of AMP spinning and weaving Mills private limited versus income tax officer (2006) 100 ITD 142 (Ahd) (SB)/(2006) 101 TTJ 1113 dated 24 March 2006 and referred to paragraph No. 29 of that decision stating that where from any angle the case of the assessee is covered by the plane, clear and unambiguous statutory language of the provisions of the law, it requires no external aid, like object to construe them differently. He submitted that the language of the law is clear that 'being outside India' does not mean 'non-resident' only. 47. On ground of appeal No. 5 is submitted that assessee is also a resident of Singapore and he is also considered to be a resident of India, the tie breaker test between the residential status between these two countries is required to be applied. He Referred to Article 4 (2) of the DTAA. He submits that assessee is employed by Flipkart India , left India in November 2018, resigning from that particular place. He referred to provisions of Article 4 (2) and stated that the assessee has a permanent home in Singapore, his centre of vital interest are also situated in Singapore, his habitual abode is also in Singapore. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 47 of 189 Therefore, he should be considered as a resident of Singapore even applying ' tie breaker test' also. He submits that once the assessee has moved to Singapore he is staying there in a service apartment, therefore staying in a rented flat till 2019, is his permanent home available to him in Singapore. It was further stated that assessee has a home available to him in India, however, it is not in a habitable position and therefore the assessee does not have any home which can be said to be a permanent home available to the assessee. With respect to the centre of vital interest of the assessee, he referred to the submission made before the learned assessing officer stating that assessee centre of vital interest are also in Singapore. He submits that his family is staying with him, his wife is serving at Singapore, his children are studying at Singapore, he is staying there as an employee of a company in Singapore and therefore his centre of vital interest are in Singapore compared to India. It was the submission that merely claiming deduction under section 54F of the Act could not say that the centre of vital interest of the assessee or he has a permanent home available in India , are in India. Thus, according to tie breaker test also assessee is resident of Singapore only. 48. On ground no. [6] wherein it is challenged that on the facts and circumstances of the case, the impugned order passed by the learned assessing officer is without jurisdiction, non-est, illegal and bad in law, since the notice under section 143 (2) of the Act was issued by the National faceless assessment Centre (NFAC) which does not have jurisdiction over the appellant's case which is under the International Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 48 of 189 tax charge and hence the impugned order is bad in law. He submitted that this issue is already decided by the honourable Karnataka High Court in Adarsh Developers vs. Deputy Commissioner of Income-tax [2024] 158 taxmann.com 81 (Karnataka)[13-12-2023] against the assessee, however, to keep the issue alive the assessee would like to contest the same. 49. On ground No. [ 7 ] of the appeal main contest is that, assessee disclosed in his ROI his Residential status as ' Nonresident'. Assessing officer disputed assessee's residential status, held assessee to be ' resident In India'. Despite, this ld AO passes draft assessment order. Thus, ld AO treats the assessee as eligible assessee as defined u/s 144C (15)(b) of that Act which is only for non-Residents. Thus, the learned AO has erred in holding the appellant to be ' resident' in the operative part of the draft assessment order which is inconsistent with and in contradiction with the learned assessing officer's determination that appellant is a non-resident under section 144C (15) (b) of the Act. Hence, impugned order passed by the learned assessing officer is bad in law and barred by limitation. 50. To support his argument, he referred to the page No. 2 of the paper book and submitted that in the 'residential status' column, the assessee has filed its return of income stating him to be 'non-resident\". He further stated that assessee has shown his residence jurisdiction of ' Singapore\" and also given tax identification No. of that country. He referred to the draft assessment order dated 30 September 2022, in Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 49 of 189 paragraph No. 21 of that order, where the status of the assessee was considered to be a 'resident'. He further referred to paragraph No. 26 of the draft assessment order where in conclusion the learned assessing officer held that assessee is a 'resident and ordinary resident of India'. He further referred to the provisions of section 144C of the Act, and submitted that in case of an 'eligible assessee', the learned assessing officer should have at the first instance passed the draft assessment order. If the assessee is not an 'eligible assessee', there is no need to pass the draft assessment order. For the definition of the 'eligible assessee', he referred to the provisions of section 144C (15) (iia) of the Act. He submits that when the assessee is a 'resident of India', he is not an 'eligible assessee' and therefore in his case , no draft assessment order should have been passed and only final assessment order should have been passed. He further stated that the final assessment order should have been passed by 30 September 2022 whereas the draft assessment order is passed on 30 September 2022 culminating into a final assessment order on 31st of July 2023. The final assessment order passed by the ld AO is barred by Limitation. 51. He relied upon the decision of Shyam Sunder Bhartia vs. Deputy Commissioner of Income-tax (International Taxation ) [2023] 149 taxmann.com 162 (Lucknow - Trib.)/[2023] 200 ITD 117 (Lucknow - Trib.)[23-02-2023]. His argument was that when assessee is held by the learned assessing officer as 'resident' assessee, he is not an 'eligible assessee' and so the draft order is not required to be passed and hence Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 50 of 189 the order of draft assessment passed by the learned assessing officer in case of this assessee is invalid and therefore the final order is also passed by the learned assessing officer is barred by limitation. He relied upon the decision of the coordinate benches in case of Atos India (P.) Ltd. vs. Deputy Commissioner of Income-tax [2023] 152 taxmann.com 217 (Mumbai - Trib.)/[2023] 103 ITR(T) 296 (Mumbai - Trib.)[23-02-2023], Johnson & Johnson (P.) Ltd. vs. Dy. CIT/ACIT/Jt./ITO/NFAC, Delhi [2024] 158 taxmann.com 1246 (Mumbai - Trib.)/[2024] 112 ITR(T) 259 (Mumbai - Trib.)[13-06- 2023] and also the decision of the honourable Bombay High Court in case of Aldrin Alberto Araujo Soares vs. Deputy Commissioner of Income-tax [2024] 162 taxmann.com 186 (Bombay)/[2025] 482 ITR 257 (Bombay)[04-03-2024]. He further held that the honourable Karnataka High Court has admitted identical matter which is pending in case of Mr Riju Ravindran. Thus, he submits that the action of passing the draft assessment order in case of assessee who is not an ' eligible assessee' as per the ld AO himself, is bad in law and hence, final assessment order is barred by limitation, hence, deserves to be quashed. Submission of Ld. ASG on behalf of AO: - 52. On behalf of the department, ld. Additional Solicitor General Shri Arvind Kamat submitted ground wise submission. He also referred to written submissions made earlier and placed his written note. He first referred to his written note placed on record on 24/09/2025 as under :- Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 51 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 52 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 53 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 54 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 55 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 56 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 57 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 58 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 59 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 60 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 61 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 62 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 63 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 64 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 65 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 66 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 67 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 68 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 69 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 70 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 71 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 72 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 73 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 74 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 75 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 76 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 77 of 189 53. With respect to ground No. 6 he submitted that the issue of notice under section 143 (2) issued by the National Faceless Assessment Centre is in order as held by the honourable single judge of Karnataka High Court in case of Adarsh Private Limited which is also confirmed by the learned authorised representative and therefore no further arguments are required. 54. On Ground No 7, on the issue of the assessee not being an eligible assessee, he referred to the provisions of section 144C of the Act and submitted that the draft assessment order is required to be framed \"in the first instance\" and therefore as the assessee has claimed himself to be a non-resident Indian, the learned assessing officer is duty-bound to pass a draft assessment order first. He submits that the claim of the assessee is that he is a non-resident assessee and therefore when the learned assessing officer is passing the assessment order, he has to consider this 'at the first instance' and then pass the draft assessment order first. He submits that whatever is the disclosure made by the Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 78 of 189 learned assessing officer in his return of income is mandatory to be considered by the assessing officer and therefore as the assessee himself has claimed his return of income showing the status as \"non- resident,\", there is no infirmity in the draft order passed by the learned AO. He further submitted that all the cases shown by the learned authorised representative are pertaining to the transfer pricing assessment and therefore they do not apply to the facts of the case. With respect to the decision of the honourable Bombay High Court decision in case of Aldrin Alberto Araujo Soares vs. Deputy Commissioner of Income-tax [2024] 162 taxmann.com 186 (Bombay)/[2025] 482 ITR 257 (Bombay)[04-03-2024] relied upon by the assessee, it was submitted that the judgement turned into on its particular facts which are mentioned in the order of the honourable Bombay High Court. The facts in case of this assessee are quite distinguishable and therefore all these decisions do not apply. 55. He further submitted that if the learned assessing officer had not passed the draft assessment order in the instant case but if final assessment order would have been passed, and if later on the assessee succeeds before the higher forum that his status is \"non-resident\", then the assessee would say that the learned assessing officer should have passed the draft assessment order first. Therefore his submission was that 'at the first instance' the provisions itself says that in case of an eligible assessee, draft assessment order should have been passed. He submits that the assessee cannot claim that in his return of income he is a non-resident and for the purpose of procedure of the assessment, Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 79 of 189 he is claiming that the procedure should have been adopted of a resident not of a non-resident. He otherwise submitted that that decision of the honourable Bombay High Court on its observation clearly shows that assessee cannot have both the worlds. Thus he submits that that ground No. 7 of the appeal of the assessee should fail on this count itself. 56. On the issue of resident versus non-resident ground No. 2 – 4 of the appeal, the learned ASG specifically referred to the observation of the learned assessing officer and specifically stated that for the purpose of considering the residential status of the assessee, provisions of section 6 of the Act are required to be considered. The assessee does not fulfil condition of being in India for more than 182 days for that assessment year. But assessee is also in India for more than 365 days in four preceding years as well as more than 60 days in the impugned year. Therefore, conditions of the residential status to consider him as a 'resident in India' are fulfilled. 57. With respect to the provisions of Explanation 1 (b), he specifically stated that all the circular cited by the assessee clearly shows that they speaks about the non-resident and amendment was to facilitate and relax the conditions of residential status for the non-residents. He submits that when the provisions of the law enunciated by the Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 80 of 189 circulars clearly shows that the Explanation applies only to the non- resident, there is no reason to accept the fact that phrase 'being outside India\" should be also applicable to the person who is not a non- resident. He further referred to the various circular cited by the learned assessing officer such as circular No. 554 dated 13 February 1990, circular No. 684 of 10 June 1994. Thus he submitted that the explanation submitted by the assessee that above clause (b) applies only to a non-resident is devoid of any merit. 58. In a distinct argument, the ld ASG submitted that the ld AO has also stated that shifting of the residence of the assessee from India to Singapore is just to avoid taxes. He specifically referred to the fact of the case, and page No. 104 of the paper book wherein a notice under section 142 (1) of the Income Tax Act was placed. He submits that the assessee was asked by paragraph No. 1 to give a detailed note on purpose of his visit or stay in Singapore and further the learned assessing officer in paragraph No. 2 referred to the Direct Tax Code and stated that the stay of the assessee in Singapore for assessment year 2020 – 21 leading to he being treated as a tax resident of Singapore for the concerned assessment year on sale of shares, the provisions of general anti-avoidance rules are applicable. Therefore, the whole exercise of the assessee of sifting his residence to Singapore consequent to the sale of shares was alleged by the learned assessing officer to be an anti-avoidance of tax Step. He further referred to the reply of the assessee at page No. 7 dated 14 March 2022 wherein the assessee did not give the complete detail but sought an adjournment. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 81 of 189 He further referred to page No. 186 of the submission of the assessee dated 16 March 2022 wherein on page No. 187 the assessee replied that \"the assessee has left India for the purpose of taking up employment as chief executive officer of X to 10X technologies pte Ltd (previously known as B2B consulting PT Ltd) and commenced work in Singapore with effect from 22 February 2019. A copy of the employment letter as well as letter to the Ministry of Manpower confirming his date of joining the company is enclosed as annexure 4A and 4B respectively. The employment pass that had been issued to the assessee by the Ministry of Manpower, Singapore in this regard is enclosed as annexure 5. As co-founder and principal shareholder of X to 10 X, the assessee has continued to advise and guide X to 10 X till date. The assessee spouse and his two minor children moved to Singapore to take up residence with the assessee in March 2019. On 12 September 2019, the assessee took up the role of chief executive officer of Three State Capital Advisors PTE Ltd Singapore, (previously known as B2B Advisors Pte Ltd.), presently renamed to Three State advisors Pte Ltd. As chief executive officer the assessee is responsible for the management and conduct of the business of the company. A copy of the employment letter is enclosed as annexure 6 and copy of the employment pass that had been issued to the assessee by the Ministry of Manpower, Singapore is enclosed as annexure 7\". The learned ASG further took us to page No. 197 of the paper book which is a letter written by B2B Consulting Private Limited on 17 February 2019 to the assessee wherein employment was \" at will\" and Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 82 of 189 further the services can be terminated by giving the three months prior notice. He further referred to page No. 20 for of the paper book which is an executive agreement executed on 28 August 2019 between Three State Capital Advisors Private Limited and the assessee. He further referred to page No. 374 being notice under section 142 (1) issued by the learned assessing officer on 15 September 2022 wherein the issue of residential status was once again raised by the assessing officer. He referred to the reply of the assessee dated 19 September 2022 placed at page No. 377 of the paper book and also referred to factual background of the assessee as mentioned at page No. 378 of the paper book. On the basis of the above explanation, he referred to page No. 439 of the paper book which is a certificate confirming incorporation of a company issued by accounting and corporate regulatory authority of Singapore wherein Three State Advisors PTE Ltd was formerly known as BTB Advisors Private Limited with effect from 12 April 2019. He submitted that the executive agreement between Three State Advisors Private Limited was executed with the assessee only on 20 August 2019 and therefore as on that date, the Three State Capital Advisors PTE Ltd was not at all in existence which has come into existence only on 2 September 2019. He further referred to the page No. 456 of the paper book which is a new work pass card issued by controller of work passes, Singapore on 16 September 2019 in the name of employer BTB Advisors PTE Ltd. He submits that when already there is a name change with effect from 2 September 2019, how the work pass was issued in the name of BTB Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 83 of 189 Advisors Private Limited on 16 September 2019. He further referred to page No. 703 of the paper book which is a notice issued by the learned assessing officer on 21 September 2022 wherein the learned assessing officer as per paragraph No. 8 clearly asked the assessee to show his residential status as per The Double Taxation Avoidance Agreement also holding that the learned assessing officer has already held that the assessee is resident as per provisions of section 6 (1) (C) of the Act. He further referred to reply of the assessee placed at page No. 709 of the paper book and referring to page No. 722 of the paper book submitted that assessee has a permanent home in India as already stated by the learned assessing officer. He further referred to page No. 1036 which is a resignation letter issued by the assessee to the board of directors of X to 10X PTE Ltd on 5 September 2019 which is accepted and confirmed by Mr Sai Kiran Krishnamurthy, director of the above company. It was further stated that the resignation letter is dated 5 September 2090, wherein the resignation was to be effective from 1 September 2019 waiving of the formal notice period as per agreement. He further referred to the screenshot of X to 10 X website and referred to the observation of the AO that this company did not have any substance in Singapore. 59. He submits that the assessee has not produced the executive agreement of X to 10 X pte Ltd. Further at page No. 1036 which is the resignation letter of the assessee and submitted that this resignation letter was submitted to the company in Singapore when the assessee was in India. Now the same is resignation letter has been Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 84 of 189 accepted by a company in Singapore through its director Mr Sai Kiran Krishnamurthy on the same date. He further stated that the resignation letter does not show any place from where the assessee has signed or the date of acceptance by the employer. The learned ASG further stated that the above documents clearly shows that the executive agreement entered on 20 August 2019 with Three State Capitals PTe Ltd when the above company was came into existence only on 2 September 2090 could have been entered into. It is submitted that assessee has left India in February 2019 which falls in the financial year 2018 – 19 which is not the relevant year to claim the benefit. He submitted that the relevant previous year is 2019 – 20 relevant to assessment year 2020 – 21. He also submitted that the tax to 10X Pte Ltd, has the address of 80, Raffeles Place #32-01, UOB Plaza Singapore 048624, he also referred to the appointment letter to the assessee by BTB Consulting Private Limited placed at page No. 426 of the paper book which also shows the same address. The same address is also shown of Three State Capital Advisors PTE Ltd. He further submitted that assessee is a promoter and employee of all these companies and also a major shareholder. 60. Based on the above documents, he submitted that these documents have been created to show that assessee is a non-resident only. Therefore, it is apparent that all these documents are created by the assessee which is a colourable device to just prove that assessee is a Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 85 of 189 non-resident for the impugned assessment year. He submitted that all these documents are not bona fide documents, but created to give the assessee an evidence to show that his residential status is \"non- resident\". He submitted that So far as the contention that it is open to everyone to so arrange his affairs as to reduce the brunt of taxation to the minimum, was concerned, the tax planning may be legitimate provided it is within the framework of law. Colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment of tax by restoring to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges. Courts are now concerning themselves not merely with the genuineness of a transaction, but with the intended effect of it for fiscal purposes. No one can now get away with a tax avoidance project with the mere statement that there is nothing illegal about it, and ld. ASG vehemently relied up on the decision of Honourable supreme court in Mc Dowell & Co. Ltd. vs. Commercial tax Officer [1985] 22 Taxman 11 (SC)/[1985] 154 ITR 148 (SC)/[1985] 47 CTR 126 (SC)[17-04-1985]. 61. The learned Additional Solicitor General read his detailed note which is as under:- Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 86 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 87 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 88 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 89 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 90 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 91 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 92 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 93 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 94 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 95 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 96 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 97 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 98 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 99 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 100 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 101 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 102 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 103 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 104 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 105 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 106 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 107 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 108 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 109 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 110 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 111 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 112 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 113 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 114 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 115 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 116 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 117 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 118 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 119 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 120 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 121 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 122 of 189 REJOINDER OF THE LD SR. ADVOCATE ON BEHALF OF ASSESSEE 62. The learned authorised representative vehemently supported the contentions already raised. With respect to ground No. [6] he submitted that assessee has stated that this issue is covered in favour of the revenue by the decision of the honourable Karnataka High Court but is pending before the division bench and therefore the assessee would like to contest the same. With respect to the issue of the eligible assessee he submitted that if the assessing officer is of the Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 123 of 189 view that assessee is a resident in India, he should not have passed the draft assessment order but should have passed the final assessment order. The movement he has passed the draft assessment order, he has to understand the consequence of the same. He submitted that the issue is squarely covered by the decision of the honourable Bombay High Court in favour of the assessee. With respect to the residential status he submitted that that the meaning to the phrase ' being outside India' given by the revenue is totally absurd. He submitted that if that would have been the intention of the legislature, it would have used a simple phrase \"who is a non-resident of India\" instead of, 'being outside India'. With reference to various circulars referred to by the learned assessing officer it was submitted that those were based on the three presentation of non-resident Indians but that does not mean that it should not apply to anybody else who fulfils the requirement of the law. With respect to the challenge by the learned additional Solicitor Gen stating that it is a colourable device and general anti-avoidance rule can be made applicable, he submitted that such notice was issued by the learned assessing officer for which the reply was filed by the assessee which is placed at page No. 189 of the paper book and therefore the assessing officer did not invoke the provisions of the general anti-avoidance rule. Now the revenue cannot bypass that provision which is existing in the statute and contend that same is applicable. It was further stated that even the dispute resolution panel also does not indicate this issue so it is not open now for revenue to say that the general anti-avoidance rule 10 B made applicable. It was Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 124 of 189 further submitted that the argument of the revenue goes beyond the scope of the original proceedings and viability of natural justice and deserves to be rejected in limine. It was further submitted that in this appellate stage, revenue is precluded from travelling beyond the scope of the original assessment order which is the subject matter of appeal. Doing so would mean rewriting revising the assessment order which is permissible in any appellate proceedings. It was further stated that it would amount to the invoking the backdoor entry to revise the assessment order instead of following the statutory provisions of section 263 of the Income Tax Act. The learned authorised representative further relied upon the decision of the honourable Bombay High Court in CIT versus Bombay pipe traders (1994) 75 taxman 533 (Bom) wherein it has been held that revenue cannot be allowed to sustain a ground in appeal which was never the subject matter of the show cause/assessment proceedings. He further relied upon the decision of the honourable Supreme Court in case of Warner Hindustan Ltd versus collector of central excise (1999) 113 ELT 24 (SC) wherein it has been held that the revenue cannot, at the appellate stage, raise a new ground and alter the very basis of classification that was never part of the original proceedings. He urged that the appellate forum must confine itself to the case made and decided by the lower authority, without permitting the respondent to set up an altogether new case. 63. Further the learned authorised representative was aggrieved as the learned ASG filed a written submission on 31st of October 2025 for Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 125 of 189 the reason that by filing the written submissions, the assessee was denied an opportunity to peruse and respond to the submissions made by the learned ASG, therefore, assessee was given an opportunity of hearing and to make any submission which he would like to place on record. Pursuant to that the assessee submitted a detailed rebuttal to the written submission filed by the respondent on 31st of October 2025 by filing a detailed paper book on 12 November 2025 wherein a written submission of 24 pages was provided along with the reliance was placed on nine different judicial precedents. 64. The written submission placed by the assessee on 12-11- 2025 is as under:- Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 126 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 127 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 128 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 129 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 130 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 131 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 132 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 133 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 134 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 135 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 136 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 137 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 138 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 139 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 140 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 141 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 142 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 143 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 144 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 145 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 146 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 147 of 189 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 148 of 189 65. During the course of hearing the assessee was asked to submit the summary of investment made by the assessee in India and outside Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 149 of 189 India. Such statement was also given at page No. 25 of the above compilation wherein the assessee was holding the total investment in India of ₹ 7,002,052,377 as on 31st of March 2020 and further assessee is shown to have made an investment outside India as on 31st of March 2020 of US$ 121,008,379 amounting to ₹ 9,156,099,015. This sum included a sum of ₹ 7,461,697,525/– made by the assessee has capital contribution to trust outside India. Decision and Reasons 66. We have carefully considered the rival contention and perused the orders of the learned lower authorities. We have also carefully considered the several judicial precedents relied upon before us. 67. Ground No. 1 of the appeal is agreed by both the parties is general in nature, no separate arguments were advanced, hence same is dismissed. 68. Ground No. 2-4 of the appeal is with respect to the residential status of the assessee as per provisions of the Income Tax Act. Section 6 of the Income tax Act defines the Residential Status of an assessee. It provides that :- 69. For the purposes of this Act,- (1) An individual is said to be resident in India in any previous year, if he- (a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more ; or Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 150 of 189 (c) having within the four years preceding that year been in India for a period or periods amounting in all to three hun-dred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year. [Explanation 1.]-In the case of an individual,- (a) being a citizen of India, who leaves India in any previous year [as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or] for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and eighty-two days” had been substituted ; (b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previ-ous year, the provisions of sub-clause (c) shall apply in rela-tion to that year as if for the words “sixty days”, occurring therein, the words “one hundred and [eighty-two] days” had been substituted. 70. The controversy in these grounds is with respect to the issues that whether assessee is non Resident as per the provisions of section 6 of the Act. It is an undisputed fact that in FY 2019-20 , assessee stayed in India for 141 days. Therefore according to section 6(1)(a) assessee does not cross threshold of 182 days. 71. According to provision of section 6 (1) (c) of the Act , if having within the four years preceding that year been in India for a period or periods amounting in all to 365 days or more, is in India for a period or periods amounting in all to 60 days or more in that year. Thus , both the cumulative considering of stay in four preceding years and also of stay in the relevant financial year needs to be satisfied to hold the assessee as resident in India. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 151 of 189 72. The assessee has stayed in India for preceding four years as under :- F Y A Y Number of days stay 2015-16 2016-17 318 2016-17 2017-18 326 2017-18 2018-19 325 2018-19 2019-20 268 Total 1237 days. 73. Thus assessee has stayed for more than 365 [ 1237 days] in preceding four years, the first threshold of section 6 (1) ( c) is met . 74. The second threshold is of 60 days or more in the impugned financial year, for which assessee has stayed for more than 141 days in India. Therefore it also crosses the second threshold for satisfaction of section 6 (1) (c) of the Act. 75. However the assessee submits that he has gone outside India for employment, he should be treated as person 'being outside India' and therefore the time limit of second limb of section 6 (1) (c) should be considered of 182 days instead of 60 days by invoking Explanation 1 (b) of the Act. The claim of the revenue is that clause applies only in case of the person who are already ' non-resident' and not to the assessee who was a resident in immediately preceding year. 76. Explanation 1(b) to section 6(1)(c) provides for a concession for Indian citizens or persons of Indian origin who, being outside India, come on a visit to India in any previous year. In such cases, the prescribed period of 60 days in India to be considered a resident under clause (1)(c) is relaxed to 182 days. The objective behind this Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 152 of 189 relaxation is to enable non-resident Indians who have made investments in India and who find it necessary to visit India frequently and stay here for the proper supervision and control of their investments to retain their status as non-resident. 77. CIRCULAR NO. 684, DATED 10-06-1994 provides that:- FINANCE ACT, 1994 Extending the period of stay in India in the case of non-resident Indians without their losing the non-resident status 19. Under the provisions of clause (1) of section 6 of the Income-tax Act, an individual is said to be resident in India in any previous year, if he has been in India during that year,— (i) for a period or periods amounting to one hundred and eighty-two days or more, or (ii) for a period or periods amounting to sixty days or more and has also been in India within the preceding four years for a period or periods amounting to three hundred and sixty-five days or more. However, the period of sixty days was increased to one hundred and fifty days in the case of a non-resident Indian, i.e., a citizen of India or a person of Indian origin within the meaning of the Explanation to clause (e) of section 115C of the Act, who, being outside India, comes on a visit to India. The said Explanation provides that a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grandparents, was born in undivided India.\" 78. Honourable Bombay High court has considered this aspect whether clause (b) to Explanation [1] will apply to whom in Principal Commissioner of Income-tax vs. Binod Kumar Singh [2019] 107 taxmann.com 27 (Bombay)/[2019] 264 Taxman 335 (Bombay)/[2020] 423 ITR 175 (Bombay)[22-04-2019] 5. In plain terms, by virtue of Section 6(1) of the Act, an individual would be said to be a resident in India if he satisfies the requirement contained in clause (a) or clause (c). Requirement of clause (a) is that Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 153 of 189 the person should have been in India during the relevant previous year for a period not less than 182 days. Clause (c) would require that he was within the country for not less than 365 days in four preceding years and has been in India for 60 days or more in the current year. This requirement of 60 days would be substituted by 182 days if he is an Indian citizen or a person of Indian origin and has come on a visit to India. 6. In the background of such provision, the Tribunal on material on record came to factual finding that the assessee was in India during the previous year relevant to the assessment year in question for 173 days. This factual finding is unassailable. In that view of the matter, clause (a) of Section 6(1) would not apply. It is true that in absence of clause (b) of Explanation 1 below Section 6(1) of the Act, the assessee would have fulfilled the requirements of clause (c) of Section 6(1). However, as per the explanation, if the assessee comes to a visit in India, the requirement of stay in India in the previous year would be 182 days and not 60 days as contained in clause (c). It is, in this respect, the Tribunal had taken a note of relevant facts more minutely. Such facts were that the assessee who was born in India in the year 1960, after completing his higher education went to Soviet Union for further education in engineering. From 1978 to 1984, he persuaded his Masters in Engineering in Radio Technology. He also did post-graduation in Russian language. From 1984 to 1986, he had worked in trading pharma company in USSR. From the year 1986-1987, he did his business management from Sweden. He again worked in a trading pharma company. Between 1989 to 1995, he had worked in Ukraine after which he set up his own business in pharmaceutical sector primarily in Russia, Ukraine and CIS countries for which purpose he had set up a trading house at Ukraine. He had acquired immovable property in Ukraine in 1995 and 1997. The assessee had permanent resident status in Ukraine till 2002. After that along with his family, he shifted to England but continued his business interest in Ukraine, Russia and CIS Countries. The assessee had acquired properties in Ukraine but continued his business interest as earlier. 7. These facts would demonstrate that the assessee had migrated to a foreign country where he had set up his business interest. He pursued his higher education abroad, engaged himself in various business activities and continued to live there with his family. His whatever travels to India, would be in the nature of visits, unless contrary Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 154 of 189 brought on record. We do not find that the Tribunal, therefore, committed any error.\" 79. In Additional Director of Income-tax vs. Sudhir Choudhrie [2017] 88 taxmann.com 570 (Delhi - Trib.)/[2017] 55 ITR(T) 681 (Delhi - Trib.)[06-03-2017] it is held that - 4. Refuting the above arguments, the learned authorised representative placed support on the reasoning given by the learned Commissioner of Income-tax (Appeals) in the impugned order. It was further submitted by the learned authorised representative that during the course of assessment, a detailed factual note was submitted by the assessee substantiating his claim of \"being outside India\". It was submitted by the learned authorised representative that post his medical treatment, the assessee had decided to relocate his entire family outside India in the year 2000 and since then they have been staying in the UAE and the UK on a residency visa/highly skilled visa. The learned authorised representative also filed before us copies of assessment orders passed by the Income-tax Department in case of the assessee for earlier assessment years wherein the tax residency status of the assessee has been assessed as that of a \"non-resident\". It was further submitted by the learned authorised representative that the omission of clause (b) to section 6(1) by the Finance Act, 1982 with effect from April 1, 1983 and the legislative intention of amendments made to section 6 by the Finance Act, 1990 (reported in CBDT Circular No. 55 dated 13th February 1990) and by the Finance Act, 1994 (reported in CBDT Circular No. 684 dated June 10, 1994 ([1994] 208 ITR (St.) 8)) clearly negates the suppositions of the Assessing Officer taking economic/legal relationship of an assessee with India as a relevant criteria for determination of his tax residency status. The learned authorised representative submitted that Explanation 1 to section 6(1) has two limbs. It was submitted that requirement of \"being outside India\" as per Explanation (b) has to be seen in light with the intention of leaving India which as per clause (a) of Explanation 1 would be \"employment\" outside India. It was submitted that the courts have unanimously held that \"employment\" in clause (a) of Explanation 1 also includes \"self-employment\". It was submitted that in the year of leaving India for \"employment\" or \"self-employment\" clause (a) would be applicable and for subsequent years clause (b) would be applicable. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 155 of 189 It was submitted that in the instant case condition of clause (a) got satisfied when the assessee decided to relocate his family outside India and took self-employment there. It was submitted that the Department has been accepting that the assessee was \"being outside India\" and the residency status of the assessee has been assessed as that of a \"non- resident\" by the Assessing Officer in the assessment years 2003-04 and 2004-05. The learned authorised representative also relied upon the decision of co-ordinate Bench of the Income-tax Appellate Tribunal in the case of Suresh Nanda v. Asstt. CIT [2012] 23 taxmann.com 386/53 SOT 322 (Delhi) in support of his submission that the sole relevant test for determination of residency status is the number of days criteria. It was submitted by the learned authorised representative that this decision had been upheld by the jurisdictional High Court in CIT v. Suresh Nanda [2013] 35 taxmann.com 199/216 Taxman 185/352 ITR 611 (Delhi). The learned authorised representative also relied upon the decision of co-ordinate Bench in the case of K. Sambasiva Rao v. ITO [2014] 42 taxmann.com 115/62 SOT 167(Hyd. - Trib.). About the decisions relied upon by the learned Commissioner of Income-tax (Departmental representative) it was submitted that these cases were distinguishable on facts and per contrary support the case of the assessee. 5. In rejoinder, the learned Commissioner of Income-tax (Departmental representative) submitted that the decision of Suresh Nanda (supra) is factually distinguishable. As regards the status of the assessee being assessed as a \"non-resident\" in earlier years by the Tax Department it was submitted by the learned Commissioner of Income-tax (Departmental representative) that the principles of res judicata are not applicable to Income-tax proceedings. 6. We have carefully considered the rival submissions and have also perused the material available on record. Since we are called upon to determine the tax residency status of the above assessees, it would be relevant, first, to note the provisions of section 6, which are as under : \"6. For the purposes of this Act,— (1) An individual is said to be resident in India in any previous year, if he— (a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more ; or . . . Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 156 of 189 (c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty five days or more, is in India for a period or periods amounting in all to sixty days or more in that year. Explanation.-In the case of an individual,— (a) being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words 'sixty days', occurring therein, the words 'one hundred and eighty-two days' had been substituted ; (b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub- clause (c) shall apply in relation to that year as if for the words 'sixty days', occurring therein, the words 'one hundred and eighty- two days' had been substituted.\" 6.1 The learned Commissioner of Income-tax (Departmental representative) has vehemently supported the case of Department in which while determining the residential status, much weightage has been given to economic and legal relationship of an assessee with India. We do not find any merit in this contention. Provisions of section 6 earlier provided that an individual would be a resident of India if he maintained for himself a dwelling place in India. These provisions have undergone several amendments and the legislative intention is in fact encouraging \"non-residents\" to maintain investments in India and still not losing the status of a \"non-resident\". In this regard it would first be Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 157 of 189 relevant to note the provisions under the 1922 Act which were in section 4A and provided for as under : \"4A. Residence in the taxable territories.-For the purpose of this Act— (a) any individual is resident in the taxable territories in any year if he— (i) is in the taxable territories in that year for a period amounting in all to one hundred and eighty-two days or more ; or (ii) maintains or has maintained for him a dwelling place in the taxable territories for a period or periods amounting in all to one hundred and eighty-two days or more in that year, and is in the taxable territories for any time in that year ; or (iii) having within the four years preceding that year been in the taxable territories for a period of, or for periods amounting in all to three hundred and sixty-five days or more is in the taxable territories for any time in that year otherwise than on an occasional or casual visit ; or (iv) is in the taxable territories for any time in that year and the Income-tax Officer (now Assessing Officer) is satisfied that such individual having arrived in the taxable territories during that year is likely to remain in the taxable territories for not less than three years from the date of his arrival ;\" Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 158 of 189 6.2 Criteria of judging residential status on basis of a dwelling house in India was also retained in 1961 Act. In this regard clause (b) of section 6(1) provided for as under : \"(b) maintains or causes to be maintained for him a dwelling place in India for a period or periods amounting in all to one hundred and eighty-two days or more in that year and has been in India for thirty days or more in that year ; or\" 6.3 However, thereafter, the Finance Act, 1982 omitted clause (b) of section 6(1) and the legislative intention is stated by Board Circular No. 346 dated June 30, 1982 reported in [1982] 138 ITR (St.) 10, 15 as under : \"Relaxation of tests of 'residence' in India—Section 6\" 7.1 Under the existing provisions, an individual is said to be 'resident' in India in any year, if- (a) he is in India in that year for a period or periods amounting in all to 182 days or more ; or (b) he maintains or causes to be maintained for him a dwelling place in India for a period or periods amounting in all to 182 days or more in that year and has been in India for 30 days or more in that year ; or (c) Having within the four years preceding that year been in India for a period or periods amounting in all to 365 days or more, is in India for a period or periods amounting in all to 60 days or more in that year. 7.2 In the case of an Indian citizen who is rendering service outside India, and who is on leave or vacation in India, the period of 30 days and 60 days referred to in (b) and (c) above is taken as 90 days. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 159 of 189 7.3 With a view to avoiding hardship in the case of Indian citizens, who are employed or engaged in other avocations outside India, the Finance Act has made the following modifications in the tests of residence in India :— (i) The provision relating to maintenance of a dwelling place coupled with stay in India of 30 days or more referred to in (b) above has been omitted. (ii) In the case of Indian citizens who come on a visit to India, the period of '60 days or more' referred to in (c) above will be raised to '90 days or more'. (iii) Where an individual who is a citizen of India leaves India in any year for the purposes of employment outside India, he will not be treated as resident in India in that year unless he has been in India in that year for 182 days or more. The effect of this amendment will be that the test of residence in (c) above will stand modified to that extent in such cases.\" 7.4 Further relaxation in law came by the Finance Act, 1990 and the Finance Act, 1994 where in the period of 90 days was increased to 150 days and then from 150 days to 182 days. The legislative intention behind this is provided for by CBDT Circular No. 684 dated June 10, 1994 reported in [1994] 208 ITR (St.) 8, 21 as under : \"Extending the period of stay in India in the case of non-resident Indians without their losing the non-resident status 19. Under the provisions of clause (1) of section 6 of the Income-tax Act, an individual is said to be resident in India in any previous year, if he has been in India during that year,— Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 160 of 189 (i) For a period or periods amounting to one hundred and eighty-two days or more, or (ii) For a period or periods amounting to sixty days or more and has also been in India within the preceding four years for a period or periods amounting to three hundred and sixty-five days or more. However, the period of sixty days was increased to one hundred and fifty days in the case of a non-resident Indian, i.e., a citizen of India or a person of Indian origin within the meaning of the Explanation to clause (e) of section 115C of the Act, who, being outside India, comes on a visit to India. The said Explanation provides that a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grandparents, was born in undivided India. 19.2 Suggestions had been received to the effect that the aforesaid period of one hundred and fifty days should be increased to one hundred and eighty-two days. This is because the non-resident Indians who have made investments in India, find it necessary to visit India frequently and stay here for the proper supervision and control of their investments. The Finance Act therefore, has amended clause (b) of the Explanation to section 6(1)(c) of the Income-tax Act, in order to extend the period of stay in India in the case of the aforesaid individuals from one hundred and fifty days to one hundred and eighty-two days, for being treated as resident in India, in the previous year in which they visit India. Thus, such non-resident Indians would not lose their 'non- resident' status if their stay in India, during their visits, is up to one hundred and eighty-one days in a previous year.\" 7.5 The above changes in law clearly support the case of assessee. The statute has provided repetitive relaxations to non-residents of the Indian origin by providing them relaxation for stay in India for proper control and supervision of their investments and still not losing the status of \"non-resident\". Under the circumstances it is difficult to appreciate the arguments of the learned Commissioner of Income-tax (Departmental representative) as noted above. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 161 of 189 80. Thus in the above case also the coordinate bench has interpreted the word 'being outside India' for non-residents only as assessee was residing abroad and came to India claiming extension of time line from 60 days to 182 days. 81. Subsequent amendment in clause (b) of Explanation 1 also shows that it is enacted to counter instances where individuals who actually carry out substantial economic activities from India manage their period of stay in India to remain a non-resident in perpetuity and not be required to declare their global income in India. The amendment restricts the relaxation in clause (b) in Explanation 1. This, it is not obviating the difficulty of ' Non-resident' but restrictions to their non- residential status. This also shows that clause (b) of Explanation [1] applies only to non-residents. 82. Thus , we hold that ld AO and Ld DRP has correctly held that period of stay cannot be extended to 182 days instead of 60 days for deciding the residential status of the assessee as per second limb of section 6 (1) (c) of the Act by virtue of Explanation 1 (b) of the Act. 83. Coming to the second argument that clause [a] of Explanation [1] applies, we find that Explanation 1(a) provides for substituting the period of stay in India for 60 days in section 6(1)(c) by 182 days if the assessee, being a citizen of India, leaves India in any previous year as a member of the crew of an Indian ship or for the purposes of employment outside India. The relaxation in Explanation 1(a) applies to the previous year in which the assessee, being a citizen of India, Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 162 of 189 leaves India. The facts clearly shows that assessee left India in FY 2018-19 , on February 2019 for employment with X to 10 X Pte Limited. Therefore as the assessee has not left India in this financial year i.e. FY 2019-20, this clause as such does not apply for the impugned Assessment year. 84. Argument of the assessee that either the clause (a) or Clause (b) should apply to the assessee is fallacious for the reason that assessee has not left India in FY 2019-20 but in FY 18-19 so clause (a) does not apply for this year and further as already held by us that clause (b) applies only to non-residents and not person like assessee who is a resident. 85. Assessee has also argued that as assessee has resigned from X to 10 X PTE limited and then went to Singapore for employment with Three State capital Advisors PTE Limited in F Y 2019-20; he should get the benefit of the extended periods as per clause (a) of Explanation [1]. Reason being that he is a citizen of India, leaving India for the Purposes of employment with Three State capital Advisory PTE Ltd. We find that this argument is contrary to the other stand of the assessee. Clause (a) applies when a citizen of India leaves the country for the purposes of employment outside India. In fact, the assessee was already employed in Singapore when he visited India. He resigned from India from his employment with X to 10 X PTE Limited and then once again sought an employment with Three State capital Advisory PTE Limited. Thus when he came to India from Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 163 of 189 Singapore, he was already employed by X to 10 X PTE Limited. We also record the fact that assessee was employed with Flipkart private Limited and he resigned from that service on 13th November, 2018 [page No 196 of the paper book]. On 17/2/2019 , he entered in to employment contract with BTB Consulting Private limited [ page no 197 of the paper book] , on 10/4/2019 , Director of X to 10 X Technologies PTE ltd confirms that assessee is working with them as Chief Executive Officer [ page no 201 of paper book. Thus assessee left India for the purposes of employment as Chief Executive officer of X to X Technologies PTe Limited on 22/09/2019.[ Para no 7.6 of the paper book page no 379] Thus , he left India for employment in F Y 2018-19 and not in FY 2019-20. Thus, his claim would be proper if the AY involved is 2019-20 as he left India for the purposes of employment in that AY. However , the facts further goes in para no 7.8 of his submission [ page no 379 of the paper book] , assessee submits that :- \" 7.8 The assessee spouse and children also moved to Singapore in March 2019. The assessee submits that he continues to reside in Singapore with his family till date. The assessee's children attend school in Singapore. The assessee spouse has been in employment in Singapore. The assessee and his spouse of applied for and granted permanent resident status in Singapore. 7.9 The assessee submits that he has been residing in Singapore since February 2019 till date. He only comes on brief visits to India for business and personal purposes.\" 86. Above submission made by the assessee itself shows that he is not a person who is leaving India for employment but he is residing in Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 164 of 189 Singapore, comes on brief visit to India. If the stand of the assessee is accepted that for this assessment year [ AY 2020-21 ] also the assessee should get a benefit of extended time period of 182 days instead of 60 days as per the second limb of section 6 (1) ( c ) of the Act than every person who visits India will get such an extension of period every year. The provision applies only to the person who are leaving India and not visiting India. That is neither the intention nor the spirit of the provisions. Therefore he does not qualify even for the relaxation provided under Explanation 1 (a) of section 6 (1) (c) of the Act. 87. It is not in dispute between the parties and both have confirmed that it is well settled that in construing fiscal statutes the principle of literal construction is paramount. Nothing can be read into or implied beyond the plain meaning of the words used. We also agree with the above submission of both the parties and we have construed the provisions of section 6 for the purpose of deciding the residential status of the assessee giving literal construction to the provisions. We accept the attempt of neither the revenue or assessee to read something more what has been legislated. 88. Therefore, on the basis of the above submission and findings of the fact we hold that assessee has been in India for more than 60 days and satisfied the residential test of provisions of section 6 (1) (c) of the Act and is not entitled to the relaxation in the period of stay as envisaged under clause (a) or (b) to Explanation 1. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 165 of 189 89. Accordingly we dismiss ground No. 2 – 4 of the appeal of the assessee. 90. Ground No. 5 is with respect to the argument of the assessee that he satisfies the criteria to be considered as a resident of Singapore as per Article 4 of the India Singapore Double Taxation Avoidance Agreement which has not been appreciated by the learned dispute resolution panel and the learned assessing officer who erroneously held that assessee is a resident of India even on application of Article 4 of The Double Taxation Avoidance Agreement. 91. According to the provisions of Article 4 (2) where the individual is a resident of both the States i.e. India and Singapore, then, his title shall be determined as follows:- (a) he shall be deemed to be a resident of the state and which he has a permanent home available to him, if he has a permanent home available to him in both states, he shall be deemed to be a resident of the state with which his personal and economic relations are closer (centre of vital interest), (b) if the state in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either state, he shall be deemed to be a resident of the state in which he has an habitual abode (c) if he has an habitual abode in both states or in neither of them, he shall be deemed to be a resident of the state of which he is a national (d) if he is a national of both states or of neither of them, the competent authorities of the contracting State shall settle the question by mutual agreement. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 166 of 189 92. With respect to the permanent home it is submitted by the assessee that assessee has migrated to Singapore in February 2019,. Upon moving to Singapore, the assessee initially occupied the apartment at No. 2, Kim Sang walk, great word serviced apartments, #32 – 08, Singapore from 26 February 2019 till 26 July 2019. The assessee has the right to occupy the above said premises continuously during this period. Thereafter the assessee to content his residence at #9 Nathan Road,#06-01 Regency Park Singapore for which the assessee has a rental agreement for a period of 2 years starting from 15 July 2019 to 14 July 2021. Thus, though rented, but assessee has a permanent home as he possesses that house is a home. It is rental agreements are also for the period of 2 years and therefore he has also a permanent home in Singapore. 93. With respect to the permanent home available to him in India, the assessee has commenced construction of a house at 411, 11th Main Road, 2nd cross, third block, Koramanagala , Bangalore 34 prior to considering migration to Singapore. The construction of the house has been proceeding slowly due to a No. of reasons. The house remains under the construction even as on the date and it is not in a habitable condition. In this regard, the assessee has submitted the status report also of a project management consultant which shows that the premises were under construction and on inhabitable. The contention of the assessee is that as the house is under construction, it cannot be said to be a permanent home of the assessee since there is no possibility for the assessee to stay there. Thus the claim of the Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 167 of 189 assessee is that he did not own or have on rent any habitable premises in India during the previous year 2019 – 20. 94. Contrary to that the claim of the revenue is that that assessee has a residential property in Kormangala Bengaluru valued at approximately ₹ 36.75 crores land valued at approximately Rs. 1 crore and an apartment in Mantri classic, Bengaluru valued at approximately Rs. 2.75 crores. It is the claim of the revenue that for the about test, ownership and availability of residential property is sufficient to constitute a permanent home, physical occupation or completion of revenue is not a precondition. It is further stated that mere fact that one of the properties was under construction or undergoing renovation does not negate the fact that the appellant owned and retained residential accommodation in India throughout the relevant period. Compared to this, in Singapore the assessee has only a rented accommodation in a service apartment. It is very temporary, transient and not indicative of settled long term residents. It is also the claim of the revenue that when the assessee is coming to India, despite specific query by the bench, regarding his Indian presents and accommodation, the assessee has remained relatively silent and has not furnished full particulars regarding the stay and use of residence in India which further weakens the claim of the assessee. We also find that even in the rebuttal filed by the assessee by way of written submission on 31 October 2025, the assessee did not rebut the claim of the learned that ASG mentioned in paragraph No. 43.4 of his submission. The revenue is also contesting that the assessee himself as Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 168 of 189 a claim deduction under section 54F of the Act which is available only in case of a purchase or construction of residential house. Therefore now the stand of the assessee is contradictory that his house is not habitable at all. 95. On careful consideration we find that the assessee has a residential apartment on rent in Singapore and further the assessee has owned property at C- 703, Mantri Classic apartment, Kormanagala Bangalore and further house at Kormangala, Bangalore. At paragraph No. 34 of the assessment order, the assessee was asked by the learned assessing officer that the assessee decided in India for more than 141 days in India, despite the questionnaire, the assessee has not provided the details of his accommodation in India for nearly 39% of the year. Even before us no such details were furnished. The learned assessing officer at paragraph No. 35 of the assessment order has also raised at a categorical very that the permanent residence of the assessee was in India for the financial year 2019 – 20. One more clinching point for the issue of permanent residence is that during the Covid pandemic, which was the most difficult times, any person would prefer to stay in place of permanent residence and at a place where he manages his or her affairs better and with their loved ones. It is seen that for 38 days spent the pandemic raged during the relevant financial year, the assessee was in India. Coupled with the fact that assessee did not give any information about his stay during 141 days which also included Covid period. The assessee's Home at Kormangala is stated to be at the cost of Rs 39 crores. Thus, it is apparent that assessee has Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 169 of 189 permanent home available in both the states. The distinction cannot be made with respect to more permanence such as own house property in India compared to a rented premises. Thus assessee shall be deemed to be a resident of the state of India and Singapore both in view of permanent home available to him at both the places. 96. With respect to the centre of vital interest, it was the submission of the assessee that his personal and economic relations are closer to Singapore than India. Assessee submits that assessee does not have any independent family members in India, assessee's nuclear family consisting of his powers and his two children are residing in Singapore along with the assessee for the whole of the financial year 2019 – 20. The assessee's family has continued to reside with him in Singapore till date and therefore the assessee's personal relations are closer to Singapore than India. It was also the claim of the assessee that assessee does not have any independent family members in India and the assessee's parents are independent are residing in Punjab. They are not living with him and assessee when he was in India, assessee used to visit them only occasionally. The children of the assessee are also enrolled for schools in Singapore and the spouse of the assessee is also employed in Singapore. Thus the assessee's personal relations are close to Singapore. The assessee has its principal bank accounts and credit cards in Singapore and his visit to India were very short and principally for business purposes. The assessee is employed in Singapore since February 2019 and also Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 170 of 189 administers his investments from Singapore therefore his economic relations are also based in Singapore. 97. Compared to this the claim of the revenue is that assessee's own residence lies in India, he did not have much immovable assets in Singapore. The learned assessing officer extracted the assets and liability statement of the assessee for financial year 2019 – 20 and stated that assessee has movable properties in the form of vehicles et cetera and bank deposits et cetera of ₹ 2,00,00,003 crores. Shares and securities owned by the assessee is ₹ 290 crores and loans and advances our ₹ 256 crores. It was further stated that on the sale of shares of record private limited, Singapore the assessee has earned huge capital gain which is derived from the underlying assets in an Indian entity such as Phillip Carter India Ltd. Therefore the majority of the economic interest of the assessee lies in India. The assessing officer further referred to the webpage for extra tax website and stated that its location is also in Bangalore at page No. 59 of the assessment order and further on the basis of the screenshot in paragraph No. 37, the learned assessing officer has held that the company is working on Indian start-up ecosystem, its clients and customers are in India, the organisation mostly comprises of Indians and the office addresses also in Bangalore. There is no mention of any Singapore clients are operation. Thus the so-called employment of the assessee from Singapore is also for India-based operation. The learned assessing officer further invoked the concept of \"substance over form\" and stated that the assessee's family ties, provisions, education, Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 171 of 189 investments, fixed assets, business ventures are all connected to India. It was further stated that assessee has only derived salary income from his employer. Further at paragraph No. 38 the learned assessing officer tabulated the source of income in India as well as in Singapore and find that except salary in Singapore there is nothing that assessee owns from that country. Therefore the centre of vital interest of the assessee lies in India and not in Singapore. The ld AO further Extracted Para no. 15 OECD Commentary on Article 4 concerning the definition of residence in para no 40 of his order. In written submission, the ld ASG further stated that the assessee's business and economic interest continued to be significantly India Centric. He further submits that test of Vital interest should be as it existed during the relevant previous year and subsequent acts does not have any relevance. He submits that appellant's own narrative makes it evident that so called \" Permanent Shift' to Singapore was a gradual post facto process and did not crystallise at the start of the year. 98. While hearing the matter we have asked for the details of investments of the assessee in India as well as Singapore. Same were furnished by the assessee. The assessee submits that the economic interest should be assessed based on substantive commercial engagement rather than passive investments. Most of the assessee's investments in India were made in prior years when the appellant was a resident of India. Investments made in India prior to the appellant's migration to Singapore do not have any bearing on his centre of economic interest as such. Assessee also pressed into service the fact that individuals Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 172 of 189 who have become non-resident face restrictions under the Foreign Exchange Management Act 1999 in repatriating overseas funds and investments made in India when they were resident. Thus the investments made in India are not by any means an indicator of the centre of economic relations since there was a regulatory restrictions on repatriation of funds outside India for the purposes of overseas investments. The assessee also submitted that majority of the investments made in India by the assessee are passive portfolio investments such as investment in alternative investment funds, mutual funds, portfolio investments in start-ups et cetera. The assessee submitted that total amount of investment made in India as on 31st of March 2020 is ₹ 73,792 lakhs out of which ₹ 60,035 lakhs was invested in earlier years while the assessee was a resident of India. Thus it was the contention that investments made in India prior to the assessee's migration to Singapore do not have any bearing on his centre of economic interest as such. Further out of the additional investments made in India amounting to ₹ 19, 125 lakhs, ₹ 5000 lakhs represents follow-on investments are arising from previously committed capital in earlier years. With respect to the investment made in non-Indian assets it was submitted that as on 31st of March 2020 investment made outside India is ₹ 87,789 lakhs , out of which 86,846 lakhs was invested post-migration by the assessee to Singapore. This clearly indicates that the economic interest of the assessee shifted to Singapore during financial year 2019 – 20. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 173 of 189 99. We have carefully considered the rival contentions. In Ashok Kumar Pandey vs. ACIT [2024] 167 taxmann.com 286 (Mumbai - Trib.)/[2024] 209 ITD 274 (Mumbai - Trib.)[03-10-2024] it is held that according to Article 4 (2) (a) of the Double Taxation Avoidance Agreement, an individual is resident of the state in which he has centre of vital interest being where his personal and economic relations are closer. This test is required to be applied for the assessment year for which tax liability of an assessee is to be arrived at. Determination of centre of vital interest is a highly factual analysis which may not be applicable to any other individual or which has been decided by the courts in case of other individuals. Thus, this criterion is a vexed issue for everyone. The facts need to be analyzed looking at personal relationship as well as economic relationship and both must be considered together to determine the centre of vital interest of an individual close to a particular state. Only the fact with some impact needs to be considered such as for determination of personal relationship, connect with the nucleus family is more important, then extended family. Similarly, for determination of economic relationship, more credential be given to active involvement in the commercial activities then passive investments. Generally, investments in securities, mutual funds, banks move not necessarily with residence of the assessee but on the basis of rate of return in particular state. For determination of economic relationship, place of business, place of Administration of property and place of earning wages (remuneration) (profit) is of importance. Ambiguous factors, Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 174 of 189 needs to be avoided. In this background and on the basis of the facts stated above, we proceed to decide the issue involved. 100. We find that so far as personal relations of the assessee are concerned, the assessee's family has travelled with him though gradually to Singapore. His wife has taken employment and children have also started schooling there. So far as the investments are concerned the assessee has immovable properties in India of approximately Rs. 40 crores, bank account holding of ₹ 7.29 crores, shares and securities of Rs. 65, 967 lakhs, and the loans and advances of ₹ 30 crores. The summary of investment outside India shows that the bank balances as on 31st of March 2020 is ₹ 12,084 lakhs, investment in shares and securities of ₹ 74, 100 lakhs and loans and advances of ₹ 16 crores. The total investment outside India is ₹ 87,789 lakhs. Out of the above the investment made during the financial year 2019 – 20 is $ 1,14, 659,000. Prior to this, there was a minuscule investment by the assessee outside India. Thus it is apparent that most of the investments are made by the assessee outside India during financial year 2019 – 20. The claim of the assessee is that the centre of vital interest must be seen after the assessee migrated outside India and the claim of the revenue is that it should not be seen at that point of time but throughout the year. We find that the test is to examine the residential status of the assessee for the assessment year, therefore it is material that such centre of vital interest remains throughout the assessment year and not at the end of the assessment year only. This is also for the reason that all the test envisaged under Article 4 (2) refers to for Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 175 of 189 the situation of the whole year. Therefore we reject the argument of the learned authorised representative that centre of vital interest must be seen after the assessee shifted to Singapore. 101. Now we proceed to see the fact that all the investments made by the assessee outside India were made during the relevant financial year. Therefore at the beginning of the assessment year, there was hardly any investment made by the assessee outside India. The substantial investments are in case of bank accounts and investment in shares of unlisted companies outside India. It is also true that the assessee holds US$ 15,477[000] two family trust. Out of which the major investment is of ₹ 528 crores in one company Grey Orange Pte Ltd through family trust in Singapore, Where the assessee and his spouse are the beneficiaries. 102. However it is the fact that assessee has provided the data of 'investments in India' and 'investment outside India', where the bench has categorically asked about the data of ' investment in India' and ' Investment in Singapore'. Assessee has constantly provided data of different nature and it seems he avoided providing the specific data of ' investment in Singapore'. For the sake of assumption, we have considered the data of investments outside India as Investment in Singapore. 103. Thus, if the individual has a permanent home in both the contracting States, the issue of examining his centre of vital interest arises meaning thereby that it is to be ascertained with which of the two Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 176 of 189 states his personal and economic relations are closer. One must have a regard to his family and social relationships, his occupation, his political, cultural or other activities, his place of business and the place from which he administers his property. The circumstances must be examined as a whole. It is further attest that if a person who is a home in one state sets up a second in the other state while retaining the first, the fact that he retains the first in the environment very has always lived, where he has always worked and where he has his family and possessions, can, together with other elements go to demonstrate that he has retained his centre of vital interest in the first state. In the present circumstances, the assessee has made investment only after he has shifted to Singapore. Still his major investment, his house properties are situated in India. His family has also migrated with him over a period of time. The wide variety of investments that he has made while in India such as alternative investment funds, unlisted companies equity shares, listed equity shares and mutual funds do not exist in Singapore. In Singapore the assessee has made investment in shares of unlisted companies and further held substantial assets through family trust where assessee and his wife are the major beneficiaries. Further the assessee's major capital commitments of investments are also in India. Assessee has also provided loans to the tune of Rs. 30 crores to various entities in India. Assessee does not own any immovable property outside India. Therefore it is apparent that assessee has retained his houses in India where he has decided throughout his life, where he is carried out his Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 177 of 189 business and in assessee's own words he is one of the most successful entrepreneurs through start-ups. It is to be appreciated that assessee moved with his family and his family also shifted to Singapore. But even his family does not have any home in Singapore, therefore, looking at his major economic interest, it is apparent that it is more closer in India than Singapore or anywhere else [ as no details provided about Investment in Singapore only] 104. With respect to the habitual abode, it is apparent that he stayed in India for 141 days in India and balance days in other countries. This is the first year that assessee went out of India for employment purposes. But he kept on visiting India for almost 141 days. Thus, for most part of his life, he was in India, he is having house in India. Thus the assessee worked only for the part of the year in Singapore and also lived in India for part of the year. Thus, In that case, the assessee will have an habitual abode in both India and Singapore. 105. Undisputedly, assessee is an Indian national. 106. In view of the above facts we hold that according to the Tiebreaker test also the assessee is a resident of India. Accordingly we uphold the order of the learned assessing officer and dismiss ground No. 5 of the appeal. 107. We would like to clear that while deciding Ground no 2 to 5 of the above appeal we have considered the facts stated by assessee and ld lower authorities. Therefore, the arguments of the parties about the ld Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 178 of 189 ASG improving the grounds of the revenue is not at all required to be considered. Even otherwise we are of the view that he has merely supported the findings of the ld Lower authorities and referred to the documents submitted by the assessee along with information in public domain. The ld AR has vehemently relied up on the decision of Assistant Commissioner of Income-tax, Circle 16(1), Mumbai vs. Prakash L. Shah [2008] 115 ITD 167 (Mumbai) (SB)/[2008] 118 TTJ 577 (Mumbai) (SB)[22-08-2008] to support the above argument relying on para no 12 of the Judgement. In this para it held that:- \"12. The contention raised by the ld. DR that such foreign exchange difference be treated as 'Income from other sources' and, hence, no deduction be allowed is sans merits for more than one reason. Firstly, the Assessing Officer has not disturbed the nature of foreign exchange gain as part of 'export turnover' as claimed by the assessee. He has nowhere held that it be treated as 'Income from other sources' on that 90 per cent of the same warrants deduction from the profits of the business as per Explanation ( baa) below sub-section (4C) to section 80HHC. His area of dispute is that since the amount has been realized in the subsequent year, hence, the deduction cannot be allowed. In our opinion the ld. DR cannot go beyond the assessment order and bring an altogether different case, thereby undoing what has been done by the Assessing Officer. The power to modify the assessment order to the advantage of the Revenue, apart from suo motu action by the Assessing Officer under sections 147 or 154, lies only with CIT under section 263, which cannot be usurped by the ld. DR while arguing the Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 179 of 189 appeal. The scope of the arguments of the ld. DR is restricted to support the view taken by the Assessing Officer. He can strengthen the view taken by the Assessing Officer from any angle, he likes, but cannot bring out an altogether different case de hors the view of the Assessing Officer. His area of arguments is unlimited but within the boundary limit marked by the Assessing Officer. We are equally not persuaded to fall in line with this view on merits also in the light of the discussion made in the foregoing paras.\" 108. The ld ASG has also submitted several judicial precedents and stated that he is not bringing new grounds but only supporting the findings of the AO and his assessment proceedings. He also referred to the decision of the various courts. 109. It is an established concept that the departmental representatives may support and ' improve' the case of the ld AO by advancing additional arguments or by pointing out alternative angles of support, so long as those arguments [1] do not contradict the stand of AO, [2] do not set up altogether anew case or new sources of income that was not the subject matter of assessment and [3] do not require fresh facts or new inquiry beyond the records of the AO, [4] it should run into sphere of section 263 of the Act. 110. In this case we find that no such arguments are advanced by the ld ASG. The issue of GAAR was raised by the ld AO during the assessment proceedings. A query was also raised. But no reference was made. Section 100 of the Act provides that provisions of this Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 180 of 189 Chapter [GAAR] shall apply in addition to, or in lieu of, any other basis for determination of tax liability. So, it is not the case that ld AO should have invoked that power and necessarily refer the matter to the panel. Despite this, while reaching at our conclusion, we have not given any weightage to those arguments. Further the findings of the special bench in Prakash L Shah [ supra] also supports the revenue so far as its arguments are within the parameters discussed above. 111. Ground No. 6 of the appeal is agreed by both the parties has already been decided against the assessee by the decision of the honourable Karnataka High Court in case of Adarsh Developers vs. Deputy Commissioner of Income-tax [2024] 158 taxmann.com 81 (Karnataka)[13-12-2023] wherein the honourable High Court has held that notices issued under section 143(2) by Addl. Commissioner, NaFAC instead of jurisdictional Assessing Officer to assessee under Central Charge were valid. Further, Where assessee, after being served with notice under section 143(2) had filed response and had also filed response to subsequent notices served under section 142(1) and had participated in proceedings culminating into assessment order, it could not challenge jurisdiction of Assessing Officer to pass impugned assessment order. Accordingly, respectfully following the decision of the honourable Karnataka High Court we dismiss ground No. 6 of the appeal. 112. With respect to ground No. 7 of appeal , assessee claims that learned assessing officer has treated the assessee as a 'resident' as per draft Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 181 of 189 assessment order dated 30 September 2022, it is the argument of the assessee that when assessee is a 'resident' assessee, there is no requirement of passing of the draft assessment order u/s 144C (1) of the Act in case of a 'resident' assessee. Therefore, the learned assessing officer passing the draft assessment order on 30 September 2022 and thereafter pursuant to the directions of the learned dispute resolution panel passes the final assessment order on 31 July 2023 is not in accordance with the provisions of the Act. Therefore, the assessment order passed on 31 July 2023 is barred by limitation. Several judicial precedents were relied upon by the learned authorised representative and contested by the learned ASG. 113. On careful consideration of arguments of the parties, we find that assessee filed his return of income for assessment year 2020 – 21 claiming his status as a 'non-resident' of India. This residential status was questioned by the assessing officer during the course of assessment proceedings. On the basis of information available and submission of the assessee, the draft assessment order was passed on 30 September 2022 wherein the assessee was held to be 'resident' of India. The question here is that whether the action of passing of the draft assessment order by the learned assessing officer vitiates the whole assessment proceedings and thereby resulting into the final assessment order passed on 31 July 2023 barred by limitation or not. 114. According to the provisions of section 144C, the learned assessing officer shall, notwithstanding anything to the contrary contained in Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 182 of 189 this Act, in the first instance, forward draft of the proposed order of assessment to the eligible assessee defined under subsection (15) (b) wherein he proposes to make any variation which is prejudicial to the interest of such assessee. The 'eligible assessee' relevant to our consideration is any 'non-resident not being a company or a foreign company'. Therefore, if the eligible assessee is a non-resident individual, the assessing officer should have governed the assessment proceedings by provisions of this section. Here, in the case of the assessee, the assessee filed its return of income undisputedly as a 'non-resident' individual which was considered by the learned assessing officer as a 'resident'. Undoubtedly, the assessee is also contesting his status and constantly claiming that he is a 'non- resident'. But as the assessing officer has treated his residential status as \"resident\", the assessee's claim is that he is not an 'eligible assessee' and therefore the draft assessment order passed in this case is not correct. The assessee has relied upon the decision of the coordinate benches. 115. The first decision relied upon by the learned authorised representative is in case of Shyam Sundar Bhartia versus Deputy Commissioner of income tax (2023) 149 taxmann.com 162 wherein it is been held that in case of an assessee where there is variation prejudicial to the interest of such eligible assessee, then the assessing officer should have passed the draft assessment order. However the definition of the 'eligible assessee' as extracted in paragraph No. 22 of that decision is quite different then the definition of the 'eligible assessee' before us. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 183 of 189 Further in paragraph No. 26 the coordinate bench held that the assessee being an individual, even in case if he were to be held to be a non-resident, his case would not fall within the definition of eligible assessee as prescribed under section 144C (15) of the Act. In that case, further, the assessee has not challenged the change of his residential status as it is apparent by the decision of the coordinate bench in paragraph No. 34. Therefore, the facts of this case are quite distinguishable for the reason that [1] there is a change in definition of eligible assessee before us and as well as [2] here the assessee is contesting that his residential status should be of a non-resident. [3] We further note that in the decision of the coordinate bench there was no adjudication on the specific wording of the provisions of section 144C (1) where the words are 'notwithstanding anything to the contrary contained in this act', 'in the first instance'. [4] Further the coordinate bench, was also not faced with a situation that if, the coordinate bench decision is challenged before the higher forum and assessee is held to be a non-resident, and the assessing officer passed the final assessment order in case of the assessee instead of draft assessment order, then. What would have been the fate of the argument of the assessee that in his case, now as he has been held to be non-resident, failure of passing of the draft assessment order by the AO and in the first instance would result into naturally a bad assessment. 116. The second decision referred to before us is in case of Atos India private limited versus deputy Commissioner of income tax (2023) 152 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 184 of 189 taxmann.com 217 (Mumbai) wherein the coordinate bench in paragraph No. 30 has held that when the order of the transfer pricing Officer is held to be barred by limitation, naturally no variation subsists and therefore it was held that in absence of any variation, the assessee cannot be held to be an 'eligible assessee'. Naturally the case before us is not on the same facts. Even otherwise, if the order of the learned transfer pricing officer, would be held to be in time on further judicial contest, the decision did not give any answer that in such a situation whether the assessing officer should have passed the draft assessment order or final assessment order. It is not the case that the order of the ITAT is final. The question that arises is, suppose if before the honourable higher courts, if the order of the learned transfer pricing officer is found to be passed in time, what will happen to the status of the 'eligible assessee' at that time. Naturally he would be an eligible assessee based on decision of higher judicial forum. Further the coordinate bench also did not consider what is the meaning of 'in the first Instance', therefore, for these reasons the facts in this case cited before us are distinguishable. The learned authorised representative has also referred to several other decisions of the coordinate benches which are related to the transfer pricing adjustment where the order of the learned transfer pricing officer is held to be barred by limitation. Therefore for the similar reasons, those decisions also do not apply to the facts of this case. 117. The decision of the honourable Bombay High Court in case of Aldrin Alberto Araujo Soares V DCIT (2024) 162 taxmann.com 186 Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 185 of 189 (Bombay) was also heavily relied upon by the learned authorised representative stating that in that case it has been held that if in case of an assessee held to be a resident of India, passing of the draft assessment order would not be valid. Therefore, according to the assessee this covers the issue in favour of the assessee. 118. To correctly appreciate the contentions of the parties, it is better to look into the facts of that case. The facts clearly show that originally the assessee filed return of income where he claimed himself to be resident in India. Subsequently after three days, he filed a revised return claiming his status to be of non-resident. The learned assessing officer passed a draft assessment order holding him to be resident of India. Assessee challenged the draft assessment order. If the assessee were held to be a non-resident, he was to claim a refund of ₹ 6,269,263/-. The learned assessing officer at the time of passing of the draft assessment order observed that since the petitioner, in his revised return, had claimed that he was a non-resident, the draft order under section 144C was being issued to him. Subsequently, the assessee despite filing the revised return in the status of non-resident, accepted his position that he is a resident in India. Paragraph No. 19 of the above decision squarely says that that the claim of the assessee as a non-resident in a revised return was incorrect, as accepted by the assessee. On reading of paragraph No. 24 of that decision, the honourable court, did not go into the above controversy that whether the assessee is a resident or a non-resident. In paragraph No. 25 in the first line itself it is stated that the honourable High Court cannot go Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 186 of 189 into the above controversy. Thereafter, the honourable High Court in paragraph No. 25 and 26 has considered the whole issue and directed the learned assessing officer to pass a fresh assessment order in accordance with the law protecting the issue of limitation. This is so because the assessee has abandoned its claim before the honourable High Court about his residential status. 119. Thus the facts of the above case are different then the facts of the case before us. The learned authorised representative has vehemently argued that assessee is a non-resident Indian. The learned AO on the basis of the legal interpretations of the provisions of section 6 has held that assessee is a resident of India. This issue is challenged by the assessee before the learned dispute resolution panel. The learned dispute resolution panel also agreed with the opinion of the learned AO. Based on that the final order of assessment was passed. This final assessment order is also challenged before us so far as the issue of residential status of the assessee is concerned. While disposing the earlier grounds of this appeal, we have already held that action of the learned assessing officer is correct in treating assessee as resident of India. We also note that the provisions of section 144C (1) refers to passing of a draft assessment order 'in the first instance'. Therefore the issue of the eligible assessee u/s 144C (15) (b) (ii) is required to be tested at the time of return filed by the assessee as that is the ' in the first instance' and further the issue of eligible assessee u/s 144C (15) (b) (i) is to be tested at the time of passing of the order of the Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 187 of 189 transfer pricing officer under section 92CA (3) of the Act, because in that case it would be ' in the first instance'. 120. We also look at the issue that at what time the definition of eligible assessee according to section 144C (15) (b)(ii) is required to be tested. The law says that it should be 'in the first instance'. It is also important to note that why this phrase has been put into the provisions of section 144C (1) of the Act. This is for the reason that if the status of the assessee stated by the assessee is falling into the above clause than the learned assessing officer is duty-bound to pass the draft assessment orders irrespective of any variation. For the sake of consideration, suppose in case of the assessee, the learned dispute resolution panel would have held the assessee to be a non-resident, naturally the draft assessment order passed by the learned assessing officer would have survived. Take another situation, that if the learned dispute resolution panel would have held it to be resident assessee, then, if the view of the learned authorised representative is accepted, then, the learned assessing officer could not have passed the draft assessment order but should have passed the final assessment order and therefore even the proceedings before the learned dispute resolution panel would have been invalid. Naturally, in this case, the assessee has opted to go before the learned dispute resolution panel on challenge to the draft assessment order. We take the another issue, that suppose if before the higher courts, the assessee challenges his residential status, and if it is held in favour of the assessee that assessee is a non-resident, then this argument does not survive. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 188 of 189 Therefore, it is correct that 'in the first instance', the learned assessing officer should have passed the draft assessment order only. Such ' first instance' is the claim of the assessee in his ROI of residential status. Draft order passed by the ld AO is based on this 'first Instance'. 121. Accordingly we do not find any merit in the ground No. 7 of the appeal of the assessee and hence same is dismissed. 122. Ground No. 8 was not pressed and therefore same is dismissed. 123. Ground No. 9 was also not argued before us independently and therefore same is dismissed. 124. Ground No. 10 of the appeal is with respect to the fact that a refund of ₹ 58,180,852 is already issued to the appellant as considered by the assessing officer however the same has not been received by the appellant. We find that it is the claim of the learned authorised representative that despite the above refund, the assessee has not received the same, the learned assessing officer is directed to look into this fact and if the assessee has not received the above refund for any reason, necessary actions must be taken within 60 days of the date of this order and the necessary refund should be issued a fresh. Accordingly ground No. 10 of the appeal is allowed. 125. Ground No. 11 is with respect to charging of interest under section 234A and 234B of the Act which are consequential in nature and therefore same are dismissed. Printed from counselvise.com IT(IT)A No.571/Bang/2023 Page 189 of 189 126. Ground No. 12 of the appeal is with respect to the initiation of penalty proceedings under section 270A of the Act, which is premature, and therefore same is dismissed. 127. In the result appeal filed by the assessee is partly allowed. 128. Pronounced in the open court on this 9th day of January, 2026. Sd/- Sd/- ( KESHAV DUBEY ) ( PRASHANT MAHARISHI ) JUDICIAL MEMBER VICE PRESIDENT Bangalore, Dated, the 9th January 2026. /Desai S Murthy / Copy to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. Printed from counselvise.com "