https://www.taxtmi.com/caselaws?id=174839 Additional income-tax on excess dividend was held not chargeable under section 3 of the Income-tax Act, 1922, because the charging provision permits tax only on total income and the rate must bear a real relation to that income or a part of it. A levy triggered instead by an external factor, namely dividend distributed beyond a permitted ceiling, was outside the scope of income tax and could not be sustained as a valid charge under the First Schedule to the Indian Finance Act. The provision was treated as penal in character, but it could not be imposed through section 3 as a charging mechanism for income-tax; the issue was answered in favour of the assessee. en-us Fri, 03 Aug 1956 00:00:00 +0530 Sat, 24 Oct 2015 09:47:32 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=174839 Additional income-tax on excess dividend was held not chargeable under section 3 of the Income-tax Act, 1922, because the charging provision permits tax only on total income and the rate must bear a real relation to that income or a part of it. A levy triggered instead by an external factor, namely dividend distributed beyond a permitted ceiling, was outside the scope of income tax and could not be sustained as a valid charge under the First Schedule to the Indian Finance Act. The provision was treated as penal in character, but it could not be imposed through section 3 as a charging mechanism for income-tax; the issue was answered in favour of the assessee. Case-Laws Income Tax Fri, 03 Aug 1956 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=174839