Statutory dividend threshold and further distribution window survive reassessment absent proven nondisclosure under section 23A(2)(iii).

A company that has already distributed dividends meeting the statutory threshold on the basis of its return may still retain the further three-month opportunity under section 23A(2)(iii) if the later enhancement of assessed income does not fall within the specified exceptions. A reassessment under section 34(1)(a) does not, by itself, establish failure to disclose fully and truly, so the protection is not automatically lost. The discussion links the dividend-distribution requirement, the statutory locus poenitentiae, and the limits on rectification under section 35 before penal super-tax can be enforced.

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Issues: Whether a company that had already distributed dividends equal to the statutory percentage on the basis of its return was entitled to the further three-month period under section 23A(2)(iii) after reassessment enhanced the total income, and whether the rectification under section 35 could stand when the alleged failure to disclose fully and truly was not established.

Analysis: Section 23A(1) required dividend distribution within twelve months after the close of the previous year, but section 23A(2)(iii) carved out a separate protection for cases where the company had filed a return, had already distributed not less than sixty per cent of the returned income reduced by the permissible deductions, and the higher assessed income arose otherwise than from the proviso to section 13, section 23(4), or failure to disclose fully and truly. The higher assessment here was made on a reopened basis after a disputed liability was added, while the company had already declared dividends before that reassessment. In these circumstances, the company was entitled to the statutory opportunity to make a further distribution within three months before any penal super-tax order could validly be enforced. The technical label of reassessment under section 34(1)(a) did not, on these facts, establish a failure to disclose fully and truly so as to defeat the protection of section 23A(2)(iii).

Conclusion: The company was entitled to the three-month locus poenitentiae under section 23A(2)(iii), and the rectification order under section 35 could not be sustained without granting that opportunity.

Final Conclusion: The writ was allowed, the rectification and demand were quashed, and the petitioner was given time in accordance with law to make any further dividend distribution required to avoid the super-tax consequence.

Ratio Decidendi: Where a company has already satisfied the statutory dividend threshold on the basis of its return, a later enhanced assessment does not by itself exclude the protection of section 23A(2)(iii), and the company must be afforded the prescribed further opportunity before penal super-tax is levied.

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