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Case Number

Case Referred No. 11 of 1946

Judges

Satyanarayana Rao
Viswanatha Sastri, JJ.

Acts

Section 4-A(a)(iii) of the Income-tax Act

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Smart Summary

Structured Summary of the Opinion (Satyanarayana Rao, J.; Viswanatha Sastri, J.)

Factual and Procedural Background

The Appellate Tribunal referred the following question under Section 66(1) of the Income-tax Act:

“Whether in the circumstances of the case the applicant can be held to be a ‘resident’ in British India in the ‘previous year’ under S. 4-A(a)(iii) on the ground that he was in British India in the previous year otherwise than on an occasional or casual visit.”

The material facts found or admitted in the opinion are:

The assessee was originally a resident of Authoor (a village in the Tirunelveli district) but left several years earlier to reside and carry on business in Ceylon. He married a Ceylonese woman.
The assessee's father continued to live at Authoor (about 35 miles from Tuticorin).
Periods of stay in British India within the four years preceding the year of account included:
- 17 February 1936 to 4 July 1936 (137 days),
- 18 October 1937 to 10 December 1938 (about 13 months).
In the accounting year 1941–42 (the year in dispute) the assessee came to British India and stayed for approximately six months (the opinion treats the visit as a six-month stay during that year).
The reason for his coming in 1942 was stated to be the fear of invasion by Japan; he lived for a time at Tuticorin and later at Authoor in a rented house and subsequently returned to Ceylon after the fear subsided.
The Income-tax Officer found that during the accounting year remittances of Rs. 66,800 were received from Ceylon and that the amount was sent to the assessee's father.
Administratively, the Income-tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal had all found that the visit in 1942 was not an occasional or casual visit and that the assessee therefore satisfied S.4-A(a)(iii) and was resident in British India for the year.

Legal Issues Presented

Whether the assessee can be held to be a "resident" in British India in the relevant previous year under Section 4-A(a)(iii) of the Income-tax Act on the ground that he was in British India in that year "otherwise than on an occasional or casual visit".
How the expression "occasional or casual visit" should be understood/applied for the purpose of determining residence under Section 4-A(a)(iii) (i.e., what tests or factors determine whether a visit is casual or occasional).

Arguments of the Parties

Appellant's Arguments

The assessee contended (as recorded) that the Appellate Tribunal's judgment was influenced by a conclusion reached by the Income-tax authorities in a prior year of assessment; that this prior assessment order was referred to for the first time in the Appellate Tribunal's order; and that the assessee had no opportunity to meet that evidence.

Respondent / Revenue Position

The Income-tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal had all found on the facts that the 1942 visit was not a casual or occasional visit and therefore the assessee satisfied the second requirement of Section 4-A(a)(iii) and was a resident in British India for the year.
Reference was made (in argument) to certain English authorities about "residence" and "ordinary residence" (the court records that those authorities were not considered decisive for the present question, but some factors from the authorities were relevant for consideration).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Levene v. The Commissioners of Inland Revenue, (1928) 13 Tax Cas 486 at p.497; (1928 AC 234	Illustrative factors to be considered in deciding the meaning of "residence"; the impossibility of framing a single precise definition of "residence" (and by analogy the same difficulty applies to defining "casual visit").	The court observed that the English decision was not directly helpful to resolve the specific question but that the factors mentioned by Lord Hanworth M.R. (such as going to a place for rest, proximity to relations, etc.) could be considered when deciding whether a visit partakes of the character of a casual visit. The court did not adopt a rigid rule from the case but used the descriptive factors as relevant indicia.

Court's Reasoning and Analysis

The court proceeded by identifying the statutory test in Section 4-A(a)(iii), which contains two conjunctive requirements:

That the individual must have been in British India for a period or periods aggregating 365 days or more within the four years preceding the year of account (the court found this requirement was satisfied on the admitted facts); and
That the individual must be in British India in the year of account "for any time ... otherwise than on an occasional or casual visit." The controversy centered on this second requirement.

On the meaning of "occasional" and "casual" the court noted:

The words are not susceptible of a precise, universally applicable definition; the Oxford Dictionary definitions were cited to indicate that "casual" can mean accidental, uncertain, not to be counted on, occurring without design or liable to happen.
A "visit" carries the idea of a short or temporary stay. Examples given in the opinion: an "occasional" visit could be attendance at a relative's marriage or giving evidence in a suit; a "casual" visit could be going to see a friend or for sightseeing — in both, the visitor intends a short stay and intends to return to his permanent residence.
The crucial test is the quality of the presence: whether the visit was accidental or uncertain in nature, and whether the visitor intended a temporary stay with an intention to revert to his place of abode.

Application to the facts:

Although the reason for leaving Ceylon (fear of Japanese invasion) was beyond the assessee's control and thus could be described as accidental or fortuitous as a cause, that fact alone did not make the assessee's visit to British India a casual visit.
The court examined the assessee's intention at the time he left Ceylon: he chose Authoor because his father lived there and intended to live at Authoor for an indefinite period rather than to make a short visit.
Objective indicia supported that intention: the assessee rented a house at Tuticorin and later at Authoor (the court considered hiring a house as inconsistent with the temporary nature of a casual visit), and he received substantial remittances from Ceylon during the accounting period which were sent to his father.
The court also considered the structure of other clauses of Section 4-A (e.g., clauses treating 182-day stays or taking a house for dwelling as indicators of residence) and inferred that a stay of nearly six months combined with renting a house points away from a "casual or occasional" visit.
The Appellate Tribunal's inference that the visit was not casual was held to be correct and justified on the facts presented.
On the contention that the Appellate Tribunal improperly relied on a prior assessment order that had not been previously invoked: the court held the Tribunal was entitled to take into account the assessee's prior conduct (including prior assessment conclusions) in determining residence, and therefore there was no prejudice to the assessee in that regard.
Viswanatha Sastri, J., concurred and emphasized that the proper inquiry focuses on the "quality" of presence (object and intention), and that antecedent and subsequent conduct can be considered; he reached the same conclusion on the facts (not casual/occasional visit, intention to remain for an indefinite period, renting a house, remittances as corroborative evidence).

Holding and Implications

Holding:

ANSWERED IN THE AFFIRMATIVE — the assessee was held to be a resident in British India within the meaning of Section 4-A(a)(iii) for the year in question.

Direct consequences (as stated in the opinion):

The respondent (revenue) was entitled to costs payable by the applicant; the court fixed costs at Rs. 250.
On the direct effect, the assessee is liable to be charged as a resident in British India for the year under Section 4-A(a)(iii) on the facts found.

The opinion does not purport to lay down a precise general rule for all cases; rather it explains the indicia and factual tests the court applied here (intention, duration of stay, renting a house, remittances, prior and subsequent conduct). The opinion does not announce any broader novel precedent beyond the application of Section 4-A(a)(iii) to the facts of this case.

Reference answered.

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A.M.M. Sayed Abdul Cader v. Commr. Of Income-Tax

Satyanarayana Rao, J.:— The Appellate Tribunal referred to us the following question under Section 66(1) of the Income-tax Act:

“Section 4A(a)(iii) For the purpose of this Act any individual is resident. In British India in any year if he having within 4 years preceding that year been in British India for a period of or for periods amounting in all to 365 days or more, is in British India for any time in that year otherwise than on occasional or casual visit.”

The facts found or admitted are: the assessee, who was onca a resident of Authoor, a village in the Tirunelveli district, left the place several years ago and went to Ceylon where he married a Ceylonese lady. He thereafter carried on business in Ceylon. At Authoor the father of the assessee is still living. It is a place which is about 35 miles away from Tutioorin. The assessee came to British India on 17th February 1936 and stayed till 4th July 1936, i.e, for a period of 137 days. Then from 18th October 1937 till 10th December 1938, he stayed in British India for a period of 13 months. In the accounting year 1941 42 which is the subject-matter of the present dispute he came and lived in British India from 1st January 1942 ??? 1st July 1942 and during this period ??? be seen that the SO days are within accounting year. He came to India as the re was the fear of invasion by Japan and stayed for are time at and later at in a rented house. He subsequently returned to Ceylon after the fear was removed. It is also found by the Income-tax Officer that in this year of accounting remittances to the tune of Rs. 66,800 were received from Ceylon and that the amount was sent to his father.

2. The section quoted above requires in order to constitute residence in British India two things firstly the assessee should have lived for a period amounting in all to 366 days or more, in British India within the four years preceding the year of account; secondly, that he should be in British India for any time during that period otherwise than on an occasional or casual visit. So far as the first requirement of the section is concerned it is undoubtedly satisfied in the present cate as he lived in British India for more than 365 days within the period of 4 years preceding the year of account. The controversy relates to the second requirement namely whether has visit to British India in 1942 was occasional or casual? The Appellate Tribunal as well as the Income, tax Officer and the Appellate Assistant Commissioner have found that in the circumstances of the case the visit was not an occasional or a casual one and that, therefore, the second requirement was also satisfied and that the assessee was a resident in British India within the meaning of S. 4-A(a)(iii) of the Act. There is no decision which has considered the expression ‘occasional’ or ‘casual’ visit; and though the expressions are capable of easy application to given set of facts, it is difficult to lay down in precise terms the meaning of those expressions. The wort ‘casual’ according to Oxford Dictionary is capable of several meanings and it includes the idea of a thing being accidental or coming at uncertain times; not to be calculated upon; unsettled; occurring without design or liable to happen. The word “visit” conveys also the meaning of short or temporary stay at a place. By occasional visit must be meant that a person visits a place on a particular occasion such as, the marriage of a relation or a friend; or giving evidence in a suit and allied matters; while casual visit implies that the object or the intention of the person making the visit was to stay for a short period and return back to has residence; for example, a mm may pay a visit to a friend or a relation or go to a place for sight-seeing. The common feature of such visits is that the person making the visit of visits intends to go to the place for a short period with the object of returning immediately. He does not intend to stay there for long. The test, therefore, to determine whether a visit is casual or not is to find out whether it was of an accidental or uncertain nature and whether the intention of the person visiting the place was for a temporary stay with the intention of reverting back to the place of has abode. As I said before, it is easy to give instances of casual visits rather than to define in precise terms the essence and the nature of a casual visit.

3. In the course of the arguments before us reference was made to some decisions of English Courts which had occasion to consider the difference between “residence” and “ordinary residence.” I am, however, of opinion that those decisions are not of assistance in resolving the question before us. In one of the cases reported in Levene v. The Commissioners of Inland Revenue, (1928) 13 Tax Cas 486 at p. 497 : (1928 A.C 234), Lord Hanworth M.R refers to certain factors for consideration with reference to the meaning of the word “residence” and as pointed out by the learned Lord, it is not possible to frame a definition of residence and the same would apply to definition of casual visit, it must depend upon questions of degree and of fact. The learned Lord referred to certain factors which should be considered in arriving at a decision whether in a given set of circumstances a person could be deemed to be resident in a particular locality or not. For example, he points out that if a man goes to a place to obtain rest or refreshment or recreation suitable to has choice or if he retunra to and seeks has own fatherland in order to enjoy a sojourn in proximity to has relations and friends such factors constitute an important element in the decision of the question of what constitutes residence. If they are present, they do not make the person a resident of the place. These factors in my opinion can also be considered in deciding whether the visit of a person to a place does or does not partake of the character of a casual visit.

4. On the facts of the present case, however, no difficulty arises in coming to the conclusion that the visit of the assessee in the year 1942 for a period of six months does not constitute an occasional or casual visit. No doubt the reason which compelled him to leave Ceylon was something which was beyond has control, namely the fear of invasion by Japan; but that does not make the visit a casual visit for that reason. What was has intention when he left Ceylon? He certainly decided the choice of has place by tabing into consideration the fact that his father lived at Authoor in the Tinnevelly district and his intention was then to live at Authoor for an indefinite period and not to pay a flying visit foe a snort time to has father's place of residence Not only that there is this additional circumstance, that he rented a house when he was at Tuticorin and also when he was at Authoor for has residence. A casual visitor would not be compelled to take a house on rent and that is certainly an indication of has intention to live there for some time as a resident and not merely as a casual visitor. There is also the fact that he received remittances through his father from Ceylon of substantial amount even during the accounting period.

5. Some light is thrown by the other clauses of B. 4-A. The duration of the period of stay is of some significance in deciding the question whether the person is or is not a resident in British India Under S. 4-A(1) if a man lived for a period of 182 days in a year in British India he is deemed to be a resident in British India. Again, under cl. (ii), even though he might not have lived for a long period in British India, if for a period of 182 days, he had engaged a house for has dwelling and visited even at least for a day in that period, British India, he is deemed to be a resident. Under cl. (iii) first part, if a person lived in British India for a period of or periods aggregating to 365 days or more within the four years preceding the accounting year, it would be an element which goes to show that he is a resident in British India; of course, the second part of the section should also be complied with. Here again the period is one year in four years; and the length of the period is taken as an indication of an intention to reside in British India. Prom these, it may not be irrelevant to conclude that when a person lives for a period of nearly six months in a year, has visit which was responsible for the stay cannot be treated as a casual visit or occasional visit within the meaning of the clause. It is not a short period and further the man has clearly intended by the fact that he took a house for rent to live there and not to stay there for a time and return back to Ceylon.

6. The appellate tribunal was also of opinion that when the assessee left Ceylon he could not have in mind that has stay would be temporary one or for a short time and this may be inferred from the fact that he took up a house in order to establish has residence at Tuticorin. In my opinion, the test applied by the appellate tribunal to conclude that the visit was not a casual one is correct and the inference also was justified.

7. There is the further contention raised on behalf of the assessee that the judgment of the appellate tribunal was influenced by the conclusion which was cached by the Income-tax author ties in the prior year of assessment and this evidence was referred to for the first time in the order of the Appellate Tribunal and that he had no opportunity to meet that evidence. It was argued that the prior order ought not to have been referred to at all by the Appellate Tribunal in order to arrive at the conclusion which they did. We think that there is no force in this contention. In order to determine whether the assessee was a resident in British India or not the Appellate Tribunal was entitled to take into consideration the conduct of the asses, see prior to the period which is now under consideration and therefore the reference to the prior assessment order was justified in the ciroumtances of this case. Even apart from the evidence afforded by the prior assessment order, on the other facts which we have adverted to already, it is clear that the visit of the assesses was not of a casual or occasional nature and that he is a resident in British India.

8. We think, therefore, that the answer to the question referred to us by the Appellate Tribunal should be in the affirmative. The respondent is entitled to has costs payable by the applicant which we fix at Rs. 250.

Viswanatha Sastri, J.:— I agree with my learned brother. The question whether a visit is a casual or an occasional visit within the meaning of Section 4-A(a)(iii) of the Income-tax Act depends not on mere presence in British India but on the quality of the presence in relation to the objects and intentions of the person sought to be charged to tax in a particular year. His object and intention can be gathered from the circumstances in which he paid the visit as well is has declarations and conduct. I agree with my learned brother that has conduct and of stay, prior to the year of charge and subsequent, could be considered in relation to the question whether a visit was of a casual or occasional nature or otherwise. It is true that the taxpayer's charge ability in a particular year is a separate issue but then has antecedent and subsequent conduct would be relevant in order to arrive at a decision on the question whether has visit in a particular year was a casual or occasional or otherwise. It is difficult as my learned brother has observed to formulate a precise test which would provide a solution in every case. There are, however, certain outstanding features in the present case which place the matter beyond all reasonable doubt. The reason for the visit of the assessee to British India in 1941-1942 is stated to be the apprehension of a Japanese occupation of Ceylon where the assessee was residing. If that was the reason for has leaving Ceylon and coming over to Britiah India, then though the reason for has coming over to British India was a casual or an accidental or fortuitous reasons, still has coming over to British India was with a set purpose and the result of a design to return to has own native place where has parents were also living. At the time when he left Ceylon it could not be predicated when conditions in Ceylon would be favourable for has return to that country and therefore has stay in India was of an indefinite duration and was actuated by a desire to remain in has native place during the hostile occupation of the country where he was doing has business. The duration of has stay in British India is also an important factor to be taken into account. In this particular case during the year of account, he stayed for three months and in the succeeding year he continued has stay by another three months. A casual or occasional visit postulates a short or temporary stay at a place and judged by the duration of the stay it cannot be said that the visit here was casual or occasional. Indeed when he came over to India he could not have had any idea of the time when he was going to return to Ceylon or whether he was going to return at all to resume has former avocation. His parents were residing in British India in the village of Authoor and has return to has fatherland to stay in proximity with has parents was natural and in the usual course of things. It cannot be said to be a casual or occasional visit. His taking a house for rent is also indicative of has intention to stay in British India for an iniefinite period. His getting has Ceylon investments remitted to India is further proof of has intention to settle down at least for the time being in has native village.

9. In these circumstances it seems to me that the order of the Appellate Tribunal declaring that the assessee is liable to be charged as a resident in British India is correct. I agree with the conclusion of my learned brother and has order as to costs.

C.R.K/V.R.B

10. Reference answered.

A.M.M. Sayed Abdul Cader v. Commr. Of Income-Tax

Structured Summary of the Opinion (Satyanarayana Rao, J.; Viswanatha Sastri, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Respondent / Revenue Position

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

A.M.M. Sayed Abdul Cader v. Commr. Of Income-Tax

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