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Interpretation of whether the Punjab State Electricity Board qualifies as a licensee under the Electricity (Supply) Act, 1948 for the purpose of claiming development rebate under the Indian Income-tax Act, 1922. Detailed Analysis: The judgment addressed Income-tax References regarding the entitlement of the Punjab State Electricity Board to claim development rebate under the Indian Income-tax Act, 1922. The central issue revolved around whether the Board could be considered a licensee within the meaning of the Electricity (Supply) Act, 1948, to avail of the development rebate without creating the reserve as per the provisions of the Income-tax Act. The Board, formed under the Electricity (Supply) Act, 1948, had filed returns claiming development rebate, which was initially denied by the Income Tax Officer (ITO) due to incomplete information on new machinery. The Assistant Commissioner (AAC) remanded the case for further information and reasons for disallowance. Subsequently, the ITO reiterated that the Board did not qualify as a licensee and thus was not entitled to the rebate. However, the AAC reversed this decision, stating that the Board was indeed a licensee, leading to an appeal by the revenue to the Income-tax Appellate Tribunal. The Tribunal upheld the AAC's decision, prompting the Commissioner to seek a reference to the High Court for the question of law. The crux of the matter was whether the Board met the definition of a licensee under the Electricity (Supply) Act, 1948, to claim the development rebate without creating a reserve. The Commissioner argued that the Board did not fall under the Act's definition of a licensee. To resolve this, the court analyzed the relevant sections of the Indian Income-tax Act, 1922, and the Electricity (Supply) Act, 1948, particularly focusing on the definition of "licensee" under the latter Act. The court emphasized that the wording of the proviso in the Income-tax Act did not mandate strict adherence to the Act's definition of licensee but required fulfilling the licensee criteria as per any section of the Electricity (Supply) Act, 1948. Section 26 of the Act granted the Board all powers and obligations of a licensee, indicating its status as a licensee within the Act's purview. The court also highlighted that the Act's definition of licensee excluded the Board, suggesting that the Board would have been considered a licensee if not for this exclusion. This interpretation aligned with the legislative intent to not restrict definitions in a rigid manner but adapt them as per the context. Ultimately, the court concluded that the Punjab State Electricity Board qualified as a licensee under the Electricity (Supply) Act, 1948, making it eligible for the development rebate under the Indian Income-tax Act, 1922. The judgment affirmed that the Board met the criteria for a licensee within the Act, allowing it to claim the rebate without the need for a reserve, as specified in the proviso of the Income-tax Act. Both judges, R. N. MITTAL and B. S. DHILLON, concurred with this decision, ruling in favor of the assessee.
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