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TMI Blog1962 (11) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... ment can only be made under section 34 of the Act. Answer given by the High Court to the second question was correct and the assessment made under section 34(1)(b) of the Act after four years from the end of the relevant assessment year was out of time. - Appeals Nos. 136 to 138 of 1962 - - - Dated:- 16-11-1962 - R. Gopalakrishnan, J. For the Appellant: Gopal Singh and R. N. Sachthey For the Respondent: R. J. Kolah and J. B. dadachanji, O. C. Mathur and Ravinder Narain of J. B. Dadachanji and Co. JUDGMENT The judgment of the court was delivered by KAPUR J. These three appeals by special leave are brought against the judgment and order of the High Court of Bombay. The appellant in all the three appeals is the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal was that the Income-tax Officer had no jurisdiction to take proceedings as the notices were served on the assessee-respondents beyond the period of our years allowed under section 34(1)(b) of the Act. This plea accepted by the Tribunal and at the instance of the Commissioner of Income-tax a case was stated on the High Court under section 66(1) of the Act and the following two questions were referred to it : "(1) Whether on the facts and circumstances of the case it was necessary for the Income-tax Officer to initiate action under section 34 of the Indian Income-tax Act in order to tax the deemed income distributed by virtue of the order under section 23A(1) of the Act made in the case of the A. C. E. C Private (India) Ltd. ? (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 34(1)(b) is made applicable to orders under section 23A then that section (section 23A) would become unworkable; (2) that as under section 23A(1) there was a period of six months up to the end of which dividends could be distributed the accounting year would, in the present case, be 1949 and the assessment year 1950-51 and, therefore, the notice could be served within four years of the end of that year, i.e., up to 31st March, 1955. Finally it was urged that proviso (1) to sub-section (3) of section 34 applied and as the notice was issued within four years under section 34(1)(b) there was a period of one year from the date of service of the notice during which the assessment or reassessment could be made and the impugned order having been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in respect thereof he shall, unless he is satisfied that having regard to losses incurred by the company in earlier years or to the smallness of the profit made, the payment of a dividend or a larger dividend than that declared would be unreasonable, make with the previous approval of the Inspecting Assistant Commissioner an order in writing that the undistributed portion of the assessable income of the company of that previous year as computed for income-tax purposes and reduced by the amount of income-tax and super-tax payable by the company in respect thereof shall be deemed to have been distributed as dividends amongst the shareholders as at the date of the general meeting aforesaid, and thereupon the proportionate share thereof of ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough in fact the shareholder does not receive it. It is deemed to have been distributed on the date on which accounts of the previous year were laid before the company at its general meeting. Thus construed the undistributed assessable income in the present case rightly determined by the Income-tax Officer because 60% was not distributed by way of dividends up to the end of the sixth month after holding of the meeting which was on December 4, 1948. Under section 23A(1) of the Act dividend distributed by June 30, 1949, should not have been less than the statutory limit but the effect of the deeming provisions is not that the income should be deemed to have been distributed on June 30, 1949, but on the date of the general meeting, i.e., Decem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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