COMMISSIONER INCOME TAX AND ANOTHER vs. ONGC

ITA/118/2007HC UttarakhandUKHC01006575200710 April 2008Author: HON'BLE MR. JUSTICE PRAFULLA C. PANT5 pages
AI SummaryAllowed

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Dehradun, and the Assistant Commissioner of Income Tax, Circle-I, Dehradun, against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had set aside an order of the Commissioner of Income Tax Appeals (CIT Appeals), who had upheld the assessment order passed by the Assessing Officer. The assessee, a non-resident company (NRC) represented by ONGC, provided services to ONGC for exploration, extraction, and production of mineral oils. Specifically, the NRC was engaged for maintenance of four software modules: ResPrep, ResGram, ResMod, and ResSeis.

What did the High Court hold?

The High Court held that the services rendered by the assessee (NRC) were technical services in the work of oil exploration for which a fee was charged. The Court noted that the assessee did not claim to have supplied plant and machinery during the assessment year. Consequently, the Court was of the opinion that the CIT (Appeals) had not committed any error of law in upholding the view of the Assessing Officer. The High Court upheld the decision that the assessee, as a technical service provider, was liable to pay tax at the rate of 15% under Section 44D read with Section 115A of the Income Tax Act, 1961, instead of 10% chargeable under Section 44BB. The appeal was allowed, and the impugned order of the ITAT was set aside.

What were the issues?

1. Whether, in respect of receipts for services rendered by the non-resident company (NRC) in maintaining software modules for oil exploration, tax is chargeable under Section 44BB of the Income Tax Act, 1961, or under Section 115A read with Section 44D of the Act? Assessee's contention: The assessee argued that tax should be charged under Section 44BB of the Income Tax Act, 1961. Revenue's contention: The revenue argued that the services rendered were technical services for which a fee was paid, and therefore, the case is covered under Section 115A read with Section 44D of the Act. The revenue relied on the proviso to Section 44BB(1) which states that the section shall not apply where provisions of Section 42, 44D, 115A, or 293A apply. The revenue also referred to the explanation to Section 44D and Explanation 2 to clause (vii) of sub-section (1) of Section 9 of the Act defining 'fees for technical services'.

Which sections of the Income-tax Act were involved?

Section 260A,Section 143(3),Section 44BB,Section 115A,Section 44D,Section 42,Section 293A,Section 9

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL

Income Tax Appeal No. 118 of 2007

(1) Commissioner Income Tax, Dehradun. (2) Assistant Commissioner of I. Tax Circle-I,

Dehradun.

…………………Appellants.

Versus

ONGC as representative assessee of M/s Reservoir Characterization Research & Consulting (UK) Ltd. U.K.

…………….Respondent.

Sri Arvind Vashistha, learned counsel for the appellants. Sri Udyog Shukla, learned counsel for the respondent.

Hon’ble Prafulla C. Pant, J. Hon’ble Dharam Veer, J.

[Oral- Prafulla C. Pant, J.]

This appeal, preferred under Section 260A of the Income Tax Act, 1961, is directed against the judgment and order dated 09.02.2007, passed by Income Tax Appellate Tribunal, Delhi Bench ‘E’ (hereinafter referred as ITAT), whereby the order dated 26.08.2004, passed by Commissioner of Income Tax Appeals (hereinafter referred as CIT (Appeals), Dehradun, is set aside. CIT (Appeals) dismissed the appeal of the assessee and affirmed the

assessment order passed by the Assessing Officer under Section 143(3) of Income Tax Act, 1961. (2) Heard learned counsel for the parties.

(3) Brief fa

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 44BB

All 385 judgments and leading authorities on Section 44BB →

Recent GST High Court judgments

Search GST case law →