Deb, J. - (1.) The following questions arc involved in this reference under Section 66(1) of the Indian Income-tax Act, 1922 : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Income-tax Officer had no jurisdiction to invoke Section 23A of the Indian Income-tax Act, 1922, for the second time? If the answer to question No. (1) be in the negative, then whether the Tribunal was right in holding that, the order under Section 23A of the said Act relating to the assessment year 1956-57 was not justified on merits ?"
(2.) The assessee is a private limited company. In course of proceedings under Section 23A of the Indian Income-tax Act, 1922, for the assessment years 1955-56 to 1961-62, it was found by the Income-tax Officer that, except for the assessment years 1955-56 and 1958-59, the dividends declared by the assessee were more than 60 per cent. but less than 90 per cent. In terms of a discussion between the Income-tax Officer and the assessee's representative the assessee wrote a letter to the Income-tax Officer stating therein that Hie assessee would declare additional dividends for the assessment years 1955-56 and 1958-59, respectively, and the proceedings in respect of the other years would be dropped which was confirmed by the Income-tax Officcr in his letter dated December 10, 1962, in the following terms: "The dividends proposed as per your letter under reference for declaration on 14th December, 1962, in respect of the assessment year 1955-56 and the year 1958-59 arc in order. Please confirm that.....the amounts of dividends as proposed were actually declared..... As regards the question of applicability of Section 104 of the new Act to the assessment year 1962-63, this is receiving my attention separately."
(3.) The dividends for those two years were declared by the assosscc who informed the Income-tax Officer about it. After two years, the successor Income-tax Officer, while looking into the records for the assessment year 1962-63, formed an opinion that the business carried on by the assessee "consisted wholly or mainly in the dealing in or holding of investments" and, therefore, he came to the conclusion that the statutory percentages applicable were 100% for the assessment years 1955-56 to 1960-61 and 90% for the assessment year 1961-62 and started the proceedings for the second time under Section 23A of the Act for these years and passed an order against the assessee.;