TMI Blog1971 (4) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture and sale of cement and refractories, etc. it manufactures and produces articles which are mentioned in the First Schedule to the Industries (Development Regulation) Act, 1951. The respondents to the petition are the Central Board of Direct Taxes (respondent No. 1); the Commissioner of Income-tax (respondent No. 2); the Inspecting Assistant Commissioner of Income-tax, Central Range -II (respondent No. 3), and the Income-tax Officer, Central Circle VII (respondent No. 4). For the assessment year 1965-66 ending December 31,1964, the total income returned by the petitioner under section 139 of, the Act was Rs. 35,73,589. This return was filed on June.29,1965, and according to the petitioner's self-assessment as required by section 140A of the Act, the tax payable on the basis of the return came to Rs. 17,44,887. Assessment for this year was completed on March 30,1970. The tax first assessed was Rs. 17,99,321, but it was reduced on rectification to Rs. 17,90,080. On August 14, 1967, the petitioner had filed its return of income for the assessment year 1967-68 showing a total income of Rs. 1,20,94,450 on which the total tax payable upon a self-assessment came to Rs. 62,80, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the assessment year 1967-68. The petitioner also wrote to the same effect to the concerned Commissioner of Income-tax on March 24, 1969, and requested him to intervene in the matter and direct the Income-tax Officer to drop the proceedings. By letter dated April 7, 1969, purporting to have been issued on behalf of the concerned Commissioner of Income-tax, the petitioner was asked to contact the concerned Income-tax Officer " to whom necessary instructions have been issued " but the instructions issued were not specified in this letter. Thereafter, there was further correspondence between the petitioner and the respondents and in the meantime there was provisional assessment of the petitioner on May 27, 1969, with respect to the assessment year 1967-68 under section 141 of the Act as a result of which the tax payable for this assessment year was provisionally assessed at Rs. 5,89,902 and a demand for payment of this amount was made. The petitioner protested that this demand had been made without taking into consideration the amount of the tax credit certificate to which the petitioner was entitled under section 280ZB of the Act (which stood reduced to Rs. 6,02,112 as a result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion regarding the maintainability of the petition on the ground that the petitioner had an alternative remedy by way of revision under section 264(1) of the Act which was an equally efficacious remedy and, therefore, the extraordinary jurisdiction of this court under articles 226 and 227 of the Constitution could not be invoked. Mr. S. T. Desai, learned counsel for the respondents, did not press this preliminary objection at the time of the hearing of the petition. On the merits it was averred that the delay in the regular assessment of the petitioner for the assessment year 1965-66 on March 30, 1970, was due to the conduct of the petitioner itself in revising its return for this year by letters dated November 4, 1965 ; June 22, 1966; June 23, 1966; July 14, 1966 ; September 26, 1966; October 13, 1966; November 26, 1966; March 3, 1967; July 13, 1967; July 21, 1967; December 18, 1968 and July 31, 1969; that the petitioner did not become entitled to the grant of a tax credit certificate for Rs. 6,28,795 under sub-section (1) of section 280ZB immediately upon filing of the return for the assessment year 1967-68 ; that under the Tax Credit Certificate (Corporation Tax) Scheme, 1966, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of section 280ZB and the validity of paragraph 3(1)(a) of the scheme. It will now be proper to set out section 280ZB of the Act which is in these terms: " (1) Where any company engaged in the manufacture or production of any of the articles mentioned in the First Schedule to the Industries (Development and Regulation) Act, 1951 (LXV of 1951), is, in respect of its profits and gains attributable to such manufacture or prediction, (i) liable to pay any tax for the assessment year commencing on the 1st day of April, 1965 (hereinafter referred to as the base year), and for any one or more of the five assessment years next following that year; or (ii) not liable to pay any tax for the base year but becomes so liable for any succeeding year (hereinafter referred to as the succeeding base year) and also for any one or more of the assessment years following that year, not being an assessment year commencing on the Is% day of April, 1971, or any subsequent assessment year, and the tax for any such succeeding year exceeds-- (a) in the case referred to in clause (i), the tax payable for the base year ; (b) in the case referred to in clause (ii), the tax payable for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of this Act or the annual Finance Act and after deducting from such amount of income-tax- (a) the amount of additional income. tax, if any, payable by the company under provisions of section 104; and (b) (i) in respect of the assessment year commencing on the 1st day of April, 1965, the amount, if any, by which the rebate of income-tax admissible to the company under the provisions of the Finance Act, 1965, (X of 1965), is, under the provisions of the said Act, reduced with reference to the face value of any bonus shares or the amount of any bonus issued by the company to its shareholders during the previous year or any previous year prior to that year or with reference to any amount of dividends declared or distributed by it during the previous year or any previous year prior to that year; or (ii) in respect of the assessment year commencing on the 1st day of April, 1966, or any subsequent assessment year, the amount of income-tax, if any, payable by the company under the provisions of the annual Finance Act with reference to the relevant amount of distributions of dividends by it. Explanation 3.- The amount of surtax in respect of the chargeable profits attributable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one or more of that five assessment years next following that year the tax for any such succeeding year exceeds the tax payable for the year commencing on the 1st day of April, 1965. The year commencing on the 1st day of April, 1965, is called the " base year", or (ii) that if in respect of its profits and gains as aforesaid such company is not liable to pay any tax for the base year but becomes so liable for any succeeding year (referred to as the succeeding base year) and also for any one or more of the assessment years following the succeeding base year not being an assessment year commencing on the 1st day of April, 1971, or any subsequent assessment year the tax for any such succeeding year exceeds the tax payable for the succeeding base year. If any of these qualifications are satisfied, such company is to be granted a tax credit certificate for an amount equal to 20 per cent. of such excess but such amount shall not for any assessment year exceed 10 per cent. of such tax payable by the company for that rear. The contention of the petitioner is that the expression " tax payable " does not mean tax payable upon regular assessment by the Income-tax Officer but the tax pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icates the method and manner for the utilization of the tax credit certificate. It provides that after a grant has been made under sub-section (1), the tax credit certificate has to be produced before the Income-tax Officer and thereupon the amount shown therein shall be adjusted against any liability of the company under the Act or the Indian Income-tax Act, 1922, existing on the date on which the certificate was produced and in cases where there is no such liability or the amount of the tax credit certificate exceeds the existing liability, the excess or the whole of such amount shall be refunded to such company notwithstanding anything contained in Chapter XIX of the Act. Sub-section (2) of this section, therefore, indicates the manner in which the adjustment or refund can be claimed which is on production of the tax credit certificate after it has been granted. If a statute provides the manner in which a certain thing has to be done then such thing must be done in that manner and no other. Therefore, it is not open to such company to make an adjustment of any existing tax liability itself or claim a refund even before the grant and production of the tax credit certificate. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self-assessment and provisional and these assessments have to be on the basis of the return filed by such company. It, therefore, follows that the word " computation " cannot mean only computation by the Income-tax Officer at the time of regular assessment and it may well include computation by such company also, particularly at the time of self-assessment. The petitioner contends that the expression " tax payable " is used in various other provisions of the Act and a perusal of those provisions would indicate that " tax payable " cannot mean only tax payable upon regular by the Income-tax offcer. According to the petitioner, the expression " tax payable " means merely " tax liable to be paid." The first section to which attention is invited is section 140A relating to self-assessment. This section provides that where a return has been furnished under section 139 and the tax payable on the basis of that return as reduced by any tax already paid under any provision of the Act exceeds five hundred rupees, the assessee shall pay the tax so payable within thirty days of furnishing the return. In fact, the language of section 140A indicates that the meaning sought to be put on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an only lead to the interpretation that the provisions contained in it would become applicable whenever a person has been assessed whatever be the nature of the assessment--whether it be a regular assessment or a provisional assessment. This observation was made to repel the argument that the word " assessed " used in this section was not meant to cover a provisional assessment under section 23B of the Act. As we have stated, the expression " tax payable " in section 280ZB means the tax payable upon regular assessment, by the Income-tax Officer. The next contention was that if such company has to wait for the Income-tax Officer to make an assessment of the base year, the amount of adjustment or refund upon the grant of the tax credit certificate cannot be used for repayment of a loan or redemption of its debentures or acquisition of any capital asset as provided within the period specified in the scheme and the object of the section will be frustrated. In our opinion, it would not be so. The provisions of this section are not to enable such company to repay the loan or redeem its debentures or acquire any capital asset. The object of the section is that if any of these things has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any scheme made under this section shall be laid, as soon as may be, after it is made before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following both Houses agree in making any modification in any provision of the scheme or both Houses agree that any provision in the scheme should not be made, that provision of the scheme shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice the validity of anything previously done under that provision." The contention is that, inasmuch as the scheme made under Chapter XXII-B is to be placed before both Houses of Parliament, it as the same status as the section itself and, even though it is subordinate legislation, it should be taken as if the provisions of the scheme are a part of Chapter XXII-B. Reliance is placed upon Institut of Patent Agents v. Josepeh Lockwood. In our opinion, no assistance can be derived from this case bec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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