Approval under Section 80o of the Income-tax Act, 1961 is required only once, before the first day of October of the relevant assessment year.

( 1 ) ON the application of the Commissioner of Income-fax, the following question has been referred to us for our decision:

"whether on the facts and on the circumstances of the case the assessee was entitled to the benefit of section 80o of the income-tax Act. "the assessee, M/s. Indian Institute of Public Opinion Co. Pvt. Ltd. , entered into an agreement on January 1, 1967 with Roper Public Opinion Research Centre of the United States of America under which the Indian Institute had to furnish the American Centre, from time to time, with its know-how on measurement of public opinion and research in consideration of a payment of US $ 375 per quarter and expenses. The details of this agreement are not relevant for our present purpose. It is sufficient to say that under clause 6 of the agreement, it was to remain in force for a period of 12 months. The clause, however, provided that the agreement "thereafter shall remain in force until determination at any time by three months in writing by either of the parties". It is not in dispute that the agreement has not been determined by either of the parties and that it continued to remain in force during the relevant period.

( 2 ) THE agreement was submitted to the Government of India for its approval under Section 80o of the Income-tax Act, 1961. The approval was also obtained on 2-2-1968. This provision, at the time of its enactment, with effect from 1-4-1948, by the Finance (No. 2) Act, 1967, was in the following terms :

"sec. 80o. Deduction in respect of royalties, etc. , received from certain foreign companies Where the gross total income of an assessee being an Indian company includes any income by way of royalty, commission, fees or any similar payment received by it from a foreign company in consideration for the use of any patent, invention, model, design, secret formula or process, or similar property right, or information concerning industrial, commercial or scientific knowledge, experience or skill made available or provided or agreed to be made available or provided to the foreign company by the assessee, or in consideration of technical services rendered or agreed to be rendered to the foreign company by the assessee, under an agreement approved by the Central Government in this behalf before the 1st day of October of the relevant assessment year, there shall be a deduction from such income of an amount equal to sixty per cent thereof) in computing the total income of the assessee". The partial exemption was made complete by an amendment, effective 1-4-1969, by the Finance Act, 1969 which substituted, for the words underlined above, the following words:

"deduction of the whole of such income".

( 3 ) FOR the assessment year 1968-69, for which the relevant previous year was calendar year 1967, the assessee was granted relief under Section 80o. Similarly, for the assessment year 1969-70, relevant for the previous year which ended on 31-12-1968, the Income-tax Officer granted the assessee relief under Section 80o when he completed its assessment on the 18th February, 1970. Subsequently, however, he seems to have had second thoughts about it. He came to the conclusion that, as per para 5 of the agreement, the agreement was to remain in force for a period of 12 months only and that thereafter the company had to make or enter into a fresh agreement with the American Institute and obtain the approval of the Government for it before 1-10-1969 in order to obtain relief under Section 80o for the assessment year 1969-70. He, therefore, proposed to rectify the assessment under Section 154 of the Act and to withdraw the deduction granted to the assessee earlier under Section 80o. After issuing notice to the assessee and observing that there was no response thereto, she rectified the assessment under Section 154 as indicated above.

( 4 ) THE assessee preferred an appeal to the Appellate Assistant Commissioner. The Appellate Assistant. Commissioner pointed out that, on a pr