S. Ranganathan, J.
(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 assessed was entitled to the benefit of section 80O of the income-tax Act.'
The assessed, 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 assessed 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 assessed, or in consideration of technical services rendered or agreed to be rendered to the foreign company by the assessed, 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 assessed'.
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 assessed 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 assessed 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, thereforee, proposed to rectify the assessment under Section 154 of the Act and to withdraw the deduction granted to the assessed earlier under Section 80O. After issuing notice to the assessed and observing that there was no response thereto, she rectified the assessment under Section 154 as indicated above.
(4) The assessed preferred an appeal to the Appellate Assistant Commissioner. The Appellate Assistant. Commissioner pointed out that, on a proper construction of clause 6, the agreement continued to be in force even beyond 31-12-1967 and that the agreement had been duly approved by the Central Government and that the relief under Section 80O had been properly granted. He, thereforee, annulled the order under Section 154.
(5) The Income-tax Officer, preferred an appeal to the Income-tax Appellate Tribunal. It was contended before the Tribunal again that the agreement was only for a period of one year and that as it had not been renewed the Income Tax Officer's action was justified. The learned Member of the Tribunal who heard the appeal, however, pointed out that clause 6 of the agreement was clear that it continued to be in force unless rescinded by the parties. He, thereforee, agreed with the assessed's contention and the Appellate Assistant Commissioner's order and dismissed the department's appeal.
(6) The Commissioner of Income-tax has obtained this reference under Section 256(1) to this Court on the question of law already set out. As we understand him, the learned counsel for the applicant does not adopt the line of argument of the Income Tax Officer in the order of rectification or at the stage of the appeal before the Appellate Tribunal. Indeed, having regard to the terms of clause 6 which have been extracted earlier, there can be no doubt that the agreement continued to he in force not merely for a period of 12 months but even 'beyond that time as it had not been determined by a written notice of either party as stipulated in that clause. Learned counsel for the applicant, however, contended that on a proper construction of Section 80O it is necessary for an assessed, 'who claims exemption under this section, to obtain an approval in relation to every assessment year before the first day of October of that assessment year. He derives support for this construction of the section by referring to the section as it was amended w.e.f. 1-4-1972 by the Finance (No. 2) Act, 1971. Apart from certain changes in the body of the section which are not relevant for our present purposes, the portion of the amended section, on which the learned counsel relied, is in the following terms:
'Provided that the scheme for the approval of the agreement referred to in this section is made to the Board before the first day of October of the assessment year in relation to which the approval is first sought.'
By contrasting the language of these two provisions, learned counsel contended that, whereas the amended section makes it clear that it is enough if the approval is sought once, the provisions of the earlier section were different and required an approval to be sought year after year.
(7) We are of opinion that the contention urged by the learned counsel is not correct. All that section 80O requires is that the agreement should be approved by the Central Government and that the approval should have been obtained before the first day of October of the relevant assessment year. The term relevant assessment year obviously means the assessment year in respect of which exemption is sought: in the present case, the assessment year 1969-70. In order to be eligible for relief under Section 80O only two questions have to be asked (1) Has the assessed received payments by way of royalty etc. under an agreement approved by the Central Government or not and (2) Has this agreement been approved by the Central Government before the first day of October, 1969
(8) In the present case, there is no dispute that the agreement entered into on 1-1-1967 which is current till today has been approved by the Central Government. The approval of the Government is for the agreement as such and it is not the Department's case that it was in any way limited. It is also common ground that this agreement was approved by the Central Government on the second of February, 1968 which was long before the first day of October, 1969. The conditions for the exemption under Section 80O ate, thereforee fulfillled in the present case. The reference to 'relevant assessment year' is perhaps intended to cover cases where there is more than one agreement and it becomes important to consider whether the particular agreement in force in a particular assessment year has received approval. For instance, in this very case if the agreement of 1-1-1967 had expired on 31-12-1967, the assessed would not have been entitled to exemption for the assessment year 1969-70 unless a fresh agreement had been entered into and got approved before 1-10-1969. These words, however, cannot be interpreted to imply a condition that there should be repeated approvals got, even for the same agreement, for every assessment year. Such an insistence would be meaningless and redundant. We, thereforee, agree with the Appellate Assistant Commissioner and the Tribunal that the grant of relief to the assessed was correct and that the order of rectification proceeds on an erroneous basis.
(9) We would only like to add that even if another opinion could be entertained and the section said to be capable of two interpretations one as suggested by the learned counsel for the applicant and one as discussed above, still, the impugned action under Section 154 would have to be set aside. It is well-settled that the provisions of section 154 cannot be resorted to in order to make a revision in a matter of on which there could be two plausible interpretations. In this view of the matter also the Appellate Tribunal's action upholding the order of the Appellate Assistant Commissioner has to be held Justified.
(10) We are, thereforee, of opinion that the question referred to us has to be answered in the affirmative and in favor of the assessed, We so answer it