Supreme Court dismisses the petition challenging CBDT Circular by the NRI who stuck in India due to Covid-19

The Hon’ble Supreme Court dismiss the petition filed by an NRI, whose stay in India was involuntary extended on account of Covid-induced lockdown and suspension of international air travel, challenging the Circular issued by the CBDT, alleging that it had placed him in the pernicious position of losing his ‘non-resident status’ for the purpose of Income Tax Act, 1961.

The Court stated that there was a transport bubble system created for such passengers, which the petitioner could have availed. The Court Further noted that:

“We won’t entertain such petition unless and until you show us that you are completely powerless and confined to the shores of this country, then only we will consider the matter from the stand point of Article 32 but if this is the situation, the transport bubble was created from July 1 onwards and yet you chose not to avail, that is the matter to go into individual cases,”

Author Remarks

It is noteworthy to state here that the CBDT on 3^rd March 2021 has issued a circular (No. 2/2021) wherein the board has explained the legal position with respect to residential status considering the provisions of the Income Tax Act as well the provisions of the DTAAs.

The Board has firm view that there should be no case of double non taxation. However, if there is any case of double taxation, then the board will entertain the applications of such Individual. The Form / Application for that purpose has been prescribed in the Circular itself.