ONGC seeks Rs 3,000 crore tax rebate

Public sector explorer ONGC is finding it hard to forego its claim of over Rs 3,000 crore as tax exemption. Citing legal precedents and reasoning, the oil major has again sought Cabinet secretariat’s approval to take a legal recourse before the income-tax appellate tribunal (ITAT). Earlier, the Cabinet secretariat had turned down the company’s request to permit it to challenge the I-T department for denying tax benefits. The matter relates to ONGC’s tax assessment for the year 2002-03 and 2003-04, wherein the I-T department rejected the company’s claim for tax deduction on commercial production of “mineral oils”. The committee on disputes (COD), which had to decide if the company could be allowed to move up in appeal, had concluded that there was “no question of law” involved that could necessitate a litigation before the ITAT. ONGC’s claim to seek review of the COD’s decision was based itself on an analysis of the provisions under Section 80IB (9) of the Income-Tax Act, under which the exemptions had originally been sought. The said provisions, which provide a 100% tax holiday to undertakings that began commercial production of mineral oils in India, makes it mandatory for the assessee company to get the accounts for its undertakings audited. By Ms.Bobby Aanand, Metropolitan Jury.

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