2006 (12) TMI 174 - AT - Income Tax

Issues Involved:
1. Exemption under Section 10(5B) of the Income-tax Act, 1961.
2. Definition and scope of "Information Technology" under the Notification No. S.O. 569(E), dated 27-7-1993.
3. Residential status of the assessee.
4. Qualification as a "technician" under Section 10(5B) of the Income-tax Act, 1961.

Detailed Analysis:

1. Exemption under Section 10(5B) of the Income-tax Act, 1961
The primary issue revolves around the assessee's claim for exemption under Section 10(5B) of the Income-tax Act, 1961. The Assessing Officer disallowed the exemption, which was confirmed by the CIT(A). The CIT(A) observed that the assessee's specialization in telecommunication technology did not fall under the specified fields in the Notification No. S.O. 569(E), dated 27-7-1993, which includes "Information technology including computer architecture systems, platforms and associated technology, software development process and tools."

2. Definition and Scope of "Information Technology" under the Notification No. S.O. 569(E), dated 27-7-1993
The CIT(A) held that telecommunication technology and information technology are distinct fields and that the former is not covered under the specified fields for exemption under Section 10(5B). However, the Tribunal disagreed, citing definitions from the Oxford Dictionary and Longman's Dictionary, which include telecommunications within the scope of information technology. Additionally, the Tribunal referred to rulings by the Authority for Advance Rulings (AAR) in the cases of Vance Robert Heffern v. CIT and David Kenneth White v. CIT, which held that cellular telecommunication networks fall within the purview of information technology.

3. Residential Status of the Assessee
The Tribunal noted that the CIT(A) did not consider the issue of the assessee's residential status, which is a condition for exemption under Section 10(5B). The matter was remanded to the Assessing Officer to examine whether the assessee was not resident in India in any of the four financial years immediately preceding the financial year in which he arrived in India.

4. Qualification as a "Technician" under Section 10(5B) of the Income-tax Act, 1961
The CIT(A) acknowledged that formal technical qualification certificates might not be necessary, as per precedents like V.R. Heffern v. CIT and Shane G. Montgomery (AAR No. 283 of 1996). The Tribunal further emphasized that the assessee's specialized knowledge and experience in wireless telecommunication (field operations) and his role in setting up and commissioning cellular network systems in India qualified him as a "technician" under Section 10(5B).

Conclusion:
The Tribunal set aside the CIT(A)'s order, holding that the assessee's specialization in telecommunication technology falls within the scope of "information technology" as per the definitions and AAR rulings. The matter was remanded to the Assessing Officer to verify the assessee's residential status. If the assessee satisfies this condition, the exemption under Section 10(5B) should be granted. The appeal was allowed for statistical purposes.

← Previous Next →