TMI Blog1995 (8) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... rica. He is employed in India by Verifone India Private Limited (hereinafter referred to as VIPL ). The applicant is stated to have had considerable work experience in the area of Software Development. He has served for about 25 years with various companies in the United States and Europe and claims to have gained immense experience in technical management of hardware/software development relating to the Point of Sale Industry in United States and Europe. The details of his work experience include : three years with the U. S. Government as system programmer and project manager, four years in RCA computer division on various RCA computer systems, two years with Sperry Univac, and four years with ICL in Europe. The applicant has been employed with Verifone Inc. of U. S. A., since May, 1992. He came to India for the first time on November 1, 1992. His stay in India during the financial year 1992-93 was for 14 days and in 1993-94 was for 137 days. Thus, the applicant was a non-resident in India during the above financial years and earlier. Verifone India Private Limited, it is stated, was promoted by Verifone Inc., U. S. A. in 1990 for development and export of computer software. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rises on the language of section 245N(b) of the Act. Read with section 245Q(1), this provision requires that a person making an application to the Authority under the Act should be a non-resident . On the definition contained in section 2(30) of the Act, as applicable to the present case, a non-resident is a person who is not a resident under section 6(1) of the Act in so far as it is relevant for our present purposes. An individual is said to be a resident in India in any previous year, if he- (a) is in India in that year for a period or periods amounting in all to 182 days or more ; or . . . . (c) having within four years preceding that year been in India for a period or periods amounting in all to 365 days or more, is in India for a period or periods amounting in all to 60 days or more in that year. While section 245N stipulates that only a non-resident can make an application under Chapter XIX-B, it does not say in specific terms that it should be a non-resident as on the date of the application. In fact, it could not say so. As will be seen from the definition set out earlier, conceptually, residence or non-residence for the purpose of the Act has to be determine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll cases to predict with reasonable accuracy whether the stay of the applicant in India during that financial year will exceed 182 days or not. In other words, it will be difficult to determine the residential status of the applicant with reference to the previous year of the date of application. It should be borne in mind that the expression previous year should be so construed as to be applicable uniformly to all cases. It cannot be said that a previous year should be taken as the financial year in which the application is made provided the stay of the applicant up to the date of the application or the estimated stay of the applicant in India in that financial year exceeds 182 days and that it should be the previous year preceding that financial year in case it is not possible to determine the duration of the stay of the applicant in India in the financial year in which the application is made. It appears more practical and reasonable, for purposes of determining the residential status of an applicant under section 245Q, to look at the position in the earlier previous year, i.e., the financial year immediately preceding the financial year in which the application is made. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Authority is precluded from dealing with the application in view of the mandate contained in the proviso to section 245R(2). At first sight and on a cursory reading of the above proviso, it might appear that the Authority will have to reject the application as the question sought to be raised before the Authority is already pending i.e., pending as on the date of the hearing and disposal of the application. But this, on second thoughts, would be seen to be not a tenable view. The date on which the Authority hears the application and the date on which it disposes of application may not be the same and the maintainability of the application cannot be made to depend on the pendency of the issue before the income-tax authorities on varying dates. It would appear more correct and practical to construe the embargo as applicable to cases where, while the issue is already pending before the income-tax authorities, the Appellate Tribunal or any court, the applicant also seeks recourse under section 245Q. Having already availed himself of the remedies available under the Act, the Legislature understandably requires that an applicant should not be encouraged to have recourse to another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter XIX-B for no good reason because he will, invariably, be compelled or constrained to file a return and make his claim in the regular assessment proceedings as well if he wishes to keep such claim alive. The words already pending should, therefore, be interpreted to mean : already pending as on the date of the application and not with reference to any future date. In the present case, since there was no return or claim before the authorities before the application was filed before this Authority, the application cannot be rejected by invoking clause (a) of the proviso to section 245R(2). Turning now to the questions posed in the application, the answer to them depends on the provisions of section 10(5B) of the Act. That provision reads as follows : (5B) in the case of an individual who renders services as a technician in the employment (commencing from a date after the 31st day of March, 1993) of the Government or of a local authority or of any corporation set up under any special law or of any such institution or body established in India for carrying on scientific research as is approved for the purposes of this clause or sub-clause (viia) of clause (6) by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... logy including computer architecture systems, platforms and associated technology, software development process and tools. On the facts as stated, though no information has been furnished as to the precise academic as well as educational qualifications or degrees taken by the applicant, there can be no doubt that the applicant has vast knowledge and wide experience in the field covered by item (iii) of the above notification which is being availed of, with profit, by VIPL in its Indian business. The second question has, therefore, to be answered in the affirmative. Turning now to the first question, it will be seen that an assessee is entitled to exemption under section 10(5B) provided the following conditions are fulfilled : (i) He is an individual who was non-resident in India in all the four financial years immediately preceding the financial year in which he arrived in India ; (ii) He is rendering service as a technician ; (iii) His employment commences from a date after March 31, 1993 ; (iv) He is employed in a business carried on in India ; and (v) The tax on his income for such services chargeable under the head Salaries is paid by the employer. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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