TaxTMI 
TaxTMI 
2019 (3) TMI 1030
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.... income received by Appellant constitutes fees for technical services and covered under section 115A of the Income Tax Act, 1961 instead of applying the provisions of section 44BB of the Income Tax Act, 1961 which is a special provision for computing profits and gains in connection with the business of exploration, etc of mineral oils. 2. Without Prejudice to the above, Appellant submits that Assessing Officer has erred in holding that B.J. Services has given a sub contract to the Appellant who has agreed to perform the services indirectly for ONGC and wrongly stated that the payments are made by ONCG to Appellant. These observations are factually incorrect and further contrary to the various judicial decisions which were cited by the Appellant. Therefore the said order is had in law and deserves to be quashed. 3. Without Prejudice to the above Appellant submits that Learned Assessing Officer has failed to appreciate that section 44BB of the Income Tax Act overrides all other provisions of the Income Tax Act, being a special provision specifically for the purpose of Assessee engaged in the business of prospecting for, or extraction or production of mineral oils. ....
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....gible to claim deduction under sec.44BB of the Income Tax Act, 1961. 10. Appellant company submits that the Assessing Officer has not construed the law and judicial pronouncements on the subject. Hence, the Appellant company prays that assessment be made u/s 44BB of the Income Tax Act, 1961. 11. Appellant craves leave to add alter, amend, modify or omit any of the aforesaid grounds as the occasion may arise or demand." 2. Briefly stated, the facts of the case are that the assessee viz. Production Testing Services Inc., Texas, USA is a Foreign company incorporated in USA and is engaged in providing Fracturing Flow Back Services to oil companies. The assessee had e-filed its return of income for A.Y. 2014-15 on 19.09.2014, declaring total income at Rs. Nil. 3. The issue involved in the present case lies in a narrow compass. One B.J Services Company (Middle East) Ltd., a company incorporated in Scotland and having a project office in Mumbai was awarded a contract for Fracturing Flow Back Services by Oil and Natural Gas Commission (for short 'ONGC'). B.J Services Company (Middle East) Ltd. in turn sub-contracted the work to the assessee, vide agreement dated. 15....
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....assessee in respect of fees for professional/technical services, therefore, vide his draft assessment order passed under Sec. 143(3) r.w.s 144C(1) proposed to subject the amount of Rs. 3,02,40,747/- to tax under Sec. 115A as amount received by the assessee by way of 'Fess for technical services'. 5. Aggrieved with the adjustments/variations proposed by the A.O in the draft assessment order, the assessee filed its objections with DRP-2, Mumbai. The assessee assailed the draft assessment order passed by the A.O under Sec. 143(3) r.w.s 144C(1) on the ground that the amount of Rs. 3,02,40,747/- received from B.J Services Company (Middle East) Ltd that was offered by the assessee for tax under Sec. 44BB of the I.T Act was proposed by the A.O to be assessed u/s 115A. The DRP taking cognizance of the fact that a similar issue was adjudicated upon by the DRP in the immediately preceding year, viz. A.Y 2013-14, against the assessee, therefore, by taking support of the said observations recorded in the said preceding year was thus not persuaded to accept the contentions of the assessee and followed the view taken in its case for the aforesaid preceding year. On the basis of his aforesa....
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....ed in filing of the present appeal was substantial, therefore, the same did not deserved to be condoned and was liable to be dismissed on the said count itself. 8. We have heard the authorized representatives for both the parties and had deliberated upon the explanation of the assessee as regards the delay in filing of the present appeal. The assessee as well as his chartered accountant in order to substantiate the facts stated in the application seeking condonation of delay, had filed their respective affidavits. On a perusal of the affidavits, it can safely be gathered that the delay in filing of the appeal had occurred on account of an inadvertent omission on the part of the chartered accountant to file the appeal within the stipulated time period. We have given a thoughtful consideration and are of the considered view that as admitted by the chartered accountant viz. Shri Madhav Joshi that the delay in filing of the present appeal was on account of an inadvertent omission on his part, which in itself was backed by the reason that he had remained under huge work pressure at the relevant point of time, therefore, no lapse or laches in respect of the delay involved in filing of....
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....per Sec. 115A of the I.T Act, or is covered by the special and specific provisions envisaged in Sec. 44BB for computing the profit and gains of a non-resident engaged in the business of providing services or facilities in connection with or supplying plant and machinery on hire used, or to be used, in the prospecting for or extraction or production of mineral oils. We are persuaded to be in agreement with the Ld. A.R that the issue involved in the present case is squarely covered by the orders of the Tribunal in the assessee's own case for the preceding years viz. A.Y 2011-12, A.Y 2012-13 and A.Y 2013-14. The Tribunal in the case of the assessee for A.Y 2012-13 viz. Production Testing Services Inc Vs. DCIT, 3(3)(2), Mumbai, ITA No. 2060/Mum/2016, dated 02.02.2018, had followed the view earlier taken in the assesses own case for A.Y 2011-12, wherein it was observed as under:- "9. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We find that the assessee ,viz. Production Testing Services Inc., Texas, USA, which is a Foreign company incorporated in USA, is engaged in providing ....
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....id judgment of the Hon‟ble Supreme Court, the issue that prospecting for extraction or production of mineral oil is not to be treated as technical services for the purpose of Explanation 2 of Sec. 9(1)(vii) stands settled and is no more found to be res integra. We are of the considered view that Sec. 115A(b) clearly presupposes existence of „fees for technical services‟, which further as per the Explanation (a) contemplated therein refers to Explanation 2 of Sec. 9(1)(vii). That now when pursuant to the judgment of the Hon‟ble Supreme Court in the case of ONGC vs. CIT (2015) 376 ITR 306 (SC), the issue that prospecting for or extraction or production of mineral oil is not to be treated as technical services for the purpose of Explanation 2 of Sec. 9(1)(vii), therefore, it can safely be concluded that the payments received by the assessee from rendering of Fracturing Flow Back Services for extraction or production of mineral oil would not fall within the realm of „fees for technical services‟. We thus, are of the considered view that as the precondition for invoking of Sec. 115A is in itself found to be missing, therefore, the same would not be at....