1958 (9) TMI 109 - HC - Income Tax

Summary

Issues Involved: Limitation for relief application, applicability of double taxation relief provisions, statutory basis for relief, and applicability of Section 50 of the Income Tax Act.

Detailed Analysis:

1. Limitation for Relief Application:
The petitioner applied for relief from double taxation to the Indian authorities after the termination of assessment proceedings in both India and Burma. The application was rejected on the ground that it was beyond the four-year period prescribed by Section 50 of the Income Tax Act. The Assistant Commissioner upheld this view, and the Central Board of Revenue declined to interfere.

2. Applicability of Double Taxation Relief Provisions:
The court examined the statutory basis for the assessee's claim for relief from double taxation for the assessment year 1947-48. The relevant law to be applied was the law in force during the assessment year. The court referred to the India and Burma Income Tax Relief Order of 1936 (1936 Order), which governed relief from double taxation between India and Burma. This order ceased to have statutory force after India attained independence on 15th August 1947, and Burma on 4th January 1948. The amended Section 49A of the Income Tax Act, which included Burma, came into effect on 30th March 1948, but no notification was issued by the Government of India under this section.

3. Statutory Basis for Relief:
The court noted that the only statutory provision the petitioner could invoke was Section 49D, which remained unaltered throughout the year 1947-48. However, it was not clear whether the laws of Burma in 1947-48 provided for any relief in respect of Income Tax charged in India. The departmental authorities did not investigate this aspect, as they focused solely on the limitation issue. The court emphasized that the nature of the claim and the statutory basis for that claim must be ascertained before considering the limitation.

4. Applicability of Section 50 of the Income Tax Act:
The court held that Section 50 of the Income Tax Act did not apply to claims for relief under the 1936 Order. The 1936 Order was independent of the Income Tax Act, and its statutory basis was Section 159 of the Government of India Act, 1935. Neither the 1936 Order nor the corresponding rules prescribed any period of limitation for applications for relief. The court concluded that the orders of the departmental authorities were liable to be set aside as they did not consider the relevant factors for the petitioner's claim.

Conclusion:
The court set aside the orders of the Income Tax Officer and the Assistant Commissioner and directed the first respondent to dispose of the petitioner's application according to law. The court highlighted the absence of any provision in the 1936 Order prescribing a period of limitation and indicated that the petitioner was entitled to have his claim considered on its merits. The rule nisi was made absolute, and the petitioner was awarded costs.