TaxTMI 
TaxTMI 
1973 (5) TMI 25
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....pect of which agricultural income-tax was payable in Pakistan. The assessee's head office had been, however, located in Calcutta and as such the business was controlled and maintained wholly from the taxable territories under the Indian Income-tax Act, 1922. Consequently its income as arising from manufacture and sale of tea had to be assessed under the Indian Income-tax Act, 1922, and in the assessments for the tax years 1957-58, 1958-59 and 1959-60 it was treated as a resident company. The assessee was, therefore, entitled to deduction from the Indian income-tax payable by it in respect of the above assessment years certain sums to be calculated in accordance with the provisions of section 49D(3) of the Indian Income-tax Act, 1922, the material portion of which at the relevant time provided as follows : " 49D. (3) If any person who is resident in the taxable territories in any year proves that in respect of his income which accrues or arises to him during that year in Pakistan he has paid in that country, by deduction or otherwise, tax payable to the Government under any law for the time being in force in that country relating to taxation of agricultural income, he shall be en....
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....which the company was entitled under the Agreement for the Avoidance of Double Taxation and such relief should be considered to be the relief under section 49A of the Act and, therefore, was a relief under " the other provisions of the Act ". The assessee, thereafter, preferred an appeal before the Income-tax Appellate Tribunal which following its consolidated order dated 9th November, 1965, in respect of this case relating to the assessment years 1951-52, 1955-56 and 1956-57 held that in computing the " Indian rate of tax " within the meaning of Explanation (ii) to section 49D(3), the abatement granted under the agreement with Pakistan should not be deducted from the income assesed in India. The Tribunal, therefore, allowed the appeal for all these years. For the assessment years, which are the subject-matter of the present reference, the assessee did not raise any grounds challenging the Income-tax Officer's jurisdiction in the matter of passing the orders under section 49D(3) unlike the orders of the Income-tax Officer for the earlier years referred to above which had been passed under section 154 of the Act by way of rectification of the original assessment orders for those ....
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....n agreement (a) with the Government of any country outside India for the granting of relief in respect of income on which have been paid both incometax under this Act and income-tax in that country, or (b) with the Government of any country outside India for the avoidance of double taxation of income, profits and gains under this Act and under the corresponding law in force in that country ; and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement. It is to be mentioned that at that time the said clauses were contained in a chapter dealing with refund, which was Chapter VII. The heading of the clause, as would be apparent, postulated that it was dealing with two kinds of subjects, viz., it was, dealing with the agreement for granting relief in respect of double taxation and also with the agreement for avoidance of double taxation. The legislature has used the disjunctive expression " or after the words " in respect of double taxation or for avoidance thereof By this section the legislature had authorised the Central Government to enter into an agreement with the country outside India for either of these two cont....
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....Act, 1922, against the refusal of the Income-tax Officer to grant an abatement under the Agreement. Dealing with the scheme of the Agreement and the relevant section the court observed, at page 679, of the decision as follows : " It is clear, therefore, that if an assessee desires to avoid double taxation under the A. A. D. T., he must take steps to obtain an abatement at the time of the assessment or see that the Income-tax Officer makes an estimate of the abatement and keeps the same in abeyance. If, however, the assessee has fully paid the tax which has been assessed and has not appealed against the order of assessment, which has become binding, he cannot obtain any advantage under A. A. D. T. and there is no machinery for making an application for abatement in such a case or for applying for a refund. The machinery by which an assessment is made and an application for refund is entertained in a normal case is provided in the body of the Act. A. A. D. T. is no part of the Act itself, and, therefore, if any benefit is claimed under the A. A. D. T. then the assessee must invoke the special machinery provided therein, and cannot go beyond it. As I have already pointed out, the A....
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....n order to be entitled to deduction it should be "a relief due under the provisions of the Act ". Therefore, it must be : (i) a relief, (ii) that relief must be due, and (iii)any such right to get a relief under the other provisions of the Act (sic). The question, therefore, is whether any benefit which is permitted to an assessee by virtue of an agreement by which action is permitted by the statute can be said to be a benefit due under the Act. It has to be mentioned that the Act does not deal with the question of relief or benefit by way of deduction or abatement in case of double taxation. The Act merely authorises the Central Government to enter into certain kinds of agreement but the authority of the Central Government is of a two-fold nature. The Central Government is authorised by section 49A to enter into an agreement for relief in respect of double taxation. Secondly, the Central Government is also authorised to enter into an agreement for avoidance of double taxation. These two are different authorities ; if abatement in respect of double taxation would have covered the agreement of the authority to give a relief, then it would not have been necessary to provide by two di....
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....mber he claimed compensation from the plaintiffs in respect thereof. Thereafter, on the 28th December, the plaintiffs agreed verbally with Archbold to pay him a sum of 19s. 2d. per week as compensation under the Workmen's Compensation Act and a memorandum of this agreement was duly sent to the Registrar of the County Court and recorded by him in accordance with the eighth provision of the 2nd Schedule to the Act. The plaintiffs had continued to pay the said workman Archbold the stipulated sum of 19s. 2d. a week under the agreement and had taken receipts from him as for compensation paid under the Act. They in that action sought to be indemnified by the defendants under section 6 of the Act which has been mentioned herein before. It has to be noted that section 6 provided that compensation had to be payable under the Act and this section further provides that compensation should be payable under the Act, if there were circumstances creating a legal liability. Now, in that case, obviously the agreement between the plaintiffs and Archbold to pay the sum of 19s. 2d. created a legal liability with the plaintiffs. The defendants had contended that there was no proceeding in respect of se....
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....Commissioner of Income-tax, it must be held that relief is not due under "the other provisions of the Act ". The other aspect of the matter is whether the expression "relief" should be construed in terms of relief against double taxation as contemplated under clause (a) of section 49A or should be construed in a broad liberal sense to include all kinds of benefits given to a taxpayer. Where there has been no imposition of tax, there could not be question of granting any relief and that "imposition of tax" contemplates cases where taxes have already been paid or imposed while clause (b) of section 49A envisages a situation where tax had not been imposed. It is true that relief is a word which is capable of being construed also in a broad liberal sense but in this connection it has to be borne in mind that the legislature in section 49A has maintained this distinction between an agreement for relief against double taxation and an agreement for avoidance of double taxation. Secondly, as mentioned hereinbefore, as construed by the Division Bench, section 49A at that time and clause (a) of the present section 49A deal with the relief while section 49AA or clause (b) of the present se....