Section 172 shipping tax relief depends on timely regular assessment; treaty reduction and refund claims cannot bypass the limitation.

Section 172 for occasional shipping creates a special summary assessment scheme, and the option to seek regular assessment under section 172(7) must be exercised within the relevant assessment year. Once that period expires, the summary assessment becomes final and the statutory route for refund based on regular assessment is unavailable. Treaty relief reducing Indian tax by 50% under the India-Greece DTAA was available only through timely use of section 172(7), not after finalisation of the summary assessment. A refund claim under section 237 read with rule 41 was also not independently maintainable because the general refund machinery could not override the specific, time-bound scheme in section 172.

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Issues: (i) Whether a claim for regular assessment and refund under section 172(7) of the Income-tax Act, 1961 could be entertained after the expiry of the relevant assessment year; (ii) whether relief of 50% reduction in tax under the India-Greece double taxation agreement could be claimed without invoking section 172(7) within time; (iii) whether a refund claim under section 237 read with rule 41 of the Income-tax Rules, 1962 was independently maintainable.

Issue (i): Whether a claim for regular assessment and refund under section 172(7) of the Income-tax Act, 1961 could be entertained after the expiry of the relevant assessment year.

Analysis: Section 172 makes special provision for occasional shipping and contemplates a summary assessment under sub-section (4). Sub-section (7) gives the assessee an option to seek regular assessment of total income and consequential adjustment of tax paid, but that option must be exercised before the expiry of the assessment year relevant to the previous year in which the ship departed from an Indian port. Once that period expires, the summary assessment becomes final and the statutory route for refund based on regular assessment is no longer available.

Conclusion: The claim under section 172(7) was barred by time and could not be entertained.

Issue (ii): Whether relief of 50% reduction in tax under the India-Greece double taxation agreement could be claimed without invoking section 172(7) within time.

Analysis: The treaty provision reducing Indian tax by 50% was expressly subject to the scheme of section 172. It did not affect the operation of sub-sections (1) to (6) of section 172, and it applied only when an adjustment was made under sub-section (7). Therefore, treaty relief was available only through the statutory mechanism of timely regular assessment under section 172(7), not after the summary assessment had become final.

Conclusion: The treaty-based 50% reduction was not available to the assessee because section 172(7) had not been validly invoked in time.

Issue (iii): Whether a refund claim under section 237 read with rule 41 of the Income-tax Rules, 1962 was independently maintainable.

Analysis: The refund machinery under rule 41 contemplated a proper return supporting regular assessment. In the present context, the required return was the one contemplated by section 172(7). Further, the tax paid was under section 172 and not tax paid under section 199 in the manner contemplated by the refund form and rule. The general refund provisions could not override the specific and time-bound scheme of section 172.

Conclusion: The refund claim under section 237 read with rule 41 was not maintainable.

Final Conclusion: The statutory scheme governing occasional shipping required a timely election for regular assessment, and neither the treaty relief nor the general refund provisions could be used to bypass the limitation embedded in section 172.

Ratio Decidendi: Where a special charging and refund mechanism provides that an assessee must elect regular assessment within a prescribed period, the assessee cannot seek refund or treaty-based adjustment after that period by resorting to general refund provisions.

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