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Interpretation of section 80RRA of the Income-tax Act, 1961 in the context of remuneration received by an individual from a foreign employer for services rendered outside India. Analysis: The petitioner, wife of the late Dr. Verman, challenged the rejection of her husband's application for approval of an agreement with a New York company under section 80RRA of the Income-tax Act. The rejection was based on the government's view that the relationship was not one of employer-employee and the agreement predated the provision's enactment. The petitioner argued that the term "remuneration" in section 80RRA is not limited to salary, as per Supreme Court precedents. The court noted that the government's reasons for rejection were legally incorrect. The court referred to the Supreme Court's interpretation in CBDT v. Aditya V. Birla, emphasizing that a consultant or technician employed by a foreign company receiving remuneration in foreign currency is covered under section 80RRA. The court highlighted that the term "remuneration" is broad and includes retainership fees. The petitioner's husband, a consultant, received payment in foreign currency, making him eligible for the section's benefits, subject to conditions. The court found the government's rejection reasons invalid. It clarified that section 80RRA came into force on April 1, 1975, applicable to the assessment year 1975-76, covering the petitioner's husband's agreement period. The court emphasized that the provision does not require the agreement to postdate its enactment. As the rejection lacked legal basis and no other disqualifying grounds existed, the court directed the government to approve the agreement under section 80RRA. In conclusion, the court allowed the writ petition, quashed the government's rejection order, and directed approval of the agreement dated August 25, 1974, under section 80RRA of the Income-tax Act. The court mandated the government to grant approval within four weeks.
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