Double taxation relief under the 1936 Order governed assessment year 1947-48, and section 50 did not bar the claim.

For assessment year 1947-48, relief from double taxation was governed by the India and Burma Income Tax Relief Order, 1936, because the right had to be determined by the law in force at the commencement of the year and no contrary statutory direction displaced that position. The later constitutional and legislative changes, including the amended section 49A, did not alter the applicable basis for that year. The claim for relief under the 1936 Order was also not barred by section 50 of the Income-tax Act, 1922, because the Order was an independent instrument and its prescribed forms did not impose a limitation period. The rejection of the claim on limitation was therefore unsustainable.

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Issues: (i) What was the governing law for relief from double taxation in respect of the assessment year 1947-48, when the legal position changed during that year? (ii) Whether the claim for relief under the India and Burma Income Tax Relief Order of 1936 was barred by section 50 of the Income-tax Act, 1922.

Issue (i): What was the governing law for relief from double taxation in respect of the assessment year 1947-48, when the legal position changed during that year?

Analysis: The relevant right had to be determined with reference to the law in force in the assessment year. The 1936 Relief Order governed double-taxation relief on 1 April 1947, but its foundation ceased after the constitutional and legislative changes during the year. The amended section 49A came into force later in the year, while section 49D remained unchanged. In the absence of an express statutory direction, the proper approach was to apply the law as it stood at the commencement of the assessment year, namely the 1936 Order.

Conclusion: The governing law was the India and Burma Income Tax Relief Order of 1936.

Issue (ii): Whether the claim for relief under the India and Burma Income Tax Relief Order of 1936 was barred by section 50 of the Income-tax Act, 1922.

Analysis: The 1936 Order was an independent instrument derived from section 159 of the Government of India Act, 1935, and not from the Income-tax Act, 1922. The prescribed forms in rules 40A and 40B of the Indian Income-tax Rules, 1922, did not impose any limitation period, and the provisions of section 50 could not curtail a right created by the 1936 Order while it remained in force. The departmental authorities had therefore proceeded on an erroneous basis in rejecting the claim solely on limitation.

Conclusion: Section 50 of the Income-tax Act, 1922 did not bar the claim under the 1936 Order.

Final Conclusion: The orders rejecting the petitioner's application on limitation were set aside, and the matter was sent back for fresh consideration of entitlement and quantum of relief under the 1936 Order.

Ratio Decidendi: Where an independent relief order governs a substantive tax right, the limitation provisions of the Income-tax Act do not apply unless the order itself so provides, and in the absence of a contrary statutory direction the law in force at the commencement of the assessment year applies.

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