1962 (8) TMI 96 - HC - Income Tax

Summary

Issues Involved:
1. Whether the application dated 30th December, 1953, for refund was under section 48 and was competent and within time.
2. Whether the assessee was entitled to abatement under the Agreement for the Avoidance of Double Taxation (A.A.D.T.).
3. Whether the assessee had any right of appeal against the Income-tax Officer's refusal to grant abatement under the A.A.D.T.
4. Whether the appeal to the Appellate Assistant Commissioner was within time.

Issue-wise Detailed Analysis:

1. Competency and Timeliness of the Application for Refund:
The court determined that the application dated 30th December, 1953, was not an application for refund under section 48 of the Indian Income-tax Act but was an application for granting an abatement. If treated as an application for refund under section 48, it was barred by limitation under section 50 of the said Act. The court emphasized that the application did not conform to the procedural requirements for a refund and was thus not competent and within time.

2. Entitlement to Abatement under A.A.D.T.:
The court held that the assessee was not entitled to claim abatement under the A.A.D.T. at the stage in which the application was made. The assessment for the years 1945-46 and 1946-47 was completed in October 1948, and the full amount of tax was paid by January 1949. The assessee did not raise the issue of double taxation during the assessment process. The A.A.D.T. required that claims for abatement be made at the time of assessment, and there was no provision for post-assessment claims for abatement or refund. Consequently, the Income-tax Officer could not grant abatement at that stage, and there was no outstanding demand that could be adjusted under the A.A.D.T.

3. Right of Appeal Against the Income-tax Officer's Refusal:
The court concluded that no appeal lay against the order of the Income-tax Officer dated 2nd November, 1954, rejecting the claim for abatement. The A.A.D.T. did not provide for an appeal mechanism for claims of abatement post-assessment. The court noted that the proper procedure would have been to appeal against the original assessment orders, which had become final and binding.

4. Timeliness of the Appeal to the Appellate Assistant Commissioner:
Since the court found that no appeal lay against the Income-tax Officer's order rejecting the abatement claim, the question of whether the appeal to the Appellate Assistant Commissioner was within time did not arise. The court noted that any appeal against the original assessment orders would have been barred by the time the claim for abatement was made in December 1953.

Conclusion:
The court answered the questions as follows:
1. The application dated 30th December, 1953, was not an application for refund under section 48 but for abatement, and if treated as a refund application, it was barred by limitation.
2. The assessee was not entitled to claim abatement under the A.A.D.T. at the stage the application was made, and the Income-tax Officer could not grant abatement at that stage.
3. No appeal lay against the Income-tax Officer's order rejecting the abatement claim.
4. The question of the appeal's timeliness did not arise as the appeal against the original assessment orders was long barred.

The court expressed sympathy for the assessee's situation but emphasized that it could not grant relief beyond the scope of the law. There was no order as to costs.