TaxTMI 
TaxTMI 
2025 (5) TMI 1329
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....enior Standing Counsel Mr. Nikunt K. Raval for the respondent. 2. These appeals are admitted on the following substantial question of law: "Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in not allowing the special deduction under sec. 42 of the Income-tax Act, 1961 to the assessee for the years under consideration?" 3. At the outset, learned advocate Mr. B. S. Soparkar for the appellant submitted that the admitted question in these appeals are no more res-integra in view of the decision of the Hon'ble Supreme Court in case of Joshi Technologies International Inc. Versus Union of India. Learned advocate Mr. B.S. Soparkar invited the attention of this Court to the finding....
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....ct (MPSC) can be read as part of and incorporated in the PSCs? (iii) Whether there was any intention between the contracting parties, namely, the MoPNG and the appellant for giving benefit of deductions under Section 42 of the Act? (iv) If so, whether non-inclusion of such a provision in the contract can be treated as accidental and unintentional omission. (v) If the answer to question no. (iv) is in the affirmative, whether mandamus can be issued by the Court to the parties to amend the contract and incorporate provisions to this effect? 36. We would now proceed to answer these questions seriatum. 37. Answer to question No.(i) - First and foremost aspect which has to be kept in mind while answer....
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....ible to the deductions, certain conditions are stipulated in this very section which have to be satisfied by the assessees. As is clear from the reading of this Section, these conditions are as under: (a) it grants such special allowances to those assessees who carry on business in association with the Central Government or with any person authorized by it; (b) business should relate to prospecting for, extracting or producing mineral oils, petroleum or natural gas; (c) there has to be an agreement in writing between the Central Government and the assessees in this behalf; (d) it is also a requirement that such an agreement has been laid on the Table of each House of Parliament; (e) the allowance....
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.... aforesaid allowances to the assessee. It is obvious that the Assessing Officer could not have granted these allowances/deductions to the assessee in the absence of such stipulations, a mandatory requirement, in the PSCs. 41. The appellant is conscious of this position. It is for this reason the attempt of the appellant was to read the provisions of MPSC into the agreement. That bring us to the second issue. 42. Answer to question no.(ii) - Endeavour of Mr. Ganesh, on this aspect, was to show that the bids were invited on the basis of terms stated in the MPSC which specifically mentioned about deductions under Section 42 of the Act. He also endeavored to demonstrate that thee appellant had submitted its bid keeping in view....
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....h intention expressed in the agreement, namely, to incorporate the provisions of MPSC or the correspondence exchanged between the parties earlier to the signing of this agreement: "(5) The Government has agreed to enter into this Contract with the Companies with respect to the area referred to in Appendices A & B of this Contract on the terms and conditions herein set forth. Article 1 - In this Contract, unless the context requires otherwise, the following terms shall have the meaning ascribed to the then hereunder: xxx xxx xxx Article 1.18 "Contract" means this agreement and the Appendices mentioned herein and attached hereto and made an integral part hereof and any amendments made thereto pursuant to th....
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....ies prior to the signing of this agreement. Not only this, even the so-called "understanding" between the parties is to be ignored as well. It is, therefore, impermissible for the appellant to take the aid of MPSC or the clauses contained therein while construing the terms of PSCs. Therefore, it was not even open to the Income Tax Authorities to go beyond the stipulations contained in the PSCs while making the assessment and had to exclusively remain within the provisions of the Agreement. On that touchstone, the Assessing Officer had no option but to deny the benefit of deductions/allowances claimed by the appellant in its income tax returns filed for the Assessment Year 2005-06. This bring us to the next question. 45. Answer to q....