Applicable tax rate means the actual rate after rebate, not the abstract Finance Act rate, for excess dividend computation.

The phrase "at the rate applicable to the total income of the company" under the Income-tax Act, 1922 was construed to mean the rate actually applied in the particular case after giving effect to the rebate under the Part B States (Taxation Concessions) Order, 1950. The statutory context of the charging scheme and First Schedule showed that the words could not be limited to the abstract unreduced Finance Act rate. The explanation to the proviso also indicated that the prescribed rate was to be reduced by rebate, and the reference to tax actually borne supported that construction. The interpretation therefore included the rebate in computing additional income-tax on excess dividend.

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Issues: Whether, for computing additional income-tax on excess dividend, the expression "at the rate applicable to the total income of the company" meant the rate prescribed generally by the Finance Act or the rate actually applied after taking into account the rebate granted under the Part B States (Taxation Concessions) Order, 1950.

Analysis: The relevant charging scheme under the Income-tax Act, 1922 and the First Schedule to the Finance Act required the Court to read the disputed words in their statutory context. The expression "rate applicable" was held to refer to the rate that was in fact applied to the company's total income for the relevant year, not merely the abstract rate prescribed in the Schedule. The explanation to the proviso itself contemplated reduction of the prescribed rate by the rebate, showing that the statutory phrase could not be confined to the unreduced general rate. The same phrase had to bear one meaning throughout the clause, and the method for computing "tax actually borne" supported inclusion of the rebate allowed under the Concessions Order.

Conclusion: The expression "at the rate applicable to the total income of the company" means the rate actually applied in the particular case after giving effect to the rebate.

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