1993 (9) TMI 88 - HC - Income Tax

Summary

Issues:
Interpretation of section 10(6)(viia)(1)(B) of the Income-tax Act, 1961 regarding entitlement to relief for a foreign technician for the assessment year 1975-76 based on the timing of approval by the Central Government.

Analysis:
The judgment of the High Court of Bombay involved a reference under section 256(1) of the Income-tax Act, 1961, regarding the entitlement of a foreign technician to relief under section 10(6)(viia)(1)(B) for the assessment year 1975-76. The case revolved around the delay in the Central Government's approval for exemption from income tax for the foreign technician, who was working with a company engaged in construction activities in India. The technician's employer had applied for exemption within the stipulated time frame, but the approval was granted three days after the deadline of October 1, 1975.

The High Court examined the facts of the case and emphasized that the delay in approval was not due to any fault of the employer. The Court noted that the employer had fulfilled all necessary requirements within the prescribed timeline. The Court held that the approval should relate back to the date of the application, ensuring that the technician is not deprived of the benefit of exemption based on a delay caused by the Central Government.

After considering the arguments presented by both parties, the High Court concluded that the foreign technician was indeed eligible for the benefit of exemption under section 10(6)(viia)(1)(B) of the Act for the assessment year 1975-76. The Court reasoned that since the employer had complied with all statutory requirements and the delay in approval was beyond their control, the technician should not be penalized for the administrative delay. Therefore, the Court ruled in favor of the technician and against the Revenue, affirming that the relief should be granted based on the just and reasonable interpretation of the provision.

In the final disposition, the High Court decided in favor of the assessee, emphasizing that the approval should relate back to the date of the application, and no costs were awarded based on the circumstances of the case.