PRAKASH KRISHNA,J. - (1.) THE Income Tax Appellate Tribunal, New Delhi, has referred the following two questions of law under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for opinion of this Court : '1. Whether the Income Tax Appellate Tribunal was legally correct to treat the Continental Shelf to the Exclusive Economic Zone as not forming part of India priorto 1 -4 -1983 for the purpose of Income Tax Act, 1961 ?
(2.) WHETHER the ITAT was justified in holding that the income earned by the respondent -contractor for services rendered prior to 1 -4 -1983 on a rig located in the off -shore areas outside the territorial waters of India, was not chargeable to tax under the Income Tax Act, 1961 for the assessment year 1983 -84 ?' 2. Briefly stated the facts giving rise to the present reference is as under : The reference relates to the assessment years 1982 -83 and 1983 -84. The respondent -assessees are foreign nationals and non -residents. They rendered services on the rigs while they were outside 12 nautical miles limit from the Indian shore. They claimed that salary or remuneration received by them could not be taxed in India as they were earned outside India. The assessing officer brought to their notice Notification issued under sections 6(6) and 7(7) of the Territorial Waters Continental Shelf Exclusive Economic Zone and other Maritime Zones Act, 1976, whereby the Central Government had extended the Income Tax Act to the Continental Shelf and Exclusive Economic Zone of India. The assessees claimed that the Notification was effective from 1 -4 -1983 and, therefore, could not apply to assessment year 1983 -84. The assessing officer, however, held that the salary income was taxable in assessment year 1983 -84.
(3.) IN appeal, the Commissioner (Appeals) held that the assessing officer was not justified in assessing the income of the non -resident -assessees in assessment year 1983 -84 by applying Notification No. GSR -304 (E), dated 31 -3 -1983 retrospectively. He followed the detailed reasons given by him in the case of one of the group cases, namely, Mr. A. Mackenzee C/o M/s. Atwood Oceanic International S.A., Bombay. On further appeal by the revenue, the Tribunal upheld the appellate order and, thus, dismissed the revenue's appeals.;