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TMI Blog1969 (4) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of the bonus shares issued @ 0-2-0 annas per rupee and also of the excess dividend over 6 per cent. @ 0-2-0 annas per rupee. In these premises, the Income-tax Officer computed the reduction in rebate at Rs. 45,973.62 and held that there was no unabsorbed reduction in rebate amounting to Rs. 20,219.37. Again, while he was assessing the income for 1957-58, the Income-tax Officer worked out the rebate at Rs. 11,487.90 (@ 30%) under the Finance Act, 1957. He, thereupon, determined the unabsorbed reduction of rebate at Rs. 8,731.10 after taking into consideration the unabsorbed reduction of 1956-57. In the assessment year 1958-59 the question of set-off of rebate did not arise as there was a net loss of Rs. 37,046. For the year 1959-60 the Income-tax Officer worked out the corporation tax payable by the assessee as follows : Super-tax on Rs. 1,01,165 @ 50% 50,582.50 Less rebate @ 30% 30,349.50 Reduction in rebate as per sub-clause (a) of clause (i) of the second proviso to Paragraph D of Part II of the Schedule, the unabsorbed reduction in rebate 8,731.10 21,618.40 ---------------- ------------------ 28,964.10 Less paid under section 18A 28,964.10 ---------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act and consequently the High Court and the Supreme Court (hearing a reference under the said Act) to consider the question of vires of the Finance Acts. The Supreme Court's observations in K. S. Venkataraman and Co. (P.) Ltd. v. Slate of Madras in this connection may in the first instance be referred to. At page 130 it is stated : " As the Tribunal is a creature of the statute, it can only decide the dispute between the assessee and the Commissioner in terms of the provisions of the Act (i.e., the Income-tax Act). The question of ultra vires is foreign to the scope of its jurisdiction. If an assessee raises such a question, the Tribunal can only reject it on the ground that it has no jurisdiction to entertain the said objection or decide on it. As no such question can be raised or can arise on the Tribunal's order, the High Court cannot possibly give any decision on the question of the ultra vires of a provision. At the most the only question that it may be, called upon to decide is whether the Tribunal has jurisdiction to decide the said question. On the express provisions of the Act it can only told that it has no such jurisdiction. The appeal under section 66A( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, this Act shall nevertheless have effect until such provision is so made as if the provision in force in the preceding assessment year or the provision proposed in the Bill then before Parliament, whichever is more favourable to the assessee, were actually in force. " The charging section, namely, section 4 of the Act of 1961, corresponding to section 3 of the Act of 1922 also, inter alia, provides: " Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year or previous years, as the case may be, of every person ...... All these provisions clearly indicate that the Income-tax Act has no operative force of its own and the Finance Act appears to be an integral part of the Income-tax Act itself. Now, since the vires of the Income-tax Act cannot be enquired into either by the Appellate Tribunal or the High Court or the Supreme Court in terms of the aforesaid provisions, these authorities have no jurisdiction also to deal with the vires of the an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. But under the first proviso certain rebates have been provided for and in the second proviso there are provisions for reduction of Tebates under specified circumstances. In other words, these provions relating to rebate and reduction do not levy tax on any income. They take in to consideration only rebates and reductions on the basis whereof the income chargeable to super-tax is to be ascertained. In these premises, the assessee's submissions the Tribunal questioning the competence of the Finance Act appears to be of no substance. We may, in this connection, refer to a decision of the Madras High Court in Papanasam Mills Co. (Private) Ltd. v. Commissioner of Income-tax. The Madras High Court has said that the provisions of the second proviso to Paragraph D of Part II of the First Schedule to the Finance Act, 1956,which provide that the standard rebate in super--tax permissible to a company under the first proviso to that Paragraph shall be reduced if the dividends declared by the company are in excess of th minima specified therein, are valid. There is no levy, as such according to the Madras High Court, of any super-tax on the excess dividend : super-tax is levied only on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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