TMI Blog1971 (12) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Income-tax Act, 1922, was issued to him. Thereafter, there was a settlement under section 34(1B) of the Income-tax Act. The settlement was signed by the assessee and his two brothers on January 17, 1957. It appears from the first clause of the settlement that the assessee and the department settled the figure of the concealed income between 1940-41 and 1946-47 at Rs. 1,33,57,833. After making certain allowable deductions, it was agreed by clause (5) that the income-tax payable by the assessee would be Rs. 31,92,353. Clause (6) provides that the said sum shall be paid by the assessee in five instalments. The first four instalments are of six lakhs of rupees and the last instalment is of Rs. 7,92,353. It was agreed that the first instalment would be payable on February 28, 1957 ; the second instalment on February 28, 1958 ; the third instalment on February 28, 1959 ; the fourth instalment on February 28, 1960, and the last instalment on December 31, 1960. It is not necessary to refer to the other clauses of the settlement. The Central Board of Revenue passed an order in accordance with the settlement on May 1, 1957. In the preamble of the order it is stated : " And whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal went on to add : " The order in this case had admittedly been passed on May 1, 1957, i.e., after a month of the valuation date. In the premises we have no hesitation in holding that the income-tax liability in this case was ascertainable on January 17, 1957, i.e., before the valuation date." The first passage in the judgment of the Tribunal records a finding of fact that the terms of the settlement were proposed by the Central Board of Revenue and were accepted by the assessee on January 17, 1957. Dr. Misra has submitted that the finding of fact is without support of any evidence. He says that there is no evidence on the record to show that the Central Board of Revenue had proposed the terms of the settlement. We can hardly enter into this question at this stage. No such question has been referred to us. We, accordingly, accept the finding of fact. In passing it may be noted that the various clauses of the settlement always open with the words " it is agreed ". Those words lend support to the finding of fact recorded by the Tribunal. We have already spoken about the order of the Central Board of Revenue dated May 1, 1957. In the preamble of the said order it is said t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation date. " We have already mentioned that by virtue of the settlement order under section 34(1B), the assessee was required to pay Rs. 31,92,353. The amount was payable in five instalments. It is a fact that only the instalments were paid as and when they fell due : the whole amount did not stand paid up on the relevant valuation dates for the assessment years 1959-60, 1960-61, 1961-62 and 1962-63. The argument of the assessee before the Tribunal was and here is that the sum due by him minus the instalments paid in the relevant years was a " debt owed " by him on the relevant valuation dates and that accordingly he is entitled to deduct the said balance of amount in accordance with the main part of section 2(m) of the Wealth-tax Act, while his net wealth is being calculated. The argument of the department is that it is true that it would be a " debt owed " by the assessee on the valuation date, but no deduction can be made on account of clause (iii)(b) of section 2(m). Which of these arguments should be accepted will depend on the true import of the word " outstanding " in sub-clause (b) of clause (iii) of section 2(m). So it is really a question of construction. Three princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bill has made explicit only the secondary object of the provision before us. The primary object appears to be to quicken speedy collection of the tax in arrears. An assessee who wants the tax in arrears to be deducted from the aggregate of asset, in the computation of his net wealth, should pay up the arrears within twelve months of the valuation date of the assessment year. If he does not pay it up before the said date, he would not get the benefit of the main part of section 2(m). We shall construe sub-clause (b) of clause (iii) in the light of this primary object. We may also state here that we are required in this case to consider the case of an assessee, who is assessed to tax under section 34(1B). We are considering only a narrow question as to whether the assessee, who is required to pay a sum of money under section 34(1B) of the Income-tax Act in instalments, can get the benefit of the main part of section 2(m), even though on the valuation date of a particular assessment year he has paid only an instalment and not the whole sum of money due under section 34(1B). We emphasize this aspect of the case. It may be that payment of tax in instalments in cases other than the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n consequence of any order passed under or in pursuance of this Act or any law relating to taxation of income or profits or the Estate Duty Act or the Expenditure-tax Act or the Gift-tax Act ". The word " payable " is descriptive of the orders passed under various specified Acts. Sub-clause (a) may be amplified to read in this manner : " The amount of the tax payable in consequence of any order passed under or in pursuance of this Act or any law relating to taxation of income or profits, or the Estate Duty Act, the Expenditure-tax Act or the Gift-tax Act which is outstanding on the valuation date and which is claimed by the assessee in appeal, revision or other proceedings as not being payable by him." There are thus three requirements: firstly, the amount of the tax should be payable under any of the Acts specified in the main part of clause (iii) ; secondly, the amount of tax should be outstanding on the valuation date ; and, thirdly, the outstanding amount of tax, partially or wholly, should be claimed by the assessee in appeal, revision or other proceeding as not being payable by him. So only the outstanding tax which is disputed in appeal, revision or other proceedings is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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