Special shipping assessment under section 44B governs non-resident freight income, and a refund claim was held time-barred.

A non-resident shipping company's freight income was assessed shipment-wise on a rough percentage basis under the special shipping provisions, and that treatment was held to fall within section 44B rather than the general assessment route. The fact that freight agents handled payment and practical compliance for port-clearance convenience did not change the character of the assessment or displace the non-resident principal as the person chargeable. Because the assessments were treated as valid section 44B assessments, the subsequent refund application had to comply with section 44C, and it was held to be time-barred; the refund was not available.

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Issues: Whether the assessments made in respect of freight earned by a non-resident shipping company were assessments under section 44B of the Indian Income Tax Act, and if so, whether the subsequent refund application was barred by section 44C.

Analysis: The assessment orders related to separate shipments, were made during the accounting year, treated the freight earnings of each shipment as taxable income on a rough percentage basis, and showed that the tax was charged on the non-resident principal's shipping income rather than under the general assessment provisions. The absence of formal compliance by the master in furnishing returns and paying tax did not take the orders out of Chapter V-A, because the Tribunal's finding was that the freight agents paid the tax under an arrangement made for port-clearance convenience. The existence of agents did not compel the Income Tax Officer to proceed only under the alternative general assessment route. The person chargeable under Chapter V-A remained the non-resident principal, even though the tax was payable through the master.

Conclusion: The assessments were validly made under section 44B, and the refund claim was governed by section 44C and was barred by time.

Final Conclusion: The reference was answered in favour of the revenue and the assessee was held not entitled to the refund sought.

Ratio Decidendi: Where a non-resident shipping business is assessed on a shipment-wise basis under the special shipping provisions, the assessment is under section 44B notwithstanding practical compliance by freight agents, and any refund claim must satisfy the limitation and adjustment mechanism in section 44C.

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