TMI Blog1984 (4) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... 943, to February 6, 1944, disclosing an income of Rs. 65,012. For the corresponding chargeable accounting period, it filed a return under the Excess Profits Tax Act, 1940. On September 15, 1945, the income-tax assessment was made computing a total income of Rs. 68,848. On the same day, the excess profits tax assessment was completed determining the chargeable profits at Rs. 1,85,581, which figure was arrived at by adding to the income as computed in the income-tax assessment two sums requiring to be included in the chargeable profits as a result of the order passed under s. 10A of the Excess, Profits Tax Act. No appeal was filed by the assessee against the income-tax assessment order or against the excess profits tax assessment order. However, on August 18, 1948, nearly three years after the said assessments, he filed a petition to the ITO claiming relief under, s. 25(3) of the Indian I.T. Act, 1922, on the ground that the business of manufacture and sale of salt carried on by the assessee-firm was only a continuation of its grocery business on which tax has been charged under the 1918 Act. The ITO rejected the said claim on the ground that the business of manufacture .I.T. Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a relief under the Excess Profits. Tax Act on the basis of an exemption granted under s. 25(3) by the AAC and therefore, the AAC was justified in entertaining the appeal and that the decision of the AAC that as the entire profits of the chargeable accounting period are exempt from income-tax by virtue of s. 25(3), the Excess Profits Tax Act can have no application. Aggrieved by the said decision of the Tribunal, the Revenue has come before us in this reference. On the question of delay in filing the appeal before the AAC under the Excess Profits Tax Act, it is contended on behalf of the Revenue that the time-limit for filing an appeal under s. 17 of the Excess Profits Tax Act against the order of assessment had long before expired, that the appeal has been entertained after a considerable number of years and that such delay cannot legally be condoned. The learned counsel for the Revenue also questions the correctness of the view expressed by the Tribunal that in this case no question of limitation could arise, for the relief to which the assessee will be entitled under the Excess Profits Tax Act follows the relief the assessee got under the I.T. Act. The learned counsel for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the guise of an appeal against a letter sent by the ITO to the assessee. The AAC acts as a creature of the statute and he cannot exercise the appellate powers outside the statutory provisions in s. 17 which generally enables the AAC to entertain an appeal against an order of assessment under the Excess Profits Tax Act within 45 days of the receipt of the notice of demand relating to the assessment. It also provides for an appeal against any order of refusal by the Excess Profits Tax Officer to grant relief under that Act. Thus, s. 17 not only provides for an appeal against the original order of assessment but also against any refusal by the ITO to grant relief. In this case, the assessee sought relief under the Act by filing a petition before the Excess Profits Tax Officer on October 25, 1963. After the rejection of the said application by the Excess Profits Tax Officer refusing to give relief consequent on the income-tax assessment being set aside, the assessee could have filed an appeal before the AAC in time, that is, within 45 days from the said rejection. But in this case the assessee appears to have approached the Commissioner of Income-tax and also the Secretary, Ministr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority. Thus, though we are not inclined to agree with the Tribunal that there is no question of limitation in such cases, we are inclined to hold that the AAC is right in condoning the delay and entertaining the appeal in the circumstances of the case. Therefore, question No. 1 is answered in the affirmative and against the Revenue. Coming to the second question, however, we find that the Tribunal has not come to the right conclusion. It has proceeded on the basis that as the assessee had got exemption under s. 25(3) of the Indian I.T. Act, 1922, there cannot be any assessment under the Excess Profits Tax Act and, therefore, the excess profits tax assessment should be cancelled. Thus, the view taken by the Tribunal is that the excess profits tax assessment is conditional on the tax being leviable under the I.T. Act. It cannot be disputed that the I.T. Act and the Excess Profits Tax Act are two independent statutes, and the operation of one does not depend on the other. The charging section and the procedure laid down for enforcing the charge in both the statutes will have independent operation. Any impact of one statute on the other will have to depend on the express provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at is sufficient to attract the provisions of the Excess Profits Tax Act whether the charge under the I.T. Act has or has not resulted in any actual amount of liability to income-tax. Thus, the mere fact that a particular income was not actually taxed under the I.T. Act in view of certain exemptions or deductions provided under the said Act, it cannot be said that the said income should automatically be excluded from consideration while computing the chargeable profits under the Excess Profits Tax Act. It is no doubt true that in this case the assessee was held entitled to the relief under s. 25(3) but that relief was given to avoid the same income being taxed twice, once under the 1918 Act and again under the 1922 Act. The fact that relief has been given in respect of an income under s. 25(3) will not lead to the inference that the business of the assessee is not chargeable to excess profits tax. The relief under s. 25(3) is granted to the assessee only on the basis that the income having been assessed under the 1918 Act, it cannot again be assessed under the 1922 Act. The grant of relief, therefore, proceeds on the basis that the income is chargeable under the I.T. Act but it can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment under the Super Profits Tax Act, in cases where a recomputation is necessary either as a result of a mistake in the assessment under the I.T. Act or for any other justifiable reason, the ITO who makes the assessment under the Super Profits Tax Act can recompute the total income under the I.T. Act notwithstanding that the total income of the assessee has been earlier computed and assessed under the I.T. Act. Therefore, the fact that in the computation of income under the I.T. Act, the assessee has got relief under s. 25(3) does not mean that he is entitled to the same relief under the Excess Profits Tax Act. Unless a similar relief as the one under s. 25(3) has been provided for in the Excess Profits Tax Act, the Excess Profits Tax Officer need not take note of the relief granted for income-tax purposes for computation of chargeable profits under the Excess Profits Tax Act. We, therefore, hold that the Tribunal was in error in holding that the relief obtained by the assessee under s. 25(3) of the I.T. Act in the income-tax proceedings will automatically enable him to claim non-liability to tax under the Excess Profits Tax Act. In this view, question No. 2 is answered in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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