TMI Blog1967 (6) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Tribunal was justified in holding that the order under section 23A(1) of the Indian Income-tax Act, 1922, was rightly made on the assessee-company, which was a resident private limited company during the relevant previous year but had been converted into a non-resident public limited company before the date of the annual general meeting at which the accounts of the previous years were adopted ? " The question arises in the following circumstances: The assessee, M. M. Ispahani Limited, was incorporated as a private company on Decemher 19, 1934. It used to have its registered office at No. 51, Ezra Street, in the town of Calcutta. A few months prior to the partition of British India and the setting up of the two Dominions of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ign companies much less to public foreign companies." With the other objections made by the assessee we need not concern ourselves in this reference. The Income-tax Officer did not pay any heed to the objections. The appeal preferred by the assessee against the order of the Income-tax Officer, before the Appellate Assistant Commissioner, failed to this extent that the objections made by the assessee, as quoted above, were negatived, but there was relief given to the assessee to the extent that the Appellate Assistant Commissioner directed the Income-tax Officer to charge to tax only that portion of the dividend which was proportionate to the profits taxed in India. The assessee preferred a second appeal before the Appellate Tribunal, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the Tribunal was that the provisions of section 23A were not applicable to the assessee because on the date of the annual general meeting the status of the assessee had changed from a private limited company to a public limited company and no other point appears to have been urged before the Tribunal. Mr. Sen, however, argued that, in the statement of case, the objection on the ground that the assessee was a foreign company was equally emphasised upon and the question referred to this court included that aspect of the objection as well. In our opinion, the statement of case does not correctly summarise the order of the Appellate Tribunal and proceeds on the imagination that the non-liability of the assessee under section 23A becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the smallness of the profit made, the payment of a dividend or a larger dividend than that declared would be unreasonable, make with the previous approval of the Inspecting Assistant Commissioner an order in writing that the undistributed portion of the assessable income of the company of that previous year as computed for income-tax purposes and reduced by the amount of income-tax and super-tax payable by the company in respect thereof shall be deemed to have been distributed as dividends amongst the shareholders as at the date of the general meeting aforesaid, and thereupon the proportionate share thereof of each shareholder shall be included in the total income of such shareholder for the purpose of assessing his total income : .... P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer observed in his order under section 23A as follows : " Further the assessee became a Pakistan company only after July, 1947, and therefore it was assessed as an Indian company for the assessment year 1948-49." Apparently the Income-tax Officer had in his contemplation the provisions of section 2(6)(ii) of the Income-tax Act as it stood at the material time, in applying to the assessee the provisions of section 23A. It is not disputed that the assessee started as an Indian company and was assessable for the year ending on Match 31, 1948, as an Indian company. That being so, nothing prevented the Income-tax Officer from applying the provisions of section 23A upon the assessee, even after the assessee departed from India and set up i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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