1999 (8) TMI 964 - AAR - Income Tax

Whether the applicant will qualify as a technician in accordance with section 10(5B) of the Act? Whether, the taxes paid by the employer of the applicant would be exempt from taxation under section 10(5B)of the Act, for a period of forty-eight months commencing from the date of arrival in India?

Summary

Issues:
1. Qualification as a "technician" under section 10(5B) of the Income-tax Act.
2. Exemption of taxes paid by the employer under section 10(5B) for a specified period.

Analysis:

Issue 1: Qualification as a "technician"
The applicant, a citizen of the USA, was deputed to India by his employer to assist in telecommunication services. He sought a ruling on whether he qualifies as a "technician" under section 10(5B) of the Act. To qualify, he must have specialized knowledge and experience in specified areas and be employed in India where such skills are utilized. The applicant's educational qualifications were not readily available, but lack of formal education does not disqualify him. Previous judgments have held that technical knowledge and experience suffice. The applicant's extensive experience in telecommunications operations and his current responsibilities as a telecom manager demonstrate his specialized skills and suitability for the job. Therefore, he qualifies as a "technician" under section 10(5B).

Issue 2: Exemption of taxes paid by the employer
The Department did not contest the applicant's qualification as a "technician" but raised concerns due to his employment with a foreign company. Previous cases have established that employees in businesses conducted in India also qualify as "technicians." The applicant's claim aligns with the fields notified under section 10(5B), including information technology. His work involves providing technical assistance in telecommunications, falling within the scope of information technology. Therefore, the applicant's claim for exemption under section 10(5B) is valid. The ruling states that the applicant qualifies as a technician and the taxes paid by his employer are exempt from taxation under section 10(5B).

This detailed analysis of the judgment highlights the applicant's qualifications, the legal requirements for being considered a "technician," and the exemption of taxes paid by the employer under section 10(5B) of the Income-tax Act.