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TMI Blog1964 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ... 5,49,000 6 per cent. of the ordinary share capital) ... 1,83,000 --------------------- ... 3,66,000 4 per cent. of the ordinary share capital ... 1,22,000 @ 2 As. 15,250 -------------- 2,44,000 @ 3 As. 45,750 -------------- Total ... 61,000 -------------- The Income-tax Officer based his calculation on the paid-up share capital of Rs. 30,50,000. According to the Finance Act, 1956, the expression " paid-up capital " means the paid-up capital of the company as on the 1st day of the previous year relevant to the assessment for the year ending on the 31st of March, 1957, increased by the premium received in cash by the company on the issue of its shares standing to the credit of the share premium account as on the 1st day of the previous year aforesaid. The assessee's accounts as on the 31st December, 1954, being equivalent to the balance-sheet as on the 1st January, 1955, disclosed no separate amount standing under the name of share premium account. The receipts on account of share premium said to be for Rs. 45,50,000 were transferred to the " reserve fund and other reserve accounts " disclosing an aggregate figure of Rs. 1,08,00,000. The Income-tax Officer did not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Schedule to the Finance Act, 1956, and section 78(3) of the Companies Act, 1956, the Appellate Assistant Commissioner held that the sum of Rs. 45,50,000 forms an identifiable part of the bank's reserves and that the amount should be added to the paid-up share Capital for the purpose of calculation of rebate of super-tax. The Appellate Tribunal affirmed the order of the Appellate Assistant Commissioner and, on an application under section 66(1), the following question was referred to this court : " Whether, on the facts and in the circumstances of the case, the amount of Rs. 45,50,000 should be added to the paid-up capital of the assessee as on the 1st of January, 1955, for the purpose of allowing rebate to the assessee under Paragraph ' D ' of Part 11 of the First Schedule to the Indian Finance Act, 1956." This court by its judgment delivered on the 17th December, 1963 has supported the view of the Appellate Tribunal for reasons stated therein and has answered the question in the affirmative. Broadly speaking, this court has held that section 78 of the Companies Act, 1956, also applies to banking companies and by the deeming provisions of section 78(3) the disputed urge which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember, 1963. In the premises, there is no scope for an application for leave to appeal to the Supreme Court under section 66A(2) of the repealed Act. Learned counsel then proceeded to make his submissions on section 298(1) of the 1961 Act. This sub-section provides that if any difficulty arises in giving effect to the provisions of the 1961 Act, the Central Government may, by general or special order, do anything not inconsistent with such provisions which appears to it to be necessary or expedient for the purpose of removing the difficulties. According to Mr. Meyer, section 297(2)(c) did not provide for leave to appeal to the Supreme Court. By an order made by the Central Government therefore this difficulty cannot be removed. Such an order, if made, would be inconsistent with the provisions of the 1961 Act. The Income-tax (Removal of Difficulties) Order, 1962, has been made. Clause 4(1) of this order prescribes that proceedings by way of the first or subsequent appeals, reference or revision in respect of any order made under the Indian Income-tax Act, 1922, shall be instituted and disposed of as if the repealing Act has not been passed. Mr. Meyer points out that this Removal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust in my opinion be given its full effect. A subsequent appeal and the steps that are to be taken to file that appeal should be treated as continuation of the old proceedings from which the appeal arises. Let me first refer to the judgment of the House of Lords in East End Dwellings Co. Ltd. v. Finsbury Borough Council. In this case, before 1944,the claimants owned certain property consisting of 55 flats which were subject to the Rent Restrictions Acts. On June 24, 1944, the flats were completely demolished by enemy action, and a cost of works payment in respect of the damage was determined to be appropriate. The vacant site was compulsorily acquired by the local authority and, since none of the damage had been made good at the date of the notice to treat, which was served on July 28, 1948, the question arose of the amount of compensation payable to the claimants, having regard to the Town and Country Planning Act, 1947, section 53(1)(a) whereof provided that in such a case the value of the interest for the purposes of assessment of compensation should be taken to be the value which it would have if the whole of the damage had been made good before the date of the notice to treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore quoting Lord Asquith, Venkatarama Ayyar J. says " It is a rule of interpretation well settled that in construing the scope of a legal fiction it would be proper and even necessary to assume all those facts on which alone the fiction can operate. " In the instant case, having regard to the provision of section 297(2)(c) of the 1961 Act, the judgment of this court on the pending reference must be taken to have been delivered under the old Act. The inevitable corollary is that the old Act must be deemed to be operative in respect of proceedings subsequently taken with reference to the judgment. Looking at the problem from another point of view, the word continued " in section 297(2)(c), having regard to the purpose for which these provisions have been enacted, appears to be helpful. An appeal to the Supreme Court is a continuation of the reference which was pending at the commencement of the 1961 Act. An application for leave to appeal is a step preliminary or incidental to the appeal and must necessarily be governed by the old Act. Assuming, however, that learned counsel for the assessee is right in contending that section 297(2)(c) of the 1961 Act does not provide for appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his court delivers judgment on a reference, there is no order which is passed and, therefore, clause 4 of the Removal of Difficulties Order cannot be attracted. I intend only to quote the observations of a Division Bench of this court in Income-tax Reference No. 57 of 1953 (Howrah Trading Co. Ltd. v. Commissioner of Income-tax). In the judgment delivered on April 28, 1955, Chakravartti C.J. (sitting with Lahiri J., as his Lordship then was) has said : " It would seem that an appellant to the Supreme Court against the judgment delivered on a reference under section 66(1) of the Income-tax Act is entitled to both the time requisite for obtaining a copy of the judgment and the time requisite for obtaining a copy of the order. He is entitled to the former by virtue of the provisions of section 66A(3) of the Income-tax Act and he is entitled to the latter by virtue of the provisions of section 67A. Chakravartti C. J. was thinking of, inter alia, the clear provision of section 67A that " In computing the period of limitation prescribed for an appeal under this Act or for an application under section 66, the day on which the order complained of was made, and the time requisite for obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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