Treaty relief for foreign employment income survives absent Tax Residency Certificate where DTAA entitlement is otherwise proved.

Treaty relief under Article 15(1) of the India-Austria DTAA could not be denied merely because an Austrian Tax Residency Certificate was not produced, as section 90(4) of the Income-tax Act, 1961 could not be applied rigidly to override otherwise established treaty entitlement. On the facts, the salary and foreign allowance were attributable to services rendered outside India, and receipt in India did not change the DTAA position. The assessee, a non-resident, was therefore entitled to exemption under the treaty, and the addition made on salary income and foreign allowance was unsustainable.

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Issues: Whether exemption under Article 15(1) of the India-Austria DTAA could be denied for want of an Austrian Tax Residency Certificate and for alleged failure to prove that the salary and foreign allowance were received outside India for services rendered outside India.

Analysis: The assessee was a non-resident in India and claimed treaty relief on salary income attributable to employment exercised in Austria. The dispute turned on whether non-production of a Tax Residency Certificate, by itself, could defeat the treaty benefit. The Tribunal followed its coordinate bench view that the requirement under section 90(4) of the Income-tax Act, 1961 cannot be applied so rigidly as to override the treaty benefit where the assessee otherwise establishes entitlement to relief. It also held that, on the facts, the salary and foreign allowance related to services rendered outside India, and the place of receipt in India did not alter the tax position under the DTAA.

Conclusion: The assessee was entitled to exemption under Article 15(1) of the India-Austria DTAA, and the addition on salary income and foreign allowance was not sustainable.

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