Sankar Prasad Mitra, C.J.
1. This is a reference under Section 236(1) of the I. T. Act, 1961. The respondent is not appearing. Since the question involved is a matter of first impression, we requested Mr. R.N. Bajoria to appear before us as amicus curiae to assist the court. At the outset we express our gratitude to Mr. Bajoria and his learned junior, Mr. Samir Chakraborty, for the assistance they have given to this court in interpreting the relevant provisions of the Act.
2. The assessee is a technician employed by M/s. Breco Ropeways Ltd. who are represented in India by M/s. Gillanders Arbuthnot & Co. Ltd.
3. The assessee came to India on August 22, 1961, as a technician within the meaning of Section 10(6)(vii)(b) of the Act.
4. It is convenient at this stage to set out the entire provisions of Section 10(6)(vii) in order that we may properly appreciate the views taken by the respective tax authorities. Section 10(6)(vii) runs thus:
'Incomes not included in total income.--In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included--......
(vii) the remuneration due to or received by him chargeable under the head 'Salaries' for services rendered as a technician in the employment (commencing from a date before the 1st day of April, 1971) of the Government or of a local authority or of any corporation set up under any special law or in any business carried on in India, if he was not resident in any of the four financial years immediately preceding the financial year in which he arrived in India to the extent mentioned below-
(a) where his contract of service is approved by the Central Government before the commencement of his service or within one year of such commencement-
(i) in the case of a technician who has special knowledge and experience in industrial or business management techniques, such remuneration due to or recived by him during the period of six months commencing from the date of his arrival in India ;
(ii) in the case of any other technician, such remuneration due to or received by him during the thirty-six months commencing from the date of his arrival in India, and where any such person continues with the approval of the Central Government obtained before the 1st day of October of the relevant assessment year to remain in employment in India after the expiry of the thirty-six months aforesaid and the tax on his income chargeable under the head 'Salaries' is paid by the employer to the Central Government [which tax in the case of an employer being a company may be paid notwithstanding anything contained in Section 200 of the Companies Act, 1956 (1 of 1956) ], the tax so paid by the employer for a period not exceeding sixty months following the expiry of the thirty-six months aforesaid;
(b) in any other case, not being the case of a technician who has special knowledge and experience in industrial or business management techniques, such remuneration due to or received by him for the period of three hundred and sixty-five days in all commencing from the date of his arrival in India... '
5. The ITO interpreted Section 10(6)(vii)(b) to mean that the assessee's remuneration was exempt from tax for a period of 365 days from the date of his arrival in India. During the previous year relevant to the assessment year 1963-64, the assessee was in India from March 8, 1963, to March 31, 1964. Since this period fell outside the period of 365 days, the ITO taxed the salary income earned in India for these 24 days without giving him the benefit as asked for under Section 10(6)(vii)(b). Similarly, the ITO denied exemption to the assessee for the assessment years 1964-65 and 1965-66.
6. Before the AAC, it was contended that the assessee was entitled to exemption from income-tax for a total period of 365 days, in all, from the date of his arrival and that it was not necessary that his stay for 365 days should have been a continuous and uninterrupted stay. It was next contended that the words in the Act are to the effect that exemption is available for remuneration due to or received by the technician for a period of 365 days, in all, commencing from the date of his arrival in India. Considerable emphasis was placed on the words 'in all'. These words, it was submitted, meant that the exemption would be available whether the stay for 365 days of the assessee in India was continuous or not. The assessee stayed in India for a period of 58 days in the assessment year 1962-63 and the remuneration earned by him for that year has been exempted. The assessee was, therefore, entitled to a further exemption for 307 days in all. This remuneration which the assessee received for 24 days in the assessment year 1963-64 was, therefore, held by the AAC to be exempted under Section 10(6)(vii)(b).
7. For the assessment year 1964-65, the assessee was in India for 214 days. For the assessment year 1965-66, he was in India for 69 days.
8. The AAC, on these facts, concluded that the assessee should have been exempted for the assessment years 1963-64 and 1964-65 completely and was liable to be taxed for the remuneration received from the 9th June onwards for the assessment year 1965-66.
9. The AAC, therefore, allowed the assessee's appeals for the assessment years 1963-64 and 1964-65. For the assessment year 1965-66, the appeal was partly allowed.
10. Before the Tribunal the department placed the details of the assessee's stay in India which were as follows:
' 15-5-57 to 30-5-5715 days22-8-61 to 18-10-6157 days8-3-63 to 7-8-63153 days20-8-63 to 10-10-6331 days11-3-64 to 7-6-6489 days
365 days. ' (sic)
11. The departmental representative, arguing the case before the Tribunal, laid emphasis on the word 'the' before the word 'period' in Section 10(6)(vii)(b). He argued that the period should be taken as meaning 'sufficiently identified'. The assessee, on the other hand, argued that exemption should be made available to the assessee so long as the period of stay does not exceed in the aggregate 365 days. The Tribunal considered the scope and effect of the entire Section 10(6)(vii)(b) and observed as follows :
'Two conditions are necessary before a technician can be exempted from income-tax under this section. Firstly, there is a supervening condition that he must not be resident in any of the financial years immediately preceding the financial year in which he arrived in India. This condition is applicable to all the concessions given in Sub-clauses (a) and (b) of Section 10(6)(vii). This condition is imposed with a view to preventing the foreigners from taking advantage of the concessions for more than the specified time. The second condition is that the assessee's stay in India must not have amounted to 365 days, whether it be continuous or broken, Even if there are broken periods of stay, the assessee would get the concession only for a limited period in view of the overall supervening condition imposed by the main Section 10(6)(vii) and as referred to above. The fears of the department, therefore, that the foreigners would get away with this concession for an indefinite period of time under Section 10(6)(vii)(b) are all ill-founded even if the concession in Section 10(6)(vii)(b) is made applicable to the case of broken periods of stay not aggregating to more than 365 days. According to a salutary principle of construction, it would only be right to make a presumption against redundancy of words used in a statute. The Words 'in all' appearing in Section 10(6)(vii)(b) cannot be treated as mere surplusage as contended for by the departmental representative. The departmental representative refers to Section 10(6)(vii) where the concession exceeds in the aggregate a period of 90 days in the previous year.
We are indeed not shut out from considering the purport or tenor of the other sections of the Act but it would indeed be hazardous to ignore the specific words in the section under dispute and interpret it solely in the light of other sections. As stated earlier, even the purpose for the rationale behind the grant of concession under Section 10(6)(vii)(b) is not violated in any manner by putting the words 'in all' in their proper perspective and as including the broken periods of stay. Much has been made by the departmental representative of the article 'the' before the word 'period'. In our opinion, 'the' would still take in the aggregate of broken periods of stay as we have to harmoniously interpret the various words used in the section. It is not possible to ignore the words 'in all' and go merely by the dictionary meaning of the word 'the' even if we interpret the period to include the aggregate of broken periods. We, therefore, hold that the Appellate Assistant Commissioner interpreted the sub-section rightly.'
12. The Tribunal dismissed the departmental appeals for 1963-64, 1964-65 and 1965-66. The Tribunal's main order was passed for the assessment year 1963-64. For the other years, it followed its decision for the year 1963-64.
13. In the instant case, both the parties treated the 22nd August, 1961, as the date of the first arrival of the assessee as a technician in India. Thefurther proceedings took place on that basis. In effect the period of 1 5 days' stay in 1957 by the assessee was ignored by both the sides for taxation purposes.
14. The Tribunal has referred to this court the following question :
' Whether, on the facts and in the circumstances of the case and on a correct interpretation of Section 10(6)(vii)(b), the assessee was entitled to exemption from tax for the assessment years 1964-65 and 1965-66 '
15. Mr. Suhas Sen, learned counsel for the department, has argued before us that Section 10(6)(vii) deals with 'salaries' of foreign technicians. These salaries are exempted from payment of tax on certain conditions, namely, (1) the assessee must not be a citizen of India ; (2) he was not a resident in any of the four financial years immediately preceding the financial year in which he arrived in India; and (3) the remuneration must be chargeable under the head 'Salary'.
16. The duration of the remuneration, according to Mr. Sen, is for the period of 365 days in all. This period of exemption must commence from the date of arrival in India for the period of 365 days in all. In other words, the period must be an unbroken period commencing from the date of arrival.
17. Learned counsel has relied on two English decisions in support of his argument to establish that when in a document or in a statute the word 'period' is used, a continuous period is meant. His first case is In re Marryat (deceased): Westminster Bank Ltd. v. Hobcroft [1948] 1 All ER 796 (Ch D). A testator, by his will dated December 19, 1938, provided in Clause (12) as follows (p. 797):
' I bequeath to each employee of Marryat & Place, Ltd.......who shallhave been in the service of such company at my death for a period of 5 years and upwards and shall not then be under notice given by them or by the company to quit such service the sum of 10 for each year of such service in excess of 5 years but not exceeding in any event in any one case a legacy of 200.'
18. In construing the above provision of the will, Jenkins J. has held, inter alia, that the words ' a period of 5 years ' meant a continuous period of 5 years and not an aggregate of lesser period amounting to 5 years.
19. The other case on which Mr. Sen relied was a case in which the word 'period' was not there. This was In re Bedford (deceased): National Provincial Bank Ltd. v. Aulton [1951] 1 All ER 1093 (Ch D). By Clause (4) of his will dated December 31, 1947, a testator who died on October 15, 1948, gave ' to each co-director of mine of John Bedford & Sons, Ltd....... andalso to each member of the staff of such company who shall have at my death had not less than five years' service with that company a sum representing three months' salary and emoluments at the rate payable to him orher at the date of my death and to each co-director and member of the staff of the same company who shall have had less than five years' service at my death a sum representing one month's salary and emoluments as aforesaid.'
20. Danckwerts J. had held that, 'on the true construction of the will, the period of 5 years' service need not be a continuous period and service with the company for periods aggregating 5 years was sufficient qualification for the larger legacy, but, as the qualification required service for the relevant period and not only employment, a period of war service with His Majesty's Forces, during which period the company had resolved in certain circumstances to pay to employees serving with the forces half of their salaries, could not be taken into account.'
21. On the basis of these two judgments learned counsel for the department has submitted to us that when the word 'period' is used it always means a continuous and uninterrupted period. Broken periods cannot be taken into consideration to mvake a whole period.
22. We must remember that these two judgments of English courts were delivered in connection with interpretation of two different clauses of two wills and the courts were mainly concerned with ascertaining the wishes or the true intention of the testator. The principles laid down in these cases cannot strictly be applied to the case before us.
23. Before we proceed any further it may be interesting to ascertain the purpose of enacting Section 10(6)(vii). In the Report of the Taxation Enquiry Commission, 1953-54, Vol. II, in paragraph 16, at page 30 it was, inter alia, stated :
' We consider that some concessions should also be granted to foreign technicians employed by concerns which carry on business in India. Any loss of revenue which might be caused through such concessions would, in our opinion, be more than counter-balanced by the resultant encouragement to the industrial development of the country. We would recommend that the income of a foreign technician during the year in which he arrives in India should be completely exempted from income-tax and super-tax in this country. His income in the second year should also be completely exempted, if the total period of his stay in India is not more than 365 days. If, however, the period of stay exceeds 365 days, he should be charged to tax on the income of the second year either as a non-resident or as a resident, according to the application of the normal law.'
24. The recommendation, therefore, of the Taxation Enquiry Commission was that a foreign technician should be given an exemption from payment of income-tax on salaries earned by him for a total period of 365 days from the date of his arrival in India whether those 365 days fall within one financial year or more than one financial year. Any salary earned beyondthis total period of 365 days should, according to the recommendation, be subject to taxation.
25. In the context of the above recommendations, we have to consider the history of this particular piece of legislation. The opening words of Section 10 indicate that the exemption is sought to be given to income. This section does not deal with the status of the individual but his income. The Finance Act of 1955 introduced Section 4(3)(xiva) with effect from the 1st April, 1955. The relevant portion of Clause (xiva) was as under:
'(xiva) Any income chargeable under the head ' Salaries ' received by or due to any person, not being a citizen of India, during the financial year in which he arrived in India and the financial year next following as remuneration for services rendered by him as a technician in any business carried on in India in any case where such person was not resident therein in any of the four financial years immediately preceding the financial year in which he arrived in India :
Provided that where during the financial year of arrival and the year next following, such person has been in India for a period of, or for periods amounting in all to, three hundred and sixty-five days or more, only so much of the income aforesaid as is received by or due 'to him during the financial year in which he arrived in India shall not be included in his total income ;
Provided further that in the case of a person referred to in this clause, whose contract of service was approved by Government before the commencement of his service, this clause shall have effect as if for the words ' and the financial year next following ', the words ' and the two financial years next following ' had been substituted and as if the proviso immediately preceding had been omitted.'
26. The Finance Act of 1956 substituted Clause (xiva) to the 'following effect from the 1st April, 1955 :
'(xiva) Any income chargeable under the head ' Salaries ' received by or due to any person, not being a citizen of India, during the financial year in which he arrived in India and the financial year next following as remuneration for services rendered by him as a technician in the employment of Government or of a local authority or of any corporation set up under any special law or in any business carried on in India, in any case where such person was not resident therein in any of the four financial years immediately preceding the financial year in which he arrived in India:
Provided that where, during the financial year of arrival and the year next following such person had been in India for a period of, or for periods amounting in all to, three hundred and sixty-five days or more, only so much of the income aforesaid as is received by or due to him for a period of three hundred and sixty-five days in all commencing from the date of his arrival shall not be included in his total income :
Provided further that in the case of a person referred to in this clause whose contract of service was approved by the Central Government before commencement of his service this clause shall have effect as if for the words ' and the financial year next following ', the words ' and the two financial years next following ' had been substituted and as if the proviso immediately preceding had been omitted.
Explanation,--' Technician ' means and shall always be deemed to have meant, a person having specialised knowledge in industrial arts and sciences and having experience in industrial practice who is employed in India in a capacity in which such specialised knowledge and experience are actually utilised.'
27. The Finance Act, 1958, changed the Explanation to Clause (xiva) and substituted the following Explanation:
'Explanation.--'Technician' means a person having specialised knowledge and experience in constructional or manufacturing operations, or in mining or in the generation or distribution of electricity or any other form of power, who is employed in India in a capacity in which such specialised knowledge and experience are actually utilised.'
28. We need not make any comment on Clause (xiva) of the Finance' Act of 1955. Before it could be operative it was substituted by Clause (xiva) of the Finance Act of 1956. The Explanation we have quoted above has also been included more or less in the same form in the 1961 Act as well. It should be appreciated that in Section 10(6)(vii) exemption is being given to income due to or received by an assessee which is chargeable under the head 'Salaries'. Both in the previous Act of 1956 and in the Act of 1961, in the relevant provisions, the words 'during' and 'in all' have been used. The dictionary meaning of 'during' is I 'enduring, lasting, continuing, throughout the whole continuance of : in course of' : vide Shorter Oxford English Dictionary, Vol. I, 3rd Edn., page 574.
29. The dictionary meaning of 'in all' is : ' all together ; also in whole ': vide Shorter Oxford English Dictionary, Vol. I, 3rd Edn., page 44.
30. Wherever, therefore, the word 'during' has been used a sense of continuity may have been conveyed. But continuity does not appear to be relevant in considering the expression 'in all'. If the period in which service has been rendered is all together or in whole the same as the period specified in the statute the protection of the statute should be made available to the assessee concerned.
31. Now, in Section 10(6)(vii) exemption is given to 'salaries' due to or received by an assessee chargeable under the head 'Salaries' for servicesrendered. Section 15 of the 1961 Act gives us the meaning of 'salaries'. 'Salaries' may mean-
' (a) any salary due from an employer or a former employer to an assessee in the previous year, whether paid or not;
(b) any salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer though not due or before it became due to him ; and
(c) any arrears of salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer, if not charged to income-tax for any earlier previous year.'
32. In the Explanation to this section it is clearly stated :
' For the removal of doubts it is hereby declared that where any salary paid in advance is included in the total income of any person for any previous year it shall not be included again in the total income of the person when the salary becomes due,'
33. The position, therefore, is that remuneration chargeable under the head 'Salaries' may either be received for the previous year or for the year in question or may also be received in advance. All these remunerations would be charged to income-tax for the year in which they have been received.
34. In Clause (i) of Section 10(6)(vii)(a), the exemption is given to such remuneration due to or received by a technician during the period of six months, commencing from the date of his arrival in India. Here, the Legislature does not use the words ' for the period of six months '. It seems to us that when the Legislature is using the words ' for the period of three hundred and sixty-five days in all ', the Legislature is referring to remuneration for the services rendered for a specified number of days and this expression has nothing to do either with accrual or receipt.
35. In this context, when we try to construe Section 10(6)(vii)(b), we are led to the conclusion that a technician is entitled to exemption of remuneration for the period of 36$ days in all commencing from the date of his arrival in India--whether the said period of 365 days falls within one financial year or more than one financial year. The moment he has received this advantage of exemption any remuneration earned for a period exceeding 365 days would be subject to taxation. On our understanding of Section 10(6)(vii)(b) the Tribunal, it appears, has reached the correct conclusion in the instant case.
36. Our answer to the question referred to us, therefore, is in the affirmative and against the department.
37. We make no order as to costs.
Deb, J.
38. I agree.