- (1.)THE applicant, Mr. Vance Robert Heffern, is a citizen of the USA. He is employed with ALLTEL Information Services International Holding Inc. ('AISIH'). The employer -company had deputed him to India as a Telecom Manager at ALLTEL Information (India)(P.) Ltd (AIPL) which is a wholly -owned subsidiary of ALLTEL Information Services Inc. USA ('AIS'). AIPL is engaged in the business of developing and providing telecommunication services in India. It has entered into an Operational Support Services agreement ('OSS') with Hughes Ispat Ltd. (HIL), an Indian company, which has been awarded a contract for rendering telecommunication services in the Maharashtra Telecom Circle. Under the OSS agreement, the following services would be rendered by AIPL: * Systems integration; * Development of software; * Maintenance of software supplies sourced from both AIS and third party vendors; * Information Services; * Disaster recovery; and * Sub -contractor management. The applicant is in India to assist AIPL in discharging its obligations under the OSS agreement. The applicant has presented this application under section 245Q(1) of the Income -tax Act, 1961 ('the Act'), seeking ruling of this authority on the following questions: (i) Whether the applicant will qualify as a 'technician' in accordance with section 10(5B) of the Act; and accordingly. (ii) Whether, the taxes paid by the employer of the applicant would be exempt from taxation under section 10(5B) for a period of forty -eight months commencing from the date of arrival in India. According to the applicant, he qualifies to be regarded as a 'technician' in terms of clause (iii) of the Explanation to section 10(5B), read with Notification No. , dated 27 -7 -1993 issued thereunder and entitled to the benefit of exemption as contemplated by that section.
(2.)THE applicant's total stay in India during the financial year 1977 -78 was 38 days. He was, therefore, not resident in India during the financial year 1997 -98 under section 6, read with section 2(30) of the Act which precedes the financial year 1998 -99, during which the application was filed. It may also be mentioned here that though his deputation to India commenced from 1 -4 -1998, the applicant first arrived in India on 11 -2 -1998. Further, he was not resident in India within the meaning of section 6(1) of the Act, during any of the financial years 1993 -94, 1994 -95, 1995 -96 and 1996 -97. As per the agreement dated 10 -11 -1998, entered into with the applicant, the employer -company (AISIH) has undertaken to bear all Indian taxes arising on the compensation to be paid to the applicant for his services in India.
(3.)AN individual claiming exemption under section 10(5B) must satisfy the following four conditions: (i) He must be a "technician" as defined in the Explanation; (ii) He must be in employment of one of the several entities set out in the clause or in any business carried on in India; (iii) He must not have been resident in India in any of the four financial years immediately preceding the financial year in which he arrived in India; and (iv) The taxes on his salary income should be paid by the employer. In the present case, there is no dispute that conditions (ii), (iii) and (iv) are fulfilled and the only issue requiring examination is as to whether the applicant qualifies as a 'technician'. For the purpose of sub -section (5B) of section 10, 'technician' means a person having specialised knowledge and experience in any of the areas mentioned against clauses (i) to (iii) of the Explanation to that section. Further requirement is that he must be employed in India in a capacity in which such specialised knowledge and experience are actually utilised. Notification No. (E), dated 27 -7 -1993 issued in terms of the aforesaid clause (iii), specifies the field of' Information Technology including computer architecture systems, platforms and associated technology, software development process and tools' as being covered under section 10(5B) of the Act. Therefore, the point for consideration before the authority is whether the applicant can be said to be a person having specialised knowledge and experience in the aforesaid field. This also involves a consideration of the nature of the operations which the applicant will carry out during the period of his assignment in India so as to judge whether his specialised knowledge and experience are actually utilised in his employment in India.
The applicant is an employee of AISIH which specialises, inter alia, in provision of telecommunication related services and has the necessary resources to provide specialised personnel. Even though AIPL is also engaged in the business of developing and providing telecommunication related services, it being a newly incorporated company, was in need of specialists to assist itself in carrying on its business efficiently. Therefore, AIPL entered into an agreement for deputation of specialists with AISIH, as a result of which the applicant has been seconded to AIPL as Telecom Manager to assist AIPL in rendering services to HIL as agreed upon under the OSS agreement. The applicant has filed a detailed resume outlining his qualifications and experience. But he did not produce any certificate regarding his educational qualifications. He stated that he had not brought the certificates along with him while coming to India and it was not practically feasible to presently access the same. However, it is stated that he graduated from the Meadville Area School in 1977 and filed an affidavit as a proof of his educational qualifications. It may be stated here that the fact that the applicant has not been able to produce the certificate in support of his educational qualification will not be destructive of his case. Further, even if it is found that he does not have any technical education, he cannot be held disentitled for being regarded as a 'technician' within the meaning of section 10(5B). In the case of Shane G. Montgomery [AAR No. 283 of 1996], where the educational certificates were not available, this Authority has held that, if it can be established that the specialised technical knowledge and past experience of the applicant were actually utilised in India, the applicant would be entitled to the benefit of exemption contemplated under section 10(5B). In Advance Rulings P. No. 25 of 1996, In re, [1999] 104 Taxman 372 (AAR), where the applicant did not receive any technical education from any recognised body, this Authority has taken the view that lack of formal education cannot be regarded as a disqualification for treating the applicant as a "technician", as it is of the considered view that "special knowledge may be obtained either by education or by special experience".