BALIA, J. - (1.) ALL these cases relates to the assessment of Oil and Natural Gas Commission (hereinafter referred to as `ongc') as agent of non-resident assessee M/s. Compagnie Generals Deo Gophysique, France (in short `cgg' ). It is not in dispute in any of these cases that the non-resident assessee is engaged in the business of providing services or facilities in connection with prospecting for, or extraction or production of mineral oil as well for supplying plant and machinery on hire on hire used, or to be used.
(2.) D. B. I. T. Appeal No. 68/2001 is an appeal against order of the Income-Tax Tribunal dated 30. 3. 2000. We shall first consider the issue in appeal. The assessee acting under Section 44bb (2) returned his taxable income under the head profits and gains of business or profession on the basis of computation made in terms of Section 44bb of the Income-Tax Act, 1961. According to the assessee he is liable to pay tax on `10% of the aggregate of the amount specified in sub- section (2) of Section 44bb'. Accordingly, he has included in computation of his profits and gains of business or profession of `the non-resident assessee' the sum received by it from its principal for the purpose of making payment of income- tax in connection with activities carried on by him in India which is related to processing/exploration/production of mineral oil in India. This claim was originally accepted by the Assessing Officer. However, the Commissioner of Income-Tax considered the inclusion of income-tax for aggregate of sum in the amounts referred to in sub-section (2) of Section 44b6 to be erroneous and Prejudicial to the interest of revenue and directed the Assessing Officer to re-compute the income of the assessee by including 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 under Section 26 (4) of the Income-Tax Act, 1961, by excluding it from computation of income made under Section 44bb (2) On the other hand the assessee has contended that computation of income under the head `profits and Gains of Business or Profession' so far as non-resident assessee is concerned, in the facts and circumstances of the case can only be made under Section 44bb, without reference to any other provision for computation of income under the heads profits and gains, on account of non- obstante clause. The plea of the assessee found favour of the Tribunal and it has set aside not only the order of Commissioner under 263 of the Act but has also held in favour of the assessee on merits. It is in the aforesaid circumstances that I. T. Appeals No. 67/2001, 68/2001 and 71/2001 were admitted by this Court and the substantial question of law which in the opinion of the Court prima facie arose for consideration in that appeals, were framed as under: 1. Whether on the facts and in the circumstances of the case, the I. T. A. T. is justified in law in quashing the order under Section 263 passed by the CIT ? 2. Whether on the facts and in the circumstances of the case, the Hon'ble I. T. A. T. was justified in law in upholding the finding of the CIT (A) that only 10% of the income-tax payable by O. N. G. C. on behalf of C. G. G. is includible in total income of the assessee in total disregard to the fact that amount of income-tax payable by O. N. G. C. on behalf of non-resident company is not a receipt within the meaning of Section 44bb of the Income-Tax Act? Learned counsel for the respondent appearing in this case states that if the controversy between the parties is examined in proper perspective in the facts and circumstances undisputed facts, the answer is self-evident and obvious that there is no other mode of computation of income of the assessee under the head of profits and gains of business or profession then the one provided under Section 44bb (1) and in view of that the question framed by the Court at the time of admitting the appeal cannot be said to be substantial question of law or at any rate they must be answered in affirmative i. e. to say in favour of the assessee.
(3.) LEARNED counsel for the revenue has urged that since those part of the provisions which have been excepted by the non-obstante clause cannot be invoked to the extent they are contrary to the provisions of Section 44bb and cannot be pressed into service for computation of income. Before considering the provisions of Section 44bb it will be apposite to refer to relevant part of the Scheme of the Act of 1961. Section 4 which is the charging section for levying tax on income of any person under the Act provides that Income-Tax shall be charged at rate or rates enacted by Central Act in accordance with and subject to provisions of the Act in respect of his total income of the previous year relevant for that assessment year of every person. ;