Sir George Arnatoglu vs. Commissioner of Income Tax (1967)

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The appellant disputed his assessment of income tax in 1962 on the grounds that he was not a resident of Tanzania in 1962 subject to the terms of the East Africa Management Act of 1958 whose section 2 was similar to Kenya’s.

Income Tax Act of Kenya, Section 2(a) states:

“resident”, when applied in relation to an individual means –

  • that he has a permanent home in Kenya and was present in Kenya for any period in a particular year of income under consideration; or
  • that he has no permanent home in Kenya but –

(A) was present in Kenya for a period or periods amounting in the aggregate to 183 days or more in that year of income; or

(B) was present in Kenya in that year of income and in each of the two preceding years of income for periods averaging more than 122 days in each year of income.

The appellant had a home in Dar es Salaam in 1960 and was present there for 249 days. In 1961, he sold that home but remained present in Tanzania for 124 days. In 1962, he had no home but was present in the country for 62 days. On average, he was there for 4 months in each of the 3 years.

He argued that the definition of resident in the 1928 Act did not permit it to aggregate periods of residency with periods of mere presence. Also, that averaging in accordance to Section 1b (2) of the Act meant that four months presence was required in each of the relevant years.

The definition of resident under the Act for which the construction depended said that it was permissible for purposes of the Act to aggregate periods of residence with periods of presence. The court went on and said that first, “an individual is defined as residing in the territory if he in fact does so” and secondly, “an individual is deemed to reside in the territory if the facts are such that he would not normally be regarded as residing in the territory or there would be doubt as having done so.”

It was held to be permissible to aggregate period of residence and those of presence in territory.

“I wish to draw attention to the general scheme of residency. An individual is defined as residing in the territory if he in fact does so. An individual is deemed to reside in the territories if facts are such that he will not normally be regarded as residing in the territory or there would be doubt as to whether he did so. I wish to emphasize that the deeming provision of this provision only comes into play if facts are such that the individual will not normally be regarded as residing in the territories. I also wish to point out that modern legislature requires something to be deemed that of necessity means that it is to be treated as a thing different from what it in fact is. If deeming provisions are resorted to, then one seeks to ascertain whether a person who is in fact not a resident, should be treated as one. For purposes of deeming provision, it is immaterial whether he had a home in the two preceding years so long as on the basis of averaging he was present in each of these two years for the requisite period. Appeal dismissed.”