The Income Tax Appellate Tribunal (Bengaluru Bench) rejected Binny Bansal’s claim of non-resident status for AY 2020–21, denying him benefits under the India–Singapore DTAA.
Despite relocating to Singapore, the Tribunal held that he continued to be a resident of India under Section 6(1)(c) of the Income-tax Act.
The Numbers That Decided the Case
- Days in India during FY 2019–20: 141 days
- Stay in India during preceding 4 years: 1,200+ days
- Statutory threshold breached:
- 60 days (current year) + 365 days (preceding 4 years)
This alone was sufficient to trigger Indian tax residency.
Why the 182-Day Argument Failed
Bansal argued that:
- The 60-day limit should be relaxed to 182 days under Explanation 1(b), since he had gone abroad for employment.
The ITAT rejected this because:
- The relaxation applies only in the year of departure
- Bansal left India in FY 2018–19, not FY 2019–20
Managing days of stay after relocation does not reset the rule.
DTAA Tie-Breaker: Why India Won
The Tribunal examined the entire assessment year, not just post-migration facts, and found:
- Major investments and residential properties in India
- No immovable property in Singapore
- Economic interests remained India-centric
- Habitual abode existed in both countries
- Indian nationality became decisive
Result: Treaty tie-breaker ruled in India’s favour.
What This Signals for Founders & HNIs
This ruling reinforces a hard truth:
- Physical relocation ≠ tax non-residency
- Family movement and overseas employment alone are insufficient
- Economic nexus, timing, and substance matter more than intent
The decision sends a clear signal against residence-based tax planning driven purely by day-count management.
Bottom Line
This is not a treaty interpretation case.
It is a residency substance case.
For promoters and globally mobile individuals:
Tax residency is decided by facts over the full year — not by passports, addresses, or last-quarter moves.
Source: Economic Times
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