TaxTMI 
TaxTMI 
2005 (12) TMI 62
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....e was not liable to surtax under the Companies (Profits) Surtax Act, 1964, by virtue of exemption available under Notification No. G.S.R. 307(E), dated March 31, 1983 (see [1983] 142 ITR (St.) 88), issued under section 24AA of the Companies (Profits) Surtax Act, 1964 (hereinafter referred to as "the Act"). The question raised in the memo, of appeal is being reproduced as under: "Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was legally correct to hold that the assessee was not liable to surtax under the Companies (Profits) Surtax Act, 1964, by virtue of exemption available under Notification No. G.S.R. 307(E), dated March 31, 1983 (see [1983] 142 ITR (St.) 88), issued under secti....
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....der, first appeal was preferred by the assessee-foreign company before the Commissioner of Income-tax (Appeals), Dehradun. The Commissioner (Appeals) allowed the appeal after relying on the Income-tax Appellate Tribunal's earlier decision wherein, on the same facts and circumstances, it was held that the assessee was exempted from the payment of surtax by virtue of Notification No. G.S.R. 307(E) dated March 31, 1983 (see [1983] 142 ITR (St.)88). Against this order of the Commissioner (Appeals), the Revenue preferred a second appeal before the Income-tax Appellate Tribunal, Delhi. The learned Income-tax Appellate Tribunal also dismissed the appeal of the Revenue after relying on its earlier decision in the case of O.N.G.C. as agent of M/s. G....
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....nies (Profits) Surtax Act, 1964, reads as under: "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 an exemption, reduction in rate or other modification in respect of surtax in favour of any class of foreign companies specified in sub-section (2) or in regard to the whole or any part of the chargeable profits of such class of companies. Explanation.-For the purposes of this sub-section, 'foreign company' shall have the meaning assigned to it in clause (4) of section 80B of the Income-tax ....
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....ral oils. Clause (b) of subsection (2) of section 24AA of the Act specifies any services or facilities or supplying any ship, aircraft, machinery or plant (whether by way of sale or hire) in connection with any business consisting of the prospecting for or extraction or production of mineral oils. A conjoint reading of these two clauses clearly reveals that both these two clauses are referring to two separate categories of foreign companies. The first category of companies are those companies with which a contract is entered into for the association or participation of that Government or any person authorised by that Government in any business consisting of the prospecting for or extraction or production of mineral oils. The second categ....
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....eral oil' includes petroleum and natural gas." The exemption provided by the aforesaid notification is only with respect to those categories of foreign companies, which enter into an agreement for the association or participation in any business consisting of prospecting for or extraction or production of mineral oils. The mineral oil includes petroleum and natural gas also as explained in the Explanation appended to section 24AA of the Act. As has been explained in the said notification, "foreign companies" have the same meaning as defined under section 80B of the Income-tax Act as it stood at the relevant time. Clause (4) of section 80B of the Income-tax Act defines the foreign companies to mean a company which is not a domestic compan....