The technical or professional qualification required by the proviso to s. 64 (1) (ii) of the Income Tax Act, 1961, does not necessarily have to be a formal qualification awarded by a recognized body, but can also include knowledge and experience.

( 1 ) THE following question of law has been referred this court by the Income-tax Appellate Tribunal under s. 256 (1) of the I. T. Act, 1961 (for short "the Act") :"whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in holding that the income of the assessees husband is includible in the assessment of the assessee under s. 64 (1) (ii) of the Act ?"

( 2 ) THIS reference relates to the income-tax assessment year 1976-77. The assessee, Smt. Batta Kalyani, runs a hardware and paint shops. She employed her husband, B. Venkataramaiah, to manage the business paid him salary for services rendered. There is no dispute that the business is carried on by the assessee as a sole proprietress. The ITO included in the total income of the assessee, the salary paid by the assessee to her husband by applying the provisions of s. 64 (1) (ii) of the Act. It may be relevant to extract the same :" (1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly -. . . . . (ii) to the spouse of such individual by way of salary, commission, fees or any other form of remuneration whether in cash or in kind from a concern in which such individual has a substantial interest : Provided that nothing in this clause shall apply in relation to any income arising to the spouse where the spouse possesses technical or professional qualifications and the income is solely attributable to the applications of his or her technical or professional knowledge and experience. "

( 3 ) THE ITO held that the assessees husband who was employed manage the business did not possess any technical or professional qualification and the income delivered by the assessees husband was not solely attributable to the application of the technical or professional knowledge and experience of the assessees husband. In that view, ITO came to the conclusion that the proviso to s. 64 (1) (ii) has no application to the facts of the present case. The assessee appealed to the AAC, who allowed the assessees appeal, holding that the sum paid by way of salary to the assessees husband is governed by the proviso to s. 64 (i) (ii) of the Act and, consequently, the salary paid to the assessees husband was not liable to be included in the total income of the assessee. The ITO appealed to the Appellate Tribunal against the order of the AAC. The Tribunal allowed the ITOs appeal. In allowing the appeal, the Tribunal came to two conclusions : (a) that the proviso to s. 64 (1) (ii) of the Act can have no application unless the technical or professional qualifications relate to the qualification awarded by a recognised body; (b) there was also no evidence in the present case to show that the income earned by the assessees husband was solely attributable to the application of technical or professional knowledge and experience. In the above view, the Income-tax Appellate Tribunal reversed the order of the AAC and upheld the ITOs inclusion in the assessees income under s. 64 (1) (ii) of the salary paid to her husband. The assessee asked for and obtained this reference under s. 256 (1) of the Act.

( 4 ) SRI. M. J. Swamy, learned counsel for the assessee, has raised a two fold plea before us. Firstly, he urged that the Tribunal was in error in considering that the technical or professional qualification for purposes of the proviso above referred to should necessarily relate to a degree, diploma or other certificate issued by a recognised body. Learned counsel submitted that the proviso did not contain any requirement that the technical or professional qualification is referable to the conferment of such qualification by a recognised body. It is submitted that if a person possesses technical or professional knowledge, that itself is an attribute of qualification. Learned counsel reinforced the submission by reference to the latter part of the proviso which referred to the professional knowledge an