WPC 5716/2008

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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Writ Petition (Civil) No. 5716 of 2008

Reserved on:29^th March, 2012

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Date of Decision: 28^th May, 2012

Joshi Technologies International Inc.

....Petitioner

Through

Mr. Mr. S. Ganesh, Mr. Gaurav Pachnanda,

Sr. Advocate with Mr. Bharat Sangal,

Mr.

Yawar

Masoodi

and

Ms.

Srijna,

Advocates.

Versus

Union of India & Ors.

…Respondents

Through

Ms. Sonia Mathur, Mr. Ritesh Kumar and

Ms. Shweta Gupta, Advocates with

Mr. Ajit Jain, Dy. MGR/Fund A-DGH &

Ms. Upma Kwatra, Legal Advisor.

CORAM:

HON’BLEMR. JUSTICE SANJIV KHANNA

HON'BLE MR. JUSTICE R.V. EASWAR

SANJIV KHANNA, J.

Joshi Technologies International Inc., a company incorporated in

the United States of America seeks mandamus that they are entitled to

benefit under Section 42 of the Income Tax Act, 1961 (Act, for short) in

respect of the two Production Sharing Contracts (PSCs, in short) both

dated 20^th February, 1995 for Oil Fields in Dholka and Wavell, Gujarat.

2.

The factual background in brief is that the petitioner along with

Larsen & Toubro Ltd., (who subsequently assigned and transferred their

rights in favour of the petitioner), were successful bidders in the Notice

Inviting Tender, dated 31^st December, 1992 (“1992 NIT”). The

“petroleum profit” was/is to be shared as per the terms of the PSC

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between the Government of India, Ministry of Petroleum and Natural

Gas and the petitioner. The two PSCs have duration of 18 years from

their effective date and have extension provisions.

3.

The petitioner in the returns for the Assessment Years 2001-02,

2003-04 and 2004-05, claimed and was allowed deductions under

Section 42 of the Act. However, in respect of the assessment year 2005-

06, the Assessing Officer denied benefit under Section 42 vide order

dated 31^st December, 2007. Several other additions were made. This

had resulted in an additional demand of Rs.1,24,45,509/-. The petitioner

has filed an appeal against the assessment order before the appellate

authority. It appears that the appeal is pending.

4.

The Assessing Officer has also issued notices for re-assessment in

respect of Assessment years 2001-02, 2002-03, 2003-04 and 2004-05, on

the ground that the petitioner was wrongly given benefit of deduction

under Section 42 of the Act in the said years.

5. Section 42 of the Act reads as under:-

“42. Special provision for deductions in the case

of business for prospecting, etc., for mineral oil.—

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specified in the agreement in relation—

Provided that in relation to any agreement entered

Section 32” had been omitted; and

“mineral oil” includes petroleum and natural gas.

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capital sums)—

Provided that in a case where the provisions of this

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Provided that where in a scheme of amalgamation

sub-section—

the business or interest in the business.”

6.

The contention of the petitioner is that by mistake, due to

inadvertent oversight and error on the part of the Ministry of Petroleum

and Natural Gas, the petitioner has been denied benefit under Section 42

of the Act. On account of their mistake, Section 42 was not incorporated

and mentioned in the two PSCs and the contracts were not tabled/laid

before the Parliament. It is submitted that the petitio