Dy. DIT vs B.J. Services Company Middle East Ltd.

Barin Ghosh, C.J.—Considering the sufficiency of the reasons for delay in preferring these appeals, we allow the applications for condonation of delay in preferring these appeals, and thereby, condone the delay. Respondents/writ petitioners are assessees to income tax. Their assessments were closed. They were permitted to take advantage of Section 44BB of the income tax Act, 1961 when their assessments were closed. Subsequently, the proviso to sub-section (1) of section 44BB was inserted with effect from 1-4-2011. The proviso is as follows:-

Provided that this sub-section shall not apply in a case where the provisions of section 42 or section 44D or section 44DA or section 115A or section 293A apply for the purpose of computing profits or gains or any other income referred to in those sections.

Whereas section 44BB deals with a non-resident assessee providing, amongst others, services or facilities in connection with prospecting for, or extraction or production of, mineral oils, the sections mentioned in the proviso, referred to above, deal with fees received by non-resident assessees for providing, amongst others, services or facilities. Therefore, by adding the proviso with effect from 1-4-2011, a clear cut distinction has been made between those non-resident assessees, who are engaged in the business of providing, amongst others, services or facilities in connection with prospecting for, or extraction or production of, mineral oils and other kind of non-resident assessees, who get fees for providing services or facilities. The assessing officer felt that, by reason of insertion of the said proviso, he can look into those completed assessments for the accounting years, which stood closed prior to 1-4-2011 and, accordingly, exercised power u/s 148 of the income tax Act. By the judgment under appeal, the learned Judge has pointed out that there was no just reason for doing the same, inasmuch as, the distinction referred to above, according to the income tax Act, applies only since 1-4-2011. We, accordingly, refuse to admit the appeals. They are dismissed.