Tulzapurkar, J.
1. The question in this reference is whether the income-tax paid by the assessee's employer on behalf of the assessee is liable to be included in the taxable income of the assessee and the controversy centers round the proper interpretation of section 10(6)(vii)(a)(ii) of the Income-tax Act, 1961, which grants some concession in respect of income-tax to foreign technicians taking up employment in India, who fulfil certain conditions.
2. Assessee, Shri E. Hiller, is a foreign technician, who first came to India in November, 1957, as an employee of Hochtief-Gammon (hereinafter referred to as 'M/s. H. G.'). By their letter dated March 4, 1958, the Government of India in the Ministry of Commerce and Industry approved the assessee's appointment with M/s. H. G. for period of three years, i.e., the financial year in which he came to India and the two following years. That period expired in November, 1960, but the assessee continued in service with M/s. H. G. for another year. With effect from October 17, 1961, he became an employee of Hochtief-Modern (hereinafter referred to as 'M/s. H. M.'), a sister concern of M/s. H. G., and this arrangement was also approved by the Central Government by its latter dated 6th March, 1962. Two letters dated March 4, 1958, and March 6, 1962, from the Ministry of Commerce and Industry, under which the assessee's appointment with M/s. H. G. and M/s. H. M. respectively was approved, have been collectively set out as annexure 'A' to the statement of the case.
3. It may be stated that while approving the appointment with M/s. H. G. the Government of India in its letter dated March 4, 1958, stated that the benefit of exemption from payment of income-tax will be available for a maximum period of three years but in the letter dated March 6, 1962, it was stated that the approval would not in any way entitle the assessee to the benefit of exemption from the payment of income-tax.
4. In the material assessments the taxes paid by M/s. H. M. to the Government on behalf of the assessee were included in the total income of the assessee under the head 'Salary' and were assessed. These assessments were confirmed by the Appellate Assistant Commissioner. The Income-tax Officer as well as the Appellate Assistant Commissioner took the view that since the assessee's employer had changed, the assessee would not be entitled to the concession of excluding from the total income taxes paid by the employer. The assessee carried the matter in second appeal to the Appellate Tribunal and a two-fold contention was raised before the Tribunal on behalf of the assessee. In the first place, it was contended that the assessee was continuously under the same employer ever since his arrival in this country. Alternatively, it was contended that even if there was change in the employer, the concession contained in the latter part of section 10(6)(vii)(a)(ii) would be available. On behalf of the department it was pointed out that the assessee could not be said to have served the same employer and strong reliance was placed upon the letter dated March 6, 1962, from the Government of India, which specifically stated that the approval would not in any way entitle the assessee to the benefit of exemption from the payment of income-tax. The Tribunal did not accept the assessee's contention that the assessee was continuously under the same employer but it took the view that the concession provided for in the latter part of section 10(6)(vii)(a)(ii), namely, enjoying a tax-free salary without the liability to have the salary received grossed up to include the tax paid by the employer, was available to the assessee for a period of 24 months after the initial period of 36 months in which complete exemption from tax was enjoyed. Limiting the concession to a period of 24 months, the Tribunal allowed the assessee's contention fully for 1962-63 and for 1963-64 assessment the Tribunal held that the tax paid by the employer up to November, 1962, should be excluded from the assessment. At the instance of the Commissioner of Income-tax the following question has been referred to us for our determination by the Tribunal :
'Whether, on the facts and in the circumstances of the case, and on a proper interpretation of section 10(6)(vii)(a)(ii) the tax paid by the employer was rightly excluded from the total income of the assessee ?'
5. Since the question depends upon the proper interpretation of the relevant provision, it would be desirable to set out the relevant provision on which reliance was placed by the assessee. The relevant part of section 10(6) of the Income-tax Act, 1961, runs as follows :
'10. 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 - ...
(6) in the case of an individual who is not a citizen of India, - ...
(vii) the remuneration due to or received by him chargeable under the head 'Salaries'n for services rendered as a technician in the employment 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...
(i) in 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 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 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) the tax so paid by the employer for a period not exceeding twenty-four months following the expiry of the thirty-six months aforesaid.'
6. On the facts there was no dispute before us that the assessee, who is a foreign technician, had fulfilled all the conditions mentioned in sub-section (6) of section 10. In other words, it was not disputed that the assessee had received remuneration under the head 'Salaries' for the services rendered as a technician in the employment of a corporation set up under any special law or in any business carried on in India, that he was not a resident in any of the four financial years immediately preceding the financial year in which he arrived in India and that both the contracts of his service - one with M/s. H. G. and the other with M/s. H. M. - were approved by the Central Government before the commencement of his service. It is apparent from the first part of section 10(6)(vii)(a)(ii) that the assessee as a foreigner was clearly entitled to complete exemption conferred thereby in respect of remuneration received him during the period of 36 months commencing from the date of his arrival in India. The question in dispute is whether during the 24 months which followed after the expiry of the initial period of 36 months the assessee as a foreign technician is entitled to the benefit of exemption granted by the latter part of section 10(6)(vii)(a)(ii). The contention of Mr. Joshi appearing for the revenue has been that under the latter part of section 10(6)(vii)(a)(ii) what is required is that such foreign technician should during the next 24 months continue to remain in employment in India after the expiry of the initial period of 36 months and the expression 'continues to remain in employment in India' must mean, that the assessee must continue to remain in the same employment, that is, must be in service of the same employer, and since in the instant case the assessee had taken up employment, though with the approval of the Central Government, with M/s. H. M., a concern different from Messrs. H. G., the assessee could not fall within the beneficial provision aforesaid. He pointed out that the Tribunal has not accepted the assessee's contention that he was continuously under the same employer and in view of this finding that was recorded by the Tribunal, the Tribunal ought to have disallowed the concession sought by the assessee under section 10(6)(vii)(a)(ii). If the latter part of section 10(6)(vii)(a)(ii) is carefully scrutinised it appears to us that there is no warrant to interpret the expression 'continues to remain in employment in India' occurring therein as 'continues to remain in the same employment in India'. Mr. Joshi referred us to the Finance Minister's Budget speech made in the context of the amendment that was introduced in the relevant provision contained in section 10(6)(vii)(a) and he pointed out that in that speech the Finance Minister had stated thus :
'The period of tax exemption for foreign technicians, where contracts of service have been approved by the Central Government varies between 24 and 36 months at present. It is proposed to make such exemption available for a uniform period of 36 months. Further, if after this period of thirty-six months, the technician's services are retained in India and the employer pays tax on the technician's salary, the amount paid as tax by the employer will not be treated as part of the employee's income.'
7. He laid considerable stress on the aspect which was made clear by the Finance Minister in his speech that the concession when it was sought to be extended for a further period of 24 months after the expiry of the initial period of 36 months, the same was intended to be extended only if 'the technician's services are retained in India and the employer pays tax on the technician's salary'. He urged that the concept of retention of the technician's services spoken of by the Finance minister was inserted in the relevant provision by using the expression 'continues to remain in employment in India'. According to him, retention of service or continuous service means service under the same employer during the period of 24 months after the expiry of the initial period of 36 months. It is not possible to accept this contention of Mr. Joshi for the simple reason that neither in the Finance Minister's speech nor in the relevant provision, which is to be found in the latter part of section 10(6)(vii)(a)(ii) has it been anywhere indicated that the retention of service should be with the same employer. Strictly speaking, we are concerned with placing proper construction on the expression 'continues to remain in employment in India' occurring in the latter part of section 10(6)(vii)(a)(ii). All that is conveyed by the expression is that foreign technician must continue to render his services by remaining in employment in India for 24 months next after the expiry of the initial period of 36 months. If the intention was to confer the benefit of exemption only upon such technicians who continued with the same employer during the next 24 months after the expiry of the initial period of 36 months, the legislature could have easily stated so. On the other hand, in the relevant expression 'continues to remain in employment in India' the definite article 'the' is missing before the word 'employment and in the absence of any such pointer, it would be difficult to construe the expression as meaning 'continues to remain in the same employment in India.'In fact, it seems to us clear that even under the first part of section 10(6)(vii)(a)(ii) a foreign technician would be entitled to complete concession or exemption conferred thereby even if within the initial period of 36 months he were to change his employer more than once, the only condition being that his contracts of employment with such employers during that period should have been approved by the Central Government before he commences his service with each successive employer. The object of the enactment is to attract and make available to our industry the special knowledge and experience of foreign technicians and this object is sought to be achieved by conferring the benefit of tax exemption to such foreign technicians not only during the initial period of 36 months but also for the next 24 months provided the advantage of their special knowledge and experience is continuously available here during the said periods through approved contracts of employment. It is, therefore, not possible to accept the contention of the revenue that the assessee was not entitled to the concession conferred by the latter part of section 10(6)(vii)(a)(ii) simply because he did not continue to remain in the same employment or under the same employer in India. So long as he fulfilled the conditions indicated in the other parts of the section and particularly when his contract of employment with M/s. H. M. was approved by the Central Government as required, the assessee, in our view, was entitled to the concession conferred by the latter part of section 10(6)(vii)(a)(ii). It is true that while granting approval to the assessee's employment with M/s. H. M. the Government in its letter dated March 6, 1962, stated that the approval would not in any way entitle him (assessee) to the benefit of exemption from the payment of income-tax, but such as statement contained in the Government's letter dated March 6, 1962, would be ineffective, if, in law, on a proper interpretation of the relevant provision of the enactment, the assessee was entitled to the concession contained therein.
8. In the result, the question is answered in the affirmative and in favour of the assessee. Revenue will pay the costs of the reference.