- (1.) THE Income-tax Appellate Tribunal, Chandigarh Bench, has referred the following question of law for our opinion : " Whether, on the facts and in the circumstances of the case, and on the interpretation of Section 2 (18) (b) (ii), the Appellate Tribunal was justified in holding that the assessee is a company in which the public are substantially interested ? "
(2.) IT is common ground that the Hindustan Milk Food Manufacturers Ltd. , Nabha, was registered as a private company in October, 1958. In the year 1960, by virtue of Section 43a of the Companies Act, 1956, the company became a public limited company, and on 30th March, 1968, the company deleted Article 3 from its articles of association,
(3.) THE effect of this deletion was that the benefit of the first proviso to Sub-section (1) to Section 43 of the Companies Act, 1956, was given up. The assessment year in question is 1968-69, The accounting year commenced on April 1, 1967, and ended on March 31, 3968. The assesses filed its return showing an income of Rs. 1,07,50,950 and claimed that it was a company in which the public were substantially interested within the meaning of Section 2 (18) of the Income-tax Act, 1961 (hereinafter referred to as "the Act" ). The Income-tax Officer after referring to Sub-clauses (i) and (iii) of Clause (b) to Section 2 (18) of the Act did not give a finding that these sub-clauses were not satisfied. He, however, proceeded on the basis of Sub-clause (ii) of Clause (b) of Section 2 (18) of the Act which is in the following terms : "the said shares were at any time during the relevant previous year the subject of dealing in any recognised stock exchange in India or were freely transferable by the holder to the other members of the public. ";