S.V. MEHROTRA, A.M. ORDER appeal has been filed by assessee against order of learned CIT(A)-II, Kanpur dt. 13th July, 2004 for asst. yr. 2001-02. 2. effective ground of appeal is that learned CIT(A) erred in holding that residential status of assessee was resident and ordinarily resident as against resident but not ordinarily resident . 3 . Brief facts of case are that assessee filed his return of income declaring total income at nil. assessee had claimed income to be exempt under s. 5(1) of Act. assessee was serving in Merchant Marinar in rank of chief officer and deriving salary in foreign currency from employer M/s MOL Ship Management Asia Pte. Ltd., Singapore. assessee claimed his residential status as "resident but not ordinarily resident". In support of his claim of status, assessee has submitted copy of acknowledgement of filing of return for asst. yrs. 1995-96 to 1999-2000 and certificate of being out of India for preceding years. AO noticed that assessee had not been in India as per certificate as under : Previous No. of Residential year days status R (to be 1. 2000-01 113 determined) 1999- 2. -- R&OR 2000 3. 199 8 -99 214 NR 4. 1997-9 8 64 R&OR 5. 1996-97 295 NR 6. 1995-96 20 8 NR 7. 1994-95 28 R&OR 8. 1993-94 -- R&OR 9. 1992-93 201 NR 10. 1991-92 365 NR 11. 1990-91 24 R&OR 4 . AO observed that from this chart it was evident that during relevant assessment year under consideration assessee had been in India exceeding 1 8 2 days. Therefore, his residential status was taken as resident as per s. 6(1)(a) of Act. In order to determine status whether he was resident and ordinarily resident or resident but not ordinarily resident he noted that he had been resident in India in 5 years out of 10 previous years preceding previous year under consideration. Thus, he had been in India more than 730 days in all during seven previous years preceding year under consideration. After considering assessee s submissions, AO treated assessee as resident and ordinarily resident under s. 6(1) r/w 6(6) of Act. learned CIT(A), after considering amendment brought in Act by Finance Act, 2003 in s. 6(6), observed that person will be not ordinarily resident only when he is non-resident in at least 9 out of 10 previous years preceding relevant year. He observed that this amendment is clarificatory in nature as per explanatory note in Finance Act. He, accordingly, upheld order of AO. 5 . learned counsel relied on various case laws and submitted that admittedly, assessee was not resident in India in 9 out of 10 years. He was resident only for 5 years and therefore, residential status of assessee was resident but not ordinarily resident . He has relied on following cases : (i) Advance Ruling No. P. 5 of 1995 XYZ, In re (1996) 136 CTR (AAR) 345 : (1997) 223 ITR 379 (AAR); (ii) Morgenstern Werner vs. CIT & Anr. (1999) 151 CTR (All) 416 : (199 8 ) 233 ITR 751 (All); (iii) CIT & Anr. vs. Morgenstern Werner (2003) 1 8CTR (SC) 202 : (2003) 259 ITR 4 8 6 (SC); (iv) Sedco Forex International Drill Inc. & Ors. vs. CIT (2005) 199 CTR (SC) 320 : (2005) 279 ITR 310 (SC). 6 . In case before Authority for Advance Rulings (1996) 136 CTR (AAR) 345 : (1997) 223 ITR 379 (AAR) (supra), facts were that assessee had returned to India in 1995 after having left in 1970. It was held that she was resident but not ordinarily resident for asst. yrs. 1996-97 to 2004-05. It was further held that correct construction of s. 6(6) of Act was that person would become resident and ordinarily resident if (a) he had been resident in 9 out of 10 previous years preceding that year; and (b) had been in India for at least 730 days or more during 7 years preceding that year. 7 . individual will be treated as resident but not ordinarily resident if either of these conditions was not fulfilled. 8 . In case of Morgenstern Werner vs. CIT (supra), it was observed that s. 6 of Act lays down that person is not ordinarily resident in India if in 9 out of 10 preceding years he had not been resident in India. This decision of Hon ble Allahabad High Court was affirmed by Hon ble Supreme Court in (2003) 1 8CTR (SC) 202 : (2003) 259 ITR 4 8 6 (SC) (supra). 9 . learned Departmental Representative pointed out that in order to remove ambiguity in section, clarificatory amendment has been brought out in s. 6(6)(a) and in view of this amended section unless individual has been non-resident in India in 9 out of 10 years preceding year under consideration, he will not be treated as resident but not ordinarily resident . He submitted that assessee was, admittedly not non-resident in 9 out of 10 preceding years and therefore, his status has rightly been taken as resident and ordinarily resident . 10. I have considered rival submissions and have perused record of case. As per s. 6(1)(a), if person is in India for period or periods amounting in all to 1 8 2 days or more in year, then he will be resident in India in that year. Sec. 6(6) lays down when person is said to be not ordinarily resident in India . Prior to its substitution by Finance Act, 2003 w.e.f. 1st April, 2004, s. 6(6)(a) read as under : "6. Residence in India ............. (6) person is said to be "not ordinarily resident" in India in any previous year if such person is (a) individual who has not been resident in India in nine out of ten previous years preceding that year, or has not during seven previous years preceding that year been in India for period of, or periods amounting in all to, seven hundred and thirty days or more; or." 11. This section has now been substituted by Finance Act, 2003 w.e.f. 1st April, 2004 as under : "(6) person is said to be "not ordinarily resident" in India in any previous year if such person is (a) individual who has been non-resident in India in nine out of ten previous years preceding that year, or has not during seven previous years preceding that year been in India for period of, or periods amounting in all to, seven hundred and thirty days or more; or" 1 2 . residential status of person is resident but not ordinarily resident when he satisfies one of basic conditions as contemplated under sub-s. (1) of s. 6 and either of conditions as contemplated under sub-s. (6) cl. (a) is fulfilled. In present case, it is not disputed that assessee was in India for more than 730 days and therefore, one of conditions laid down under cl. (a) to sub-s. (6) of s. 6 is not satisfied. There is no dispute to this extent. 13. Now dispute concentrates only with respect to other part of cl. (a) of sub-s. (6) of s. 6 viz. individual who has not been resident in India (non- resident as substituted by Finance Act, 2003) in nine out of ten previous years preceding that year. assessee s claim is that he fulfils this condition because he was resident only for 5 years in 9 out of 10 previous years preceding year in question. In support of his contention, assessee has relied on various case laws particularly on decision of Tribunal Bangalore Bench in case of Ram Sagar Chaudhari vs. ITO (19 8 9) 31 ITD 21 (Bang), wherein it has been held that requirement of s. 6(6)(a) is not that assessee should be non-resident in 9 out of 10 years. meaning of expression is that if assessee has not been resident in India in 9 out of 10 previous years, he will be not ordinarily resident i.e. if he is resident for less than 9 out of previous 10 years, he will be not ordinarily resident . 14. Now specific amendment has been brought in Act by Finance Act, 2003 as noted earlier. learned CIT(A) in para 6 has quoted explanatory not from Finance Act where it is clarified that amendment is only clarificatory in nature. relevant part of explanatory note is reproduced below : "6. Change in definition of not ordinarily resident. 6.1 Under existing provision contained in sub-s. (6) of s. 6, person is said to be "not ordinarily resident" in India in any previous year if such person is individual who has not been resident in India in nine out of ten previous years preceding that year, or has not during seven previous years preceding that year been in India for period of, or periods amounting in all to, seven hundred and thirty days or more; or is HUF whose manager has not been resident in India in nine out of ten previous years preceding that year, or has not during seven previous years preceding that year been in India for period of, or periods amounting in all to, seven hundred and thirty days or more. This definition has been subject to differing legal interpretations. 6.2 In order to remove any doubts in this regard, Act has substituted existing definition with new one to provide that person would be "not ordinarily resident" in India in any previous year if such person is individual who has been non-resident in India in nine out of ten previous years preceding that year, or has during seven previous years preceding that year been in India for period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or is HUF whose manager has been non-resident in India in nine out of ten previous years preceding that year, or has during seven previous years preceding that year been in India for period of, or periods amounting in all to, seven hundred and twenty-nine days or less. 6.3 amendment is clarificatory in nature and will take effect from 1st April, 2004." 1 5 . Though in notes on clauses it has been mentioned that proposed amendment is clarificatory in nature, but amendment has been made applicable in relation to asst. yr. 2004-05 and subsequent years which is evident from Finance Bill, 2003 introducing this amendment (2004) 260 ITR 41 (St.). It is substantive provision inasmuch as it determines tax liability of person and therefore, it cannot be said to be procedural section. Moreover, definition of resident is entirely different from non-resident. Therefore, once in substituted section concept of non-resident has been brought into in place of resident, it cannot be said that it is clarificatory in nature. scope of total income of assessee is decided with reference to residential status. Consequently, tax effect of assessee s total income is decided with reference to residential status. By virtue of this section, assessee acquired vested right in form of reduced total income. In regard to statutes dealing with substantive rights, I may refer to decision of Hon ble Supreme Court in case of Keshvan vs. State of Bombay AIR 1951 SC 12 8 wherein it has been held that cardinal principle of construction of statutes is that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. This rule is applicable where object of statute is to affect vested rights (e.g. in present case by amendment, person who hitherto was to be assessed as resident but not ordinarily resident will be assessed as resident and ordinarily resident thereby increasing his scope of total income and consequently tax liability) or to impose new burdens or to impair existing obligations. In words liability) or to impose new burdens or to impair existing obligations. In words of Lord Blanesburg, "provisions which touch right in existence at passing of statute are not to be applied retrospectively in absence of express enactment or necessary intendment". Therefore, merely because in notes on clauses it has been mentioned that it is clarificatory in nature, it cannot be said that substituted section is clarificatory in nature. In present case, since it is not disputed that assessee was not resident in India in 9 out of 10 years preceding assessment year in question, assessee had rightly claimed its status as of "resident and not ordinarily resident" in asst. yr. 2003-04. interpretation given by learned CIT(A) based on notes on clauses cannot be accepted. 1 6 . learned CIT(A) s observations that interpretation placed by Tribunal in Ram Sagar Chauhan s case will create anomalous position is purely based on conjectures inasmuch as basic cannon of taxing statutes is of strict interpretation. If language of section is clear and unambiguous then same cannot be interpreted in manner so as to subscribe to altogether different meaning to that piece of legislation. Courts are not to take into consideration consequences that would follow. Courts are not to fill in gaps in legislation. matter which should have been, but has not been provided for in statute cannot be supplied by Courts, as to do so will be legislation and not construction. In present case not mentioning of non-resident in s. 6(6)(a) is case of casus omissus which has been corrected by Finance Act, 2003. I may further observe that aid to notes on clauses can be had only in case of some ambiguity in section and not otherwise. 17. In view of aforementioned discussion, I allow assessee s appeal. *** ABHAY PRATAP SINGH SENGAR v. INCOME TAX OFFICER