WALLACE BROTHERS AND CO LTD Vs. COMMISSIONER OF INCOME TAX BOMBAY CITY
LAWS(BOM)-1954-3-20
HIGH COURT OF BOMBAY
Decided on March 11,1954

WALLACE BROTHERS AND CO LTD BOMBAY Appellant
VERSUS
COMMISSIONER OF INCOME TAX BOMBAY CITY Respondents


Cited Judgements :-

BURMAH OIL CO LTD VS. INCOME TAX APPELLATE TRIBUNAL CALCUTTA BENCH [LAWS(CAL)-1957-6-21] [REFERRED TO]


JUDGEMENT

- (1.)THIS reference as originally presented to us seemed to confront us with a very formidable problem, but when the matter is analysed a little, as it happens in most matters that arise under the Income-tax Act, really the question that we have to decide is a very simple one.
(2.)THE facts on which the reference is based may be briefly stated. The assessee company holds shares of the Bombay Burma Trading Corporation and in the year of assessment, 1939-40, the year of account being April, 1938, to March, 1939, it received dividends in respect of those shares amounting to Rs. 6,86,279. The Burma Co. was subjected to tax in respect of the income represented by that dividend in the sum of Rs. 1,17,987. Therefore in the assessment of the assessee company, by reason of Section 16 (2) of the Income tax Act and by the process of what is known as grossing up, the dividend income was shown as Rs. 8,04,266, being made up of the net dividend received by the assessee company and by the tax paid by the Burma Co. on the income represented by that dividend. It also appears that under Section 18 (5) the assessee company was given credit for the tax paid by the Burma Co. , viz. , in the sum of Rs. 1,17,987. The assessee company then made an application under Section 48 for refund under Section 49a on the ground that its dividend income had been subjected to double taxation in India and in the U. K. and it was entitled to relief in respect of double taxation. The Taxing Department on a calculation of the income of the assessee company on the basis of Rs. 8,04,266 came to the conclusion that the assessee company was entitled to relief in sum of Rs. 35,186-12-0. In the meanwhile, what had happened was that the Burma trading Corporation had been given relief in respect of double taxation and the assessee's share of that relief was Rs. 47,474 and the Taxing Department, as it had come to the conclusion that the assessee company was only entitled to relief in the sum of Rs. 35,186-12-0, deducted this amount from the sum of Rs. 47,474 and made a claim against the assessee company in the sum of Rs. 12,287-4-0. It is in respect of this amount that this reference has been made.
(3.)A preliminary objection was taken by Mr. Joshi that no appeal lies to the Tribunal and therefore no reference is competent to this Court, and for that purposed Mr. Joshi referred to the notification issued under Section 49a, which is notification No. 50 dated 25th September, 1948, and clause 6 of that notification provides that an application for refund under these rules may lie to the Appellate Assistant Commissioner of Income-tax from any order of the Income Tax Officer disallowing the claim for refund wholly or in part, and Mr. Joshi's contention is that a special appeal is provided by this notification to the Appellate Assistant Commissioner and no further appeal is provided to the Tribunal and no reference lies under this notification to the High Court. Mr. Joshi draws our attention to the relevant provisions of the Act with regard to appeals. Section 30 provides for an appeal to the Appellate Assistant Commissioner, Section 31 provides for hearing of the appeal, and Section 33 provides for an appeal by an assessee objecting to an order passed by an Appellate Assistant Commissioner under Section 28 or Section 31, and it is pointed out that in Section 30 no appeal is provided under Section 49a, but the only appeal is under Section 48, 49 or 49f of the Act, and therefore the contention is that as Section 30 does not provide for an appeal to the appellate Assistant Commissioner and as an appeal the Tribunal lies against an order made by the Appellate Assistant Commissioner, an order made under Section 49a but under Section 48. Chapter VII of the Act deals with refunds and Section 49a and the other sections deal substantively with the reliefs to which the assessee is entitled by way of refund. Section 48 is procedural and it provides for an application for refund, and Section 30 of the Act provides for an appeal against an order made by the Income tax Officer under Section 48. Mr. Joshi says that looking at the order of the Income tax Officer, the order was made under Section 49a. The proper way to describe the legal position would be that an application was made by the assessee under Section 48 for relief under Section 49a and an order was made by the Income-tax Officer on that application. Therefore, clearly, the order of the Income-tax Officer would be under Section 48, although it would be in respect of a relief claimed under Section 49a. If the order was made under Section 48 then an appeal would lie to the Appellate Assistant Commissioner and an appeal under Section 33 would lie to the Tribunal and a reference would be maintainable against the decision of the Tribunal under the relevant provisions of the Act. Therefore, in our opinion, there is no substance in that contention of Mr. Joshi.


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