WALLACE BROTHERS AND CO LTD Vs. COMMISSIONER OF INCOME

JUDGEMENT

(1.) This is an appeal by leave of the Federal Court of India from a judgment of that Court dismissing an appeal by the appellant, Wallace Brothers and Co. Ltd., from a judgment of the High Court of Bombay answering in favour of the respondent the Commissioner of Income - tax, Bombay District certain questions of law referred to the High Court by the Income - tax Appellate Tribunal.

(2.) Two questions are in issue: first the validity of certain provisions of the Indian Income - tax Act, 1922 - 1939, by virtue of which there was made on the appellant Company an assessment to income - tax on income which included income arising without British India, and second, the jurisdiction of a particular income - tax officer to make that assessment.

(3.) The directly relevant provisions of the Income - tax Act, 1922 - 1939, are contained in Ss. 3, 4, 4A and 64. These so far as it is necessary to state them are as follows: 3. Where any Act of the Central Legislature enacts that Income - tax shall be charged for any year at any rate or rates tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of this Act, in respect of the total income or the previous year of every individual, Hindu undivided family, company and local authority and of every firm and other association of persons or the partners of the firm or members of the association individually. 4. -(1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which- (a) are received or are deemed to be received in British India in such year by or on behalf of such person, or (b) if such person is resident in British India during such year- (i) accrue or arise or are deemed to accrue or arise to him in British India during such year, or (ii) accrue or arise to him without British India during such year, or ... 4A. For the purposes of this Act- (c) a company is resident in British India in any year (a) if the control or management of its affairs is situated wholly in British India in that year, or (b) if its income arising in British India in that year exceeds its income arising without British India in that year. 64-(1) Where an assesses carries on a business, profession or vocation at any place, he shall be assessed by the Income - tax Officer of the area in which that place is situate or, where the business, profession or vocation is carried on in more places than one, by the Income - tax Officer of the area in which the principal place of his business, profession or vocation is situate.