Limitation and double taxation relief: first day excluded in counting time, and relief depends on same income taxed twice.

The Bombay High Court treated the sixty-day period under section 66(1) of the Indian Income-tax Act, 1922 as a clear period, excluding the day of service of the Tribunal's order; the reference application was therefore within time and the limitation objection failed. On double taxation relief under section 49A, the Court held that relief turns on whether the same part of the total income was taxed both in India and under the State law, not on whether the income fell under the same head in both systems. The assessee was entitled to relief for the State income included in its Indian total income.

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Issues: (i) Whether the application for reference under section 66(1) of the Indian Income-tax Act, 1922 was barred by limitation by one day. (ii) Whether the assessee was entitled to double income-tax relief under section 49A of the Indian Income-tax Act, 1922 in respect of the amount of State income that entered into the computation of its total income in India.

Issue (i): Whether the application for reference under section 66(1) of the Indian Income-tax Act, 1922 was barred by limitation by one day.

Analysis: The period of sixty days prescribed by section 66(1) is to be computed as a clear period, and the day on which the Tribunal's order was served is excluded in counting time. The provisions of section 12 of the Indian Limitation Act, 1908 and section 9 of the General Clauses Act, 1897 support exclusion of the first day where a period is expressed as running from the date of service. On that computation, the application filed on 30 January 1961 was within time.

Conclusion: The preliminary objection failed and the reference was held to be competent.

Issue (ii): Whether the assessee was entitled to double income-tax relief under section 49A of the Indian Income-tax Act, 1922 in respect of the amount of State income that entered into the computation of its total income in India.

Analysis: Relief under section 49A depends on the same income being subjected to tax both under the Indian Act and under the State law for the corresponding year. The expression "income" in the scheme of the Act refers to the total income chargeable to tax, though it is computed under different heads. If the State income has entered into the computation of the Indian total income and has augmented the amount on which Indian tax was paid, the requisite identity is satisfied to the extent of that numerically identical amount. The relief is therefore not confined to a comparison of the same head of income, but extends to the part of the total income that suffered tax in both jurisdictions.

Conclusion: The assessee was entitled to double income-tax relief in respect of the amount of State income that formed part of its Indian total income.

Final Conclusion: The reference was answered in favour of the assessee, and the department was directed to bear the assessee's costs.

Ratio Decidendi: For limitation under section 66(1), the first day of service is excluded in computing the sixty-day period, and for double taxation relief under section 49A, the decisive test is whether the same part of the total income has been taxed both in India and in the State, not whether the income falls under the same head in both systems.

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