TaxTMI 
TaxTMI 
1954 (12) TMI 28
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....t year 1939-40 disclosing an assessable income of Rs. 42,510. The statement of the company's income was not however accepted by the Income-tax Officer, and as the company did not produce its account books when required to do so that Officer acted under section 23(4) of the Act and determined the sum payable by the assessee to be Rs. 8,17,137. This assessment order was made on the 29th June, 1942. Thereafter, on the 16th September, 1944, the Income-tax Officer's successorin-office, being of opinion that the assessee had in respect of the year in question distributed less than sixty per cent. of its assessable income, made with the previous approval of the Inspecting Assistant Commissioner an order under section 23A. Proceedings were ....
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....iated only by the Income-tax Officer who had made the assessment order. In view of the provisions of section 64(4) which provides that "Notwithstanding anything contained in this section every Income- tax Officer shall have all the powers conferred by or under this Act on an Income-tax Officer in respect of any income, profits or gains accruing, or arising or received within the area for which he is appointed." Learned counsel now state that the first and second questions may be deemed to involve only one matter, namely whether an order under section 23A can be passed after an assessment order had been made under section 23(4). The assessment order in the present case was made on the 29th June, 1942, and the argument for the ass....
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.... profits and gains distributed as dividends "for that previous year" are less than sixty per cent. of the assessable income of the company. In our opinion the section makes it quite clear that an order under it may be made on the basis of a failure by the assessee to distribute a dividend of the minimum amount in a year which has already passed, and we can find nothing elsewhere in the Act which places the restriction on the power of the Income-tax Officer for which the assessee contends. An order cannot be made under this section before the end of a period of six months from the date upon which the accounts for the year in question are laid before the assessee company in general meeting and after the Income-tax Officer has taken into accou....
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....ssable income of the company.....as computed for income-tax purposes and reduced by the amount of income-tax and super-tax payable by the company in respect thereof" and the argument on behalf of the assessee is that whereas the phrase "assessable income", where it first appears, means the income of the company as disclosed in its balance sheet and accounts, it means, when used on the second occasion, the company's assessed income. We do not think this argument can be sustained. "Assessable income" in our opinion means income assessable to income- tax under the Indian Income-tax Act and has the same meaning wherever it is used in this sub-section. The distinction sought to be made by the assessee is based on the phrase "as computed f....
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....ome-tax under the Indian Income-tax Act. No hardship can be caused to the assessee by this interpretation as it is abundantly clear that a dividend has to be declared out of the actual profits and not out of what may be the notional income for the purposes of assessment. Sri G. S. Pathak who appeared for the assessee invited our attention to the cases of Sir Kasturchand v. Commissioner of Income- tax, Bombay City [1949] 17 I.T.R. 493, to which we have already referred, and Ezra Proprietary Estates Ltd. v. Commissioner of Income-tax, West Bengal [1950] 8 I.T.R. 762. Both these cases were concerned with the circumstances which are to be taken into account by the Income-tax Officer in deciding whether an order should be made under section 23A,....