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TMI Blog1956 (2) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... 940-41; (2) ₹ 7,800 arrears due for 1941-42; and (3) ₹ 7,256-12-0 part of the arrears due for 1947-48. The assessee pointed out that the first two items represented the proportionate tax on foreign income, the income from Kanthoe, for the relevant account periods corresponding to the assessment year 1940-41 and 1941-42, and that as the currency restrictions on remittances from Kanthoe continued, he was entitled to the relief under the proviso to section 45 of the Act. On November 12, 1953, the Income-tax Officer finally informed the assessee that the refundable amount would be adjusted towards the arrears of tax. The Inspecting Assistant Commissioner, in effect, confirmed that order on December 7, 1953. The assessee applied u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of section 49E of the Act. Section 45 of the Act specifies the day before which any amount payable under a notice of demand issued under section 29 of the Act should be paid. It further directs that any assessee failing to pay shall be deemed to be in default. We are not now concerned with the first proviso to the section, which provides for the period during which an appeal preferred against the order of assessment in pending. The second proviso runs : Provided further that where an assessee has been assessed in respect of income arising outside the taxable territories in a country the laws of which prohibit or restrict the remittance of money to the taxable territories the Income-tax Officer shall not treat the assessee ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay that amount within the meaning of section 49E, though he cannot be treated as an assessee in default in respect of that sum under section 45 of the Act. In our opinion the tax becomes payable on the service of the notice for which section 29 of the Act provides, on or before the expiry of the date fixed in accordance with the first part of section 45. During that period even though the tax has been payable all along, the assessee cannot be deemed to be in default within the meaning of section 45. On the expiry of that period, if the tax still remains unpaid, and if neither of the provisos is applicable, the assessee shall be deemed to be in default. Some of the consequences of that default have been provided for by section 46 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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