TaxTMI 
TaxTMI 
1957 (5) TMI 5
X X X X Extracts X X X X
X X X X Extracts X X X X
....y failed to deduct from out of the remuneration paid to its managing agents, who were non-residents, the income-tax and the super-tax, which it, under the law, was required to do. It also paid to its auditors auditing fees and from out of this sum also it did not deduct the income-tax and super-tax under the provisions of the Patiala Income-tax Act. The two sums in dispute were Rs. 59,787-1-0 and Rs. 581-4-0 respectively. For the assessment year 1949-50 also the assessee company failed to make the deduction from the remuneration paid to its managing agents and the income-tax deductible was Rs. 52,484-14-0 and super-tax Rs. 21,611-6-0. The Income-tax Officer took action against the assessee company under sections 18(3a) and 18(7) of the Pati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cided in accordance with the provisions of the Patiala Income-tax Act or the Indian Income-tax Act ? (2) Whether the appeals before the Appellate Tribunal fell to be decided in accordance with the provisions of the Patiala Income-tax Act or the Indian Income-tax Act ? (3) Whether, on the assumption that the assessee company was not bound to deduct tax, its appeals before the Appellate Assistant Commissioner were competent in law ?" The High Court decided that in regard to the assessment year 1948-49, the law applicable was the Patiala Income-tax Act and therefore no appeal lay to the Appellate Assistant Commissioner but in regard to the assessment year 1949-50 the Indian law became applicable and therefore the order of the Income-tax ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The provisions of section 2(14A) of the Indian Income-tax Act, 1922, show that the Act became applicable to Part B States as from the 1st April, 1950. The relevant provisions of this section are : "Section 2(14A). 'Taxable territories' means --- (d) as respects any period after the 31st day of March, 1950, and before the 13th day of April, 1950, the territory of India excluding the State of Jammu and Kashmir and the Patiala and East Punjab States Union : Provided that the 'taxable territories' shall be deemed to include --- (b) the whole of the territory of India excluding the State of Jammu and Kashmir --- (ii) as respects any period after the 31st day of March, 1950, for any of the purposes of this Act, and (iii) as respects a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of section 4A of the Indian Income-tax Act "as respects any period" meaning any period before or after 31st March, 1950, and the assessee was therefore liable to income-tax. Patanjali Sastri, C. J., who delivered the judgment of the Court said : "A close reading of that provision will show that it saves the operation of the State law only in respect of 1948-49 or any earlier period which is the period not included in the previous year (1949-50) for the purpose of assessment for the year 1950-51. In other words, there remained no State law of income-tax in operation, in any Part B State in the year 1949-50." This passage from the judgment supports the contention of the appellant that as regards income of the accounting year 1949-50 or t....