Non-resident income tax appeal dismissed, computation under section 44BB upheld. Tribunal justified in not referring question of law.

The court dismissed the Income-tax Appeals, upholding the Tribunal's decision that the computation of income for the non-resident assessee should be made exclusively under section 44BB. The court also rejected the reference applications, affirming that the Tribunal was justified in not referring the question of law to the court, as the answer was self-evident from the scheme of the Act and the provision itself.

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Issues Involved:
1. Validity of the Income-tax Appellate Tribunal's order u/s 263.
2. Inclusion of income-tax payable by ONGC on behalf of CGG in the total income u/s 44BB.

Summary of Judgment:

Issue 1: Validity of the Income-tax Appellate Tribunal's order u/s 263
The court examined whether the Income-tax Appellate Tribunal was justified in quashing the order passed by the Commissioner of Income-tax u/s 263. The Tribunal had set aside the Commissioner's order and ruled in favor of the assessee, ONGC, acting as an agent for the non-resident assessee, CGG. The Tribunal's decision was based on the premise that the computation of income for the non-resident assessee should be made exclusively u/s 44BB, which provides a special method for computing profits and gains from the business of exploration of mineral oils, overriding sections 28 to 41 and sections 43 and 43A.

Issue 2: Inclusion of income-tax payable by ONGC on behalf of CGG in the total income u/s 44BB
The court considered whether the amount of income-tax payable by ONGC on behalf of CGG should be included in the total income of the assessee. The Commissioner of Income-tax had directed the Assessing Officer to include the entire receipt of the income-tax payable by the company in India as part of the income from profits and gains of business falling u/s 28(iv). However, the Tribunal upheld the assessee's contention that the computation of income should be made solely u/s 44BB, which includes only 10% of the aggregate amounts specified in sub-section (2) of section 44BB. The court agreed with the Tribunal, stating that section 44BB provides a complete code for computing income from the business of exploration of mineral oils for non-residents, excluding the applicability of section 28(iv).

Conclusion:
The court dismissed the Income-tax Appeals Nos. 67 of 2001, 68 of 2001, and 71 of 2001, upholding the Tribunal's decision that the computation of income for the non-resident assessee should be made exclusively u/s 44BB. The court also rejected the reference applications u/s 256(2), affirming that the Tribunal was justified in not referring the question of law to the court, as the answer was self-evident from the scheme of the Act and the reading of the provision itself.

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