TaxTMI 
TaxTMI 
1965 (12) TMI 26
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....e-tax Act in Lahore for the assessment year 1947-48, against the demand of tax raised by the Income-tax Officer, 3rd Additional Business Circle, New Delhi, for the assessment year 1947-48 ? (2) Whether the order of the Tribunal directing a refund to the assessee out of the advance tax paid by him in Lahore is legal and valid ? " As the High Court rightly observed, the answer to the second question depends on the answer to the first question, and it is the first question alone which requires consideration. The relevant facts are stated in paragraphs 2 and 3 of the statement of the case, as follows : " 2. The statement of case relates to the assessment year 1947-48, the accounting period being the calendar year ending 31st December, 194....
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....ons of this section shall be treated as a payment of tax in respect of the income of the period which would be the previous year for an assessment for the financial year next following the year in which it was payable, and credit therefor shall be given to the assessee in the regular assessment." The Appellate Assistant Commissioner disallowed the claim. He observed : " I, however, find that the amount under section 18A was paid by the assessee to the Income-tax Officer, Lahore. The same Income-tax Officer made an assessment for this very year on 28th January, 1948, on a total income of Rs. 1,22,014 for income-tax and Rs. 52,780 for capital gains. He worked out the total tax payable by the assessee at Rs. 76,472-6-0. As a result of this ....
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.... that demand wiped out the amount standing to the credit of the assessee, the High Court observed : " It is, however, obvious that what may have been done by the Pakistan authorities in January, 1948, cannot be called a proceeding under the Indian Income-tax Act and the fact that the money paid by the assessee under the Indian Income-tax Act may have been seized by the Pakistan authorities or disposed of in some other manner, can in no way affect the right of the assessee under the Indian Income-tax Act. " In the result, the High Court answered both the questions in the affirmative. Mr. A. V. Viswanatha Sastri, the learned counsel for the appellant, contends before us that by virtue of section 18(3) of the Indian Independence Act, the I....
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....id. Previously the advance tax was to be adjusted towards a single regular assessment to be made by British India. After the Indian Independence Act the advance tax was liable to be adjusted against two regular assessments, one by India and one by Pakistan. In Pakistan, under section 18A(11), the Pakistan Government was entitled to adjust the advance tax paid by the assessee against its demand. Similarly, the Government of India was entitled to adjust the amount against its demand. It follows that if the assessee has been given credit for the advance tax by the Pakistan Government, he cannot claim that credit should be given to him by the Indian income-tax authorities. The effect of the Indian Independence Act was not to double the advance ....