Dipak Kumar Sen, J. - (1.) The facts and/or admitted in these proceedings may shortly be stated as follows : M/s. Blue Star Engineering Co. (Pvt.) Ltd., the assessee, is a company in which the public are not substantially interested. In the relevant assessment year 1968-69, the previous year ending on the 31st December, 1967, it was assessed to income-tax. The assessment was completed on the 24th December, 1968, under Section 143(3) of the I.T. Act, 1961. The distributable income of the assessee for the purposes of Section 104 was determined to be Rs. 1,81,269. The dividend required to be distributed was 60% of the said amount, being Rs. 1,08,762. It was found that the assessee declared dividend of only Rs. 1,03,717 on the 9th May, 1968. As the shortfall was below 10% of the distributable surplus the ITO issued a notice dated the 8th December, 1972, under Section 105 of the I.T. Act, 1961, calling upon the assessee to declare a further dividend as required under the statute.
(2.) The assessee did not comply with this notice and the ITO thereafter forwarded a proposal for initiating proceedings under Section 104 of the Act to the IAC. The IAC gave an opportunity to the assessee to make its representation in respect of the proposed action, which the assessee did and after considering the same the IAC made an order under Section 107 of the Act holding that the provisions of Section 104 were applicable in the facts and approved the proposed action of the ITO. Thereupon, the ITO passed an order under Section 104. levying an additional super-tax on the assessee of Rs. 28,695, being 37% of the undistributed income as reduced by the dividend actually declared.
(3.) In the meantime, pursuant to an order dated the 16th June, 1969, passed by this court in Company Petition No. 280 of 1969, the assessee merged with its parent company, namely, M/s. Blue Star Engineering Co. (Bombay) Pvt. Ltd.;