TMI Blog1954 (12) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the company's income was not however accepted by the Income-tax Officer, and as the company did not produce its account books when required to do so that Officer acted under section 23(4) of the Act and determined the sum payable by the assessee to be ₹ 8,17,137. This assessment order was made on the 29th June, 1942. Thereafter, on the 16th September, 1944, the Income-tax Officer's successorin-office, being of opinion that the assessee had in respect of the year in question distributed less than sixty per cent. of its assessable income, made with the previous approval of the Inspecting Assistant Commissioner an order under section 23A. Proceedings were subsequently instituted against the managing director of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the provisions of section 64(4) which provides that Notwithstanding anything contained in this section every Income- tax Officer shall have all the powers conferred by or under this Act on an Income-tax Officer in respect of any income, profits or gains accruing, or arising or received within the area for which he is appointed. Learned counsel now state that the first and second questions may be deemed to involve only one matter, namely whether an order under section 23A can be passed after an assessment order had been made under section 23(4). The assessment order in the present case was made on the 29th June, 1942, and the argument for the assessee is that no order under section 23A could be passed after that date. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty per cent. of the assessable income of the company. In our opinion the section makes it quite clear that an order under it may be made on the basis of a failure by the assessee to distribute a dividend of the minimum amount in a year which has already passed, and we can find nothing elsewhere in the Act which places the restriction on the power of the Income-tax Officer for which the assessee contends. An order cannot be made under this section before the end of a period of six months from the date upon which the accounts for the year in question are laid before the assessee company in general meeting and after the Income-tax Officer has taken into account the amount of profit made, has considered whether the payment of a larger dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount of income-tax and super-tax payable by the company in respect thereof and the argument on behalf of the assessee is that whereas the phrase assessable income , where it first appears, means the income of the company as disclosed in its balance sheet and accounts, it means, when used on the second occasion, the company's assessed income. We do not think this argument can be sustained. Assessable income in our opinion means income assessable to income- tax under the Indian Income-tax Act and has the same meaning wherever it is used in this sub-section. The distinction sought to be made by the assessee is based on the phrase as computed for income-tax purposes which follows the expression assessable income where it is u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this interpretation as it is abundantly clear that a dividend has to be declared out of the actual profits and not out of what may be the notional income for the purposes of assessment. Sri G. S. Pathak who appeared for the assessee invited our attention to the cases of Sir Kasturchand v. Commissioner of Income- tax, Bombay City [1949] 17 I.T.R. 493, to which we have already referred, and Ezra Proprietary Estates Ltd. v. Commissioner of Income-tax, West Bengal [1950] 8 I.T.R. 762. Both these cases were concerned with the circumstances which are to be taken into account by the Income-tax Officer in deciding whether an order should be made under section 23A, and the observations made by the learned Judges, so far as they are relevant at all, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50,000 to compound the offence and the Inspecting Assistant Commissioner under section 53(2) of the Act agreed to the offence being compounded on payment of this amount. We are clearly of opinion that this payment cannot be said to have been made wholly and exclusively for the purpose of the business. In In re Gabdulal Tulsiram where the assessee had compounded a criminal offence on payment of ₹ 11,265 it was held that this was not money wholly and exclusively expended for the purposes of the business and it was not therefore a permissible deduction, and in Commissioner of Income-tax, West Bengal v. H. Hirjee the Supreme Court held that money spent in defending criminal proceedings was similarly not an expenditure laid out or expended ..... X X X X Extracts X X X X X X X X Extracts X X X X
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