9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1965 (12) TMI 26 - SC - Income TaxWhether the assessee was entitled to have an adjustment of the advance tax paid by it under section 18A of the Indian Income-tax Act in Lahore for the assessment year 1947-48, against the demand of tax raised by the Income-tax Officer, 3rd Additional Business Circle, New Delhi, for the assessment year 1947-48 ? Held that - In our opinion the effect of section 18(3) of the Indian Independence Act was to change the incidents of the advance tax paid. Previously the advance tax was to be adjusted towards a single regular assessment to be made by British India. After the Indian Independence Act the advance tax was liable to be adjusted against two regular assessments, one by India and one by Pakistan. In Pakistan, under section 18A(11), the Pakistan Government was entitled to adjust the advance tax paid by the assessee against its demand. Similarly, the Government of India was entitled to adjust the amount against its demand. It follows that if the assessee has been given credit for the advance tax by the Pakistan Government, he cannot claim that credit should be given to him by the Indian income-tax authorities. The effect of the Indian Independence Act was not to double the advance money the assessee had paid. The amount of money he paid as advance tax remained the same. Having been given credit by the Pakistan Government he could not claim that there was any amount left on which section 18A(11) could operate. The answer to the questions should be in the negative and against the assessee. Appeal allowed.
Issues:
1. Entitlement to adjustment of advance tax paid in Lahore against tax demand in New Delhi. 2. Validity of the order directing a refund to the assessee out of the advance tax paid in Lahore. Analysis: The case involved an appeal against the High Court of Punjab's judgment regarding the adjustment of advance tax paid by the assessee in Lahore against the tax demand raised in New Delhi. The primary issue was whether the assessee was entitled to such an adjustment. The facts revealed that the assessee, a public limited company, had paid advance tax under section 18A of the Indian Income-tax Act to the Income-tax Officer in Lahore. The Income-tax Officer in New Delhi determined the total income of the assessee and issued a demand notice. The Appellate Assistant Commissioner disallowed the claim for adjustment, stating that the amount paid in Lahore had already been adjusted by the Pakistan authorities against the tax due. However, the Appellate Tribunal allowed the claim, emphasizing the mandatory nature of section 18A(11) and the obligation of income-tax authorities to give credit for advance tax paid during regular assessment under the Indian Income-tax Act. The Commissioner of Income-tax challenged the Tribunal's decision, leading to a reference to the High Court. The High Court held that the direction in section 18A(11) must be followed, and credit should be given to the assessee during the regular assessment. It dismissed the argument that the adjustment made by Pakistan authorities precluded further credit in India, stating that actions by Pakistan authorities did not affect the assessee's rights under the Indian Income-tax Act. The High Court answered both questions in the affirmative, supporting the assessee's entitlement to the adjustment. The Supreme Court analyzed the impact of section 18(3) of the Indian Independence Act on the advance tax paid by the assessee. It concluded that the advance tax could be adjusted against assessments in both India and Pakistan post-independence. Since the assessee had already received credit for the tax paid by Pakistan authorities, the Indian income-tax authorities were not obligated to provide further credit. The Court distinguished this case from Dwarka Dass v. Income-tax Officer, Kanpur, highlighting that in this instance, regular assessments had been made in Pakistan and the advance tax had been adjusted accordingly. Consequently, the Court held that the assessee was not entitled to additional credit under section 18A(11) in India. In light of the above analysis, the Supreme Court ruled in favor of the appellant, setting aside the High Court's judgment and accepting the appeal with costs in both instances. The decision clarified the application of advance tax adjustments post-independence and the limitations on seeking credit in multiple jurisdictions.
|
