AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 90
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the appeals under consideration has arisen in the present group of appeals instituted by the Oil and Natural Gas Corporation (ONGC) which has been assessed as a representative assessee within the meaning of Section 160-A of Income Tax Act, 1961. The assessments in question have been made under the provisions of the Companies (Profits) Surtax Act, 1964 (hereinafter referred to as the 'Surtax Act'). 2. The question posing for an answer revolves around the true and correct purport and effect of exemption notification bearing No.GSR 307(E) dated 31.03.1983 issued under Section 24AA of the Surtax Act. For a quick understanding of the question that arise for consideration, the provisions of Section 24-AA of the Surtax Act and the contents of the notification bearing No.GSR 307(E) may be extracted below : "24AA. Power to make exemption, etc., in relation to participation in the business of prospecting for, extraction, etc., of mineral oils. (1) If the Central Government is satisfied that it is necessary or expedient so to do in the public interest, it may, by notification in the official Gazette, make in exemption, reduction in rate or other modification in respect of surtax in favou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 80B of the Income-tax Act, 1961 (43 of 1961); (b) "mineral oil" includes petroleum and natural gas. Notification : GSR No. 307(E), dated 31-3-1983." 3. Section 24-AA of the Surtax Act, as it would appear, vests in the Central Government the power to make exemption, reduction in rate or other modification in respect of Surtax in favour of any class of foreign companies which are specified in sub-section (2), in regard to the whole or any part of the chargeable profits liable to tax under the Surtax Act. Sub-section (2) of Section 24-AA refers to two categories of foreign companies. The first is foreign companies with whom the Central Government has entered into agreements for association or participation, including participation by any authorized person, in any business consisting of the prospecting or extraction or production of mineral oils. The second category of foreign companies mentioned in sub-section (2) is foreign companies that may be providing services or facilities or supplying any ship, aircraft, machinery or plant in connection with any business of prospecting or extraction or production of mineral oils carried on by the Central Government or any authorised person....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... aggrieved representative assessee i.e. the ONGC. 8. We have heard Shri Arvind P. Datar, learned senior counsel appearing for the appellant and Shri Guru Krishna Kumar, learned senior counsel for the Revenue. 9. The respective arguments though have been elaborate the point urged is brief. Shri Datar would contend that as the exemption notification contains/uses the same language as found in sub-section 2(a) of Section 24-AA of the Surtax Act its applicability should be understood with reference to the existence of agreement with the foreign companies rather than the immediate purpose of such agreement, namely, involvement of the Central Government or the authorized person in the business of prospecting or extraction or production of mineral oils. It is further argued by the learned senior counsel that regardless of the fact whether the agreement brings about association or participation of the Central Government or the authorized person in such business of prospecting or extraction or production of mineral oils or such agreement results in rendering of service, so long as the rendering of such service is directly associated with the business of prospecting or extraction or produc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ioner of Income Tax-III Vs. Calcutta Knitwears, Ludhiana(2014) 6 SCC 444. It is the aforesaid principles, extracted below, that will have to be applied to the present case and the correct meaning and purport of the exemption notification has to be determined on the said basis. 20. Section 158-BD of the Act provides for "undisclosed income" of any other person. Before we proceed to explain the said provision, we intend to remind ourselves of the first or the basic principles of interpretation of a fiscal legislation. It is time and again reiterated that the courts, while interpreting the provisions of a fiscal legislation should neither add nor subtract a word from the provisions of instant meaning of the sections. It may be mentioned that the foremost principle of interpretation of fiscal statutes in every system of interpretation is the rule of strict interpretation which provides that where the words of the statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule. (Swedish Match AB v. SEBI and CIT v. Ajax Products Ltd.) 30. In B. Premanand v. Mohan Koikal this Court has observed as follows: (SCC p. 273....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of the notification granting exemption. 30. In Novopan India Ltd. this Court held that a person, invoking an exception or exemption provisions, to relieve him of tax liability must establish clearly that he is covered by the said provisions and, in case of doubt or ambiguity, the benefit of it must go to the State. A Constitution Bench of this Court in Hansraj Gordhandas v. CCE and Customs held that (Novopan India Ltd. case4, SCC p. 614, para 16) "16. ... such a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification i.e. by the plain terms of the exemption." 12. Section 24-....