Dwarka Prasad, J. - (1.) AS identical questions of law have been referred to this court by the Income-tax Appellate Tribunal, Delhi Bench 'B', we heard the consolidated reference cases together and set out our answers to the questions referred to this court, in our orders dated December 19, 1983. We had then stated that we shall give our reasons for the answers to the three questions referred to us by the Income-tax Appellate Tribunal later on. We now proceed to give the reasons for the answers as contained in our orders dated December 19, 1983, and which are reproduced below : "Our answer to the first question referred to this court is that the assesses is entitled to the benefit of concision or rebate under para, 6A of the Part B States (Taxation Concessions) Order, 1950, in the course of reassessments under Section 34 of the Indian Income-tax Act, 1922, in respect of the whole of the dividend income, including the actual dividend income received by him, irrespective of the fact that the question of allowing such concession or rebate in the computation of tax was not raised by the assessee in the original assessments. Thus, question No. 1 is answered in the affirmative. Question No. 2 referred to this court by the Appellate Tribunal is also answered in the affirmative and we hold that the Tribunal was competent to consider the question about the application of proper rate of rebate in respect of dividend income arising out of Part B States relating to the assessment years in question. AS regards question No. 3, our answer is that the assessee was entitled to rebate on dividend income arising out of Part B States under Para 6A of the aforesaid concession order for the assessment years 1953-54 and 1954-55 at the rate of 20% and 10% respectively."
(2.) THE assessees in both the cases are individuate, deriving their income from dividends on shares in various companies, besides income from other personal business. THE assessment years in question in the case of Rangnath Bangur are 1953-54, 1954-55 and 1955-56 corresponding to the previous years ending 3Ist day of March of the years 1953, 1954 and 1955 respectively. In the case of Purshottam Dass Bangur, the assessment years in question are 1953-54 and 1954-55 corresponding to the previous years ending Match 31, 1953 and March 31, 1954. THE assessee held shares in various companies, most of which had their registered offices in the relevant years of assessment in the territories which were then known as "Part B States". THE ITO, while determining the total income of the assessee for the aforesaid assessment years, grossed up the dividend income and bifurcated it into two portions, one relating to Part A States and another relating to Pail B States while calculating the tax payable by the assessees. THE assessees did not claim and the ITO did not allow them any rebate on such dividend income which was allowable under para. 6A of the Part B States (Taxation Concessions) Order, 1950 (hereinafter referred to as "the Concessions Order"). Against the original assessments made by the 110, the assessees filed appeals before the AAC, but even in those appeals, rebate allowable under Para. 6A of the Concessions Order was neither claimed nor allowed. Subsequently, the ITO took action under Section 23-A of the Indian I.T. Act, 1922 (hereinafter referred to as "the Act"), against some of the companies in which the assessees hold shares, as a result of which undistributed profits of such companies were deemed to have been declared as dividends distributed to the shareholders of the companies, including the assessees as a consequence thereof. The original assessments of both the assessees, made under Section 23(3) of the Act, were reopened and proceedings under Section 34(1)(b) of the 1922 Act were taken to assess the deemed dividend income in the hands of the two assessees. The ITO revised the assessments of the assessees in respect of the assessment years referred to above and redetermined the total income of the assessees for the aforesaid assessment years, after including therein the deemed dividend income. But while calculating the tax in respect of these assessees, the ITO allowed rebate to the assessees under Para. 6A of the Concessions Order only in respect of the notional deemed dividend income allocated to Part B States. In these reassessment orders, the ITO did not allow the assessees rebate under Para. 6A of the Concessions Order in respect of the dividends actually declared and received by the assessees, which were already subjected to tax in the original assessment orders. The assessees preferred appeals before the AAC in respect of the reassessment orders and sought to raise the question that rebate ought to have been allowed under Para. 6A of the Concessions Order not only on the deemed dividend income but also on the dividend income which had actually been received by the assessees. However, the AAC did not allow. the assessees to raise the aforesaid ground. Thereafter, the assessees filed appeals before the Income-tax Appellate Tribunal, Delhi Bench ' B ', Delhi (hereinafter called "the Tribunal") who remanded the matters to the AAC with the direction to dispose of the appeals afresh after considering the specific grounds raised by the assessees before him. In pursuance of the directions of the Tribunal, the AAC heard the appeals, of the assessees again and held that the notional dividend income which had been included in the revised assessment orders should be grossed up and tax should be calculated on the entire deemed dividend income at the concessional rate applicable to Part B States. The AAC, however, rejected the contention of the assessees that tax should also be calculated at the concessional rates applicable to Part B States, on the actual dividend income, which was received by them from the companies in. Part B States and which was included in the original assessment orders, on the ground that the original assessments made under Section 23(3) of the Act had become final and questions affecting these assessments could not be agitated by the assessees in appeals filed against the reassessment orders. Thereafter the assessees again filed appeals before the Tribunal. While deciding the appeals preferred by the assessees, both the learned members of the Tribunal were in agreement on the question that the rebate Tinder para. 6A of the Concessions Order was allowable also on the actual dividend income as originally assessed besides the notional dividend income; brought to tax subsequently in thee reassessment proceedings. They, however, differed as to the assessment years and the rates at which the rebate was allowable. In the case of Rangnath Bangur, the difference of opinion between the Accountant Member and the Judicial Member also related to the question as to whether rebate could be allowed under para. 6A of the Concessions Order in respect of assessment year 1955-56 and if so, the rate applicable thereto. According to the Accountant Member the rebate was allowable on the dividend income of the assessees for all the three assessment years, namely, 1953-54, 1954-55 and 1955-56, at 40%, 20% and 10% respectively. However, the Judicial Member look the view that rebate was allowable for the years 1953-54 and 1954-55 at the rate of 20% and 10% only and that no rebate was allowable on the dividend income relating to the assessment year 1955-56. On account of the difference of opinion between the two learned Members of the Tribunal, the following three points were referred by them to the President, under Section 5-A(7) of the Act : "1. Whether the assessee is entitled to rebate under para. 6A of Part B States (Taxation Concessions) Order, 1950, for the assessment year 1955-56 ? If yes, at what rate ? 2. Whether the assessee is entitled to rebate under sub-para. A of Para. 6 of the Concessions Order at the rate of 20% and 10% in the assessment years 1953-54 and 1954-55 respectively? 3. Whether the rebate allowable under the Concessions Order is to be recomputed in respect of deemed dividend income only or in respect of deemed dividend income as well as actual dividend income ? "
(3.) IN the case of Purshottam Dass Bangur, as the assessment relating to the year 1955-56 was not the subject-matter of these proceedings, only questions Nos. 2 and 3 mentioned above were referred by the two members of the Tribunal to the President. Learned President concurred with the view taken by both the members in respect of the third point and directed that rebate was allowable under Para. 6A of the Concessions Order in respect of the entire dividend income, including the actual dividend income received by the assessees, although the same was not allowed in the original assessment orders passed under Section 23(3) of the Act. In respect of points Nos. 1 and 2, the learned President agreed with the accountant member that the assessee was entitled to rebate under Para. 6A of the Concessions Order for the assessment year 1955-56 at the rate of 10% and further that the assessee was entitled to rebate for the assessment years 1953-54 and 1954-55 at the rate of 40% and 20% respectively. The Commissioner, Jaipur, requested the Tribunal, in the cases of both the assessees, to draw up a statement of case and refer to this court questions of law arising out of its order. The assessees raised objections to the reference of these questions proposed by the Commissioner and proposed other questions for being referred to the High Court. The Tribunal by its order dated May 23, 1970, in the case of Rangnath Bangur and November 28, 1970, in the case of Purshottam Dass Bangur, have referred the aforesaid three questions to this court for its opinion. ;