2000 (12) TMI 53 - HC - Income Tax

Summary

Issues:
Petitioner's entitlement to deduction under sections 80RRA and 80-O of the Income-tax Act.

Analysis:
The petitioner, a retired executive director, became an advisor to a UK company post-retirement. The assessing authority denied the petitioner's deduction claim under sections 80RRA and 80-O of the Income-tax Act. The petitioner argued that he satisfied the criteria for relief under section 80RRA as a technician rendering services abroad for foreign remuneration. The Joint Secretary, as the appropriate authority, rejected the petitioner's claim under section 80RRA. The petitioner contended that the law did not require an employer-employee relationship for claiming relief under section 80RRA, citing relevant case law. The respondent argued that the petitioner misrepresented his employment status in the application, emphasizing the intent of section 80RRA to benefit salaried employees working abroad as technicians.

The court examined the arguments presented by both parties. It found no merit in the respondent's claim that the petitioner acted with unclean hands. The court noted that the petitioner clearly identified himself as an advisor in the application, receiving a monthly remuneration from the UK company. The denial of benefits was based on the requirement of an employer-employee relationship under section 80RRA and the perceived impact of previous court decisions and legislative amendments. The court referenced the Supreme Court and a Division Bench decision, emphasizing that the term "employer-employee" encompassed consultants and technicians for the purpose of section 80RRA.

The Division Bench's interpretation aligned with the petitioner's case, deeming the petitioner's advisory role as equivalent to employment for section 80RRA eligibility. The court rejected the respondent's argument that subsequent legislative changes nullified the effect of prior court decisions, emphasizing the absence of express repeal of section 80RRA. Ultimately, the court ruled in favor of the petitioner, quashing the order denying approval under section 80RRA. Consequently, the petitioner was deemed entitled to permission under section 80RRA of the Income-tax Act, and the writ petition was allowed, making the rule absolute.