TMI Blog1948 (3) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain attributes of sovereignty and as a sovereign he is not subject to the Municipal Laws of India. Therefore, the Indian Income Tax Act does not apply to him. He is not liable to pay tax on his income and he cannot be treated as an assessee for any purposes under the Income Tax Act. Sir Jamshedjis contention is that the Ruler of the Baroda State has been subjected to taxation contrary to International Law. He says that when the companies paid tax on their profits prior to the distribution of dividends they paid tax on behalf of the different shareholders including the Ruler of the State and by taxing the companies the shareholders including the Ruler himself have been taxed and therefore Sir Jamshedji says that he is entitled to ask for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... says that the Ruler of the Baroda State is an individual and as an individual he is entitled to claim a refund because he is not properly chargeable to any tax at all and therefore the whole of the tax paid by the company on his dividends should be refunded to him. Now the very scheme of Section 48 makes it clear that only those individuals can apply for a refund who are liable to be assessed to tax under Section 3 of the Income Tax Act. It is only an individual who can be made liable as an assessee who can apply for refund. The very foundation of Sir Jamshedjis application is that his client being a Ruler and being a sovereign cannot be an assessee under the Act. In my opinion the argument advanced by Sir Jamshedji is self-destructive. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt paid by the company. But it is difficult to see how he can possible support the position taken up by him that although he is not an assessee and cannot be assessed still be would be entitled to a refund under Section 48 of the Act. We took the same view of the law in the case which is reported in MANU/MH/0127/1947 : [1947]15ITR367(Bom) (Commissioner of Income Tax, Bombay v. A. H. Wadia). There we had the Gwalior State before us and one of the main questions raised in that case was whether the Gwalior State was entitled to a refund in respect of the shares it held in certain companies in India. It is true that one distinguishing feature in that case was that the Gwalior Durbar did business and came within the provisions of the Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintainable. Now an application for refund can be made under the Income Tax Act only under Section 48 thereof. Sub-section (1) of that section is in these terms:- If any individual, Hindu undivided family, company, local authority, firm or other association of persons, or any partner of a firm or member of an association individually satisfies the Income Tax Officer or other authority appointed by the Central Government in this behalf that the amount of tax paid by him or on his behalf or treated as paid on his behalf for any year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of any such excess. It is an essential pre-requisite to the application of this se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegories of entities which are enumerated at the beginning of that section, viz., any individual, Hindu undivided family, company, local authority, firm on other association of persons, or any partner of a firm or a member of an association. A reference to Section 3 of the Act which deals with the change of Income Tax will show that these are the exact entities which are assessable to tax. Moreover, Section 48 (1) later on states that what shall be refunded to such an entity is the difference between the amount paid and the amount with which he is properly chargeable under the Act for that year, which clearly indicates, to my mind, that the entity which can apply for a refund under Section 48 is an entity which is assessable able to tax und ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
