In a recent case before the Income Tax Appellate Tribunal (ITAT) Delhi, the controversy was centered around the residential status of the assessee for the relevant assessment year of 2017-18. The Assessing Officer had held the non-residential status of the assessee against him on the basis that his stay abroad for more than 180 days was not supported by any evidence, including a passport.
The assessee filed submissions at the appellate stage, which included the details of the number of days spent in India in the financial year 2016-17 along with a copy of his passport. However, despite this submission, the ld CIT(A) considered it a case where the residential status of the assessee could not be ascertained in the absence of a passport.
This decision by the ld CIT(A) was erroneous since the evidence in the form of a passport entry does not require much verification. Therefore, the ITAT Delhi restored the issue of considering the evidence in the form of a passport entry for the determination of the residential status of the assessee to the files of the ld CIT(A).
In this regard, it is important for Chartered Accountancy firms in Gurgaon to note that a passport can play a crucial role in determining the residential status of an assessee. The Indian Income Tax Act defines the residential status of an individual based on the number of days he/she stays in India during a financial year.
For the purpose of determining the residential status of an assessee, the number of days spent in India is counted from the date of his/her arrival in India to the date of his/her departure from India. Therefore, it is essential to have documentary evidence to support the number of days an individual has spent in India during a financial year.
One of the most reliable documents to establish the number of days an individual has spent in India is a passport. A passport contains details such as the date of entry into and exit from India, which can be used to calculate the number of days an individual has stayed in India.
Therefore, it is crucial for Chartered Accountancy firms in Gurgaon to advise their clients to maintain their passports carefully, especially during the financial year, as it can serve as evidence in determining their residential status. If an individual does not possess a passport, other documents such as boarding passes, travel itineraries, etc., can be used to establish the number of days spent in India.
In conclusion, the recent decision by the ITAT Delhi highlights the importance of having a passport or other documentary evidence to establish the number of days an individual has spent in India during a financial year. Chartered Accountancy firms in Gurgaon should advise their clients to maintain their passports carefully and keep track of their travel itineraries to avoid any controversy regarding their residential status.
