Prakash Krishna, J. - (1.) The Tribunal, New Delhi, has referred the following two questions of law under Section 256(1) of the IT Act, 1961 (hereinafter referred to as the Act), for opinion to this Court: 1. Whether the Tribunal was right in law in holding that the notification issued on 31st March, 1983, which extended the applicability of the IT Act to the Continental Shelf of India was applicable for the accounting period commencing from 1st April, 1983?
(2.) Whether the Tribunal was right in law in holding that the notification of extension of the IT Act to the Continental Shelf not being applicable for the asst. yr. 1983-84, the salary paid to the assessee for the lay off period outside India was not chargeable under Section 9(1)(ii) of the IT Act, 1961? 2. Briefly stated, the facts giving rise to the present reference are as under: The reference relates to the asst. yr. 1983-84. The respondent-assessee is an employee of M/s Brown & Root Int. Inc., a nonresident company, which entered into a contract with Oil & Natural Gas Commission, a Government of India undertaking, in connection with extraction of oil, gas, etc. from the oil rigs in the Bombay High Seas. The contract of employment of the assessee with the aforesaid non-resident company provided that the employee shall after working for 28 days in the oil rig get lay off period of 28 days. The salary was to be paid to such employees by the Indian company, namely, ONGC for the day they worked in the oil rig and also for the days they were given lay off. Before the AO, a contention was raised on behalf of the assessee that since no service was rendered by the assessee in India, no income-tax liability could be fastened on him. It was further submitted that the extension of the IT Act to the Continental Shelf of India was made from 1st of April, 1983, by means of a notification dt. 31st March, 1983. The intention of the notification was that the extension of the IT Act to the Continental Shelf would apply in respect of the accounting period starting from 1st April, 1983. On this basis, it was submitted that the services that were rendered in oil rigs in the Bombay High Seas could not be said to be the services rendered in India. However, this contention was not accepted by the AO, who was of the opinion that in view of the notification dt. 31st of March, 1983, by which the IT Act was extended to the Continental Shelf of India w.e.f. 1st of April, 1983, implies that the income earned by an assessee in the Continental Shelf for the accounting period relevant to the asst. yr. 1983-84 would be subject to the Act. The matter went to the Tribunal in second appeal at the instance of the assessee. The Tribunal following its earlier orders in respect of the similarly situated assessees set aside the assessment order on the finding that the notification of the Government of India, dt. 31st of March, 1983, issued under Section 6(6) r/w Section 7(7) of the Territorial Zones Act, 1976, will apply only to such incomes earned on or after 1st of April, 1983.
(3.) Heard the learned standing counsel for the Revenue. Nobody has appeared on behalf of the respondent-assessee.;