1. The assessee in appeal is Indian Institute of Public Opinion (P.) Ltd., New Delhi, a company incorporated under the Companies Act, 1956.
The year of assessment involved is 1970-71 for which the previous year ended on 31-12-1969. The assessee-company derived income from publication of magazines, survey and research services.
2. Admittedly, in the year under consideration, the assessee inter alia received fees totalling Rs. 38,140 from British Broadcasting Corporation, London (Rs. 29,700) and Roper Public Opinion Research Centre, Williamstown. Massachusetts (USA) (Rs. 8,440). The stand of the assessee before the ITO was that in respect of the said receipts it was entitled to the deduction under Section 80-O of the Income-tax Act, 1961 ('the Act'). This was not acceptable to the ITO as the above foreign enterprises from whom the technical services fees were received, were not according to the ITO, 'foreign companies'.
3. Aggrieved by the said assessment, the assessee brought the matter by way of appeal before the Commissioner (Appeals) who after going through the provisions of Section 80-O has agreed with the assessee by observing as under : It is clear from a bare reading of the above section that for the appellant to succeed in its claim it has to fulfil two essential requirements, namely, it should have received fee, etc., from a foreign company and such receipt should be under an agreement approved by the Central Government. In the appellant's case the second condition namely approval of the Central Government is fulfilled but the ITO declined to allow the relief on the ground that the fees in question was not received from foreign companies if the definition of 'company' contained in Section 2(17)(ii) [as it stood prior to amendment by the Finance (No. 2) Act, 1971] is kept in view. This being a primary condition, the fulfilment of which the appellant has failed to establish even before me, I am unable to agree with the appellant's contention that relief should be allowed to it merely because the fees, etc., is received under an agreement approved by the Central Government which obviously would arise for consideration only after the appellant fulfils the first condition.
Acceptance of appellant's arguments would amount to putting the cart before the horse. Besides there is no substance in the appellant's plea that in the face of the approval of the Central Government, the ITO is debarred from satisfying himself about the other requirements of Section 80-O for if that were the intention, the only requirement of Section 80-O would have been about fees received under an agreement approved by the Central Government and the section need not have referred to, as it does, other condition of the fees being received from a foreign company. It is settled law that the provisions of a fiscal statute do not admit of convenience as a safe guide to their construction.
'...However, difficult it may be to believe that Parliament ever really intended the consequences of a literal interpretation, we can only take the intention of Parliament from the words which they have used in the Act, and, therefore, the question is whether these words are capable of a more limited construction. If not, then we must apply them as they stand, however, unreasonable or unjust the consequences and however, strongly we may suspect that this was not the real intention of Parliament.(Maxwell on The Interpretation of Statutes, 12 edition, page 205) In this view of the matter and in view of the definition of the word 'Company' prevailing in the year under appeal I must agree with the ITO that even on merits the appellant does not qualify for relief under Section 80-O in' respsct of the fees received by it from BBC, London and Roper Public Opinion Research Centre, USA. which foreign enterprises are not covered by the aforesaid definition of 'company'.
4. In the appeal before the Tribunal, the representative for the assessee, Shri P.N. Khanna, took us through the provisions of Section 80-O, Section 80B(4) of the Act defining the expression 'foreign company' and Section 80B(2) defining the expression 'domestic company' and urged that the conditions prerequisite for the grant of deduction claimed under Section 80-O were fulfilled in the present case because each of the aforesaid foreign enterprises being not 'domestic company' as defined in Section 80B(2) was nothing but a 'foreign company' as defined in Section 80B(4). Section 2(17) of the Act has no application in the present case. He further urged that requisite permission mentioned in Section 80-O has been granted to the assessee by the Government of India, Ministry of Commerce vide their letter dated 6-2-1968 at page 17 of the paper book. Those arguments are controverted by the departmental representative who has relied on the order of the Commissioner (Appeals).
5. We have given consideration to the above appeal, Section 80-O reads as under : 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 allowed a deduction of the whole of such income, in computing the total income of the assessee.
A perusal of the above provision shows that the assessee to succeed i his claim in deduction under Section 80-O has inter alia to prove tha (1) it has received fees, etc., from a foreign company ; and (2) the sai receipt should be under an agreement approved by the Centre Government. In view of the letter of the Government of India Ministry of Commerce dated 6-2-1968 read with the respective contrac entered into by the assessee with BBC, London dated 25-8-1969 a pages 15 and 16 of the paper book filed by the assessee and with Roper Public Opinion Research Centre, Massachusetts, US dated 1-1-1967 at pages 18 and 19 of the paper book filed by the assessee, it can be safely said that the assessee has proved that the receipts in question by it from the said two foreign enterprises were under agreements approved by the Central Government.
6. The next question to be examined is as to whether the assessee had received the aforesaid fees from a 'foreign company'. The expression 'foreign company' is defined in Section 80B(4) to mean 'a company which is not a domestic company as defined in Clause (2).' To say in other word: according to Section 80B(4) a foreign company should be (1) a company and (2) should not be a 'domestic company'. 'Domestic company' is defined in Section 80B(2) to mean "an Indian company" or any other company which, in respect of its income liable to tax under this Act, has made the prescribed arrangements for the declaration and payment within India, of the dividends including dividends on preference shares payable out of such income". After hearing both the sides, we can safely say that there can be no dispute that either of BBC, London or Roper Public Opinion Research Centre, USA, is not, a 'domestic company' as defined in Section 80B(2). We say so because neither of them is "an Indian company, or any other company which, in respect of its income liable to tax under this Act, has made the prescribed arrangements for the declaration and payment, within India, of the dividends (including dividends on preference shares) payable out of such income". At the same time each of the said enterprises to be a 'foreign company' has to be a company. The expression, 'a company' is not defined in Section 80B. The same is defined in Section 2. The expression company is defined in Section 2(77). The said definition as it stood in the year under consideration, reads as under : (ii) any association, whether incorporated or not and whether Indian or non-Indian, which is or was assessable or was assessed under the Indian Income-tax Act, 1922 (11 of 1922), as a company for the assessment year commencing on the 1st day of April, 1947, or which is declared by general or special order of the Board to be a company for the purposes of this Act.
Since either of BBC or Roper Public Opinion Research Centre is not an Indian company or an association, whether incorporated or not and whether Indian or non-Indian, which is or was assessable or was assessed under the Indian Income-tax Act, 1922 (XI of 1922), as a company for the assessment year commencing on 1-4-1947, or which is declared by general or special order of the Board to be a company for the purposes of this Act, these foreign enterprises are not 'a company' as defined in Section 2(17). That being the position, aforesaid first condition prerequisite for the grant of the deduction under Section 80-O of the said companies being foreign companies is not satisfied.
The Commissioner (Appeals) was correct in rejecting the claim of the assessee for deduction under Section 80-O. We hold likewise.
7. The decision of the Delhi High Court in the case of the assessee reported as CIT v. Indian Institute of Public Opinion Co. (P.) Ltd.  134 ITR 23, is distinguishable on fact because over there the point at issue was not involved. We hold likewise.
8. In the result, the appeal by the assessee fails and is hereby dismissed.
9. I agree. Though there appears to be a contradiction in the definition of a 'foreign company' appearing in Section 80B(4) with the main provisions of Section 80-O in that the definition placed restrictions on the qualifying payments by allowing deduction only on those payments received from a foreign company which is a company, i.e., as defined in Section 2(47), the above construction appears to be the only possible interpretation in view of the decision of the Supreme Court in the case of CIT v. R.M. Amin  106 ITR 368.
10. In fact, the section was amended by the Finance (No. 2) Act, 1971, with effect from 1-4-1972. By that amendment, the term 'foreign company' was replaced by 'Government of a foreign State or a foreign enterprise', rendering the definition in Section 80B(4) redundant. Even then, it is not for us to make good any deficiency or import into the statute words which are not there. We can only give the natural meaning of the words found in the provision.