IMPORTANT POINT
When the repository of power takes a conscious decision to limit the scope of provision, Court cannot expand it.

Headnote:Companies (Profits) Surtax Act, 1964 - Section 24AA – Power to grant exemption – Sub-section 2(a) covers agreements directly associated with the prospecting or extraction or production of mineral oils – Sub-section 2(b) covers contracts facilitating or making available services in connection with such a business – Exemption notification specifically omitting foreign companies that may be providing services thus limiting the scope of the provision as in sub-section 2(b) – When the repository of power takes a conscious decision to limit the scope of provision, Court cannot expand it. (Para 12, 13)
       (2014) 6 SCC 444 – Relied upon
       Facts of the case:
       In this group of appeals the Court has been required to interpret Section 160-A of the Income Tax Act, 1961 and section 24AA of the Companies (Profits) Surtax Act, 1964.
       Finding of the Court:
       When the repository of power takes a conscious decision to limit the scope of provision, Court cannot expand it.
       Result: Appeals dismissed.

Judgment

Ranjan Gogoi, J.

1. A short and precise question which is common to all the appeals under consideration has arisen in the present group of appeals instituted by the Oil and Natural Gas Corporation (ONGC) which has been assessed as a representative assessee within the meaning of Section 160-A of Income Tax Act, 1961. The assessments in question have been made under the provisions of the Companies (Profits) Surtax Act, 1964 (hereinafter referred to as the ‘Surtax Act’).

2. The question posing for an answer revolves around the true and correct purport and effect of exemption notification bearing No. GSR 307(E) dated 31.03.1983 issued under Section 24AA of the Surtax Act. For a quick understanding of the question that arise for consideration, the provisions of Section 24-AA of the Surtax Act and the contents of the notification bearing No. GSR 307(E) may be extracted below :

“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 in 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 profits chargeable 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 Act.

(2) The foreign companies referred to in sub-section (1) are the following, namely:-

(a) foreign companies with whom the Central Government has entered into agreements for the association or participation of that Government or any person authorized by that Government in any business consisting of the prospecting for or extraction or production of mineral oils; and

(b) foreign companies providing any services or facilities or supplying any ship, aircraft, machinery or plant (whether byway of sale or hire) in connection with any business consisting of the prospecting for or extraction or production of mineral oils carried on by that Government or any person specified by that Government in this behalf by notification in the official Gazette.

(3) Every notification issued under this section shall be laid before each House of Parliament.

Explanation.-For the purposes of this section, "mineral oil" includes petroleum and natural gas.”

“GSR No. 307(E) -Exemption from surtax of foreign companies with whom Central Government has ente...

Exemption from surtax of foreign companies with whom Central Government has entered into agreements for participation in business of prospecting for or extraction of mineral oils -Notification issued under sub-section (1)

Whereas the Central Government is satisfied that it is necessary and expedient in the public interest to make an exemption in respect of surtax in favour of foreign companies with whom the Central Government has entered into agreements 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;

Now, therefore, in exercise of the powers conferred by section 24AA of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central Government hereby provides that no surtax shall be payable by such foreign companies.

Explanation : For the purposes of this notification :

(a) "foreign company" shall have the meaning assigned to it in clause (4) of section 80B of the Income-tax Act, 1961 (43 of 1961);

(b) "mineral oil" includes petroleum and natural gas. Notification : GSR No. 307(E), dated 31-3-1983.”

3. Section 24-AA of the Surtax Act, as it would appear, vests in the Central Government the power to make exemption, reduction in rate or other modification in respect of Surtax in favour of any class of foreign comp

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2015 Supreme(SC) 713

IMPORTANT POINTWhen the repository of power takes a conscious decision to limit the scope of provision, Court cannot expand it.

Cases Referred (1)

IMPORTANT POINT
When the repository of power takes a conscious decision to limit the scope of provision, Court cannot expand it.