9911796707
TMI Blog1971 (5) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in its total income for rate purposes only. Subsequently, he issued a notice under section 154/155 of the Income-tax Act, 1961, stating that the order dated January 30, 1964, was to be rectified as the petitioner was liable to pay additional surcharge, amounting to Rs. 11,260.13, which ought to have been charged but was not so charged. The petitioner appeared before the Income-tax Officer and denied his liability for the additional surcharge. The Income-tax Officer, thereafter, issued a notice of demand for a sum of Rs. 8,010.09 as additional surcharge computed under section 3 of the Indian Finance Act, 1963. The petitioner complains that the notice of demand was not accompanied by the order of the Income-tax Officer, rectifying the earlier assessment order. By means of a letter dated March 21, 1967. the petitioner requested the Income-tax Officer to supply to it a copy of the order in pursuance of which the demand in question had been raised, but the same was not supplied. As the period of limitation for filing an appeal was about to expire, the petitioner filed an appeal before the Appellate Assistant Commissioner, annexing a copy of the notice of demand dated March 15, 1964. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder made by the Income-tax Officer, dated January 30, 1969, and notice of demand issued in pursuance of it, as also of the appellate and revisional orders passed by the Appellate Assistant Commissioner and the Commissioner of Income-tax dated October 9, 1968, and August 13, 1970. One of the grounds urged by the petitioner in support of its prayer for quashing the orders passed by the Appellate Assistant Commissioner and the Commissioner of Income-tax is that the Appellate Assistant Commissioner misconceived the proceedings and passed an order dismissing the appeal under a wrong impression that an application for rectifying the original assessment order dated January 13, 1964, had been moved on behalf of the petitioner and that no orders on that application had been passed. It was contended that the proceedings for rectification were initiated by the Income-tax Officer suo motu and an order for rectification had been made. Learned counsel for the petitioner contended that the Income-tax Officer did not supply copy of the order rectifying the original assessment and thereby he deprived the petitioner of an effective right of appeal. It is true that an irregularity was committed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, clearly entitled to claim exemption from payment of income-tax as provided in section 81 of the Act in respect of its total income for the assessment year 1963-64. Learned counsel for the petitioner argued that the additional surcharge payable under the Finance Act, 1963, is nothing but income-tax. According to section 81 of the Income-tax Act, 1961, the petitioner-society is exempt from payment of income-tax and as such the respondents have no jurisdiction to demand any additional surcharge from the petitioner. Learned counsel appearing for the revenue, however, urged that a perusal of the various provisions of the Finance Act shows that the legislature treated the imposition of " additional surcharge " as a levy distinct and separate from " income-tax ". He urged that income-tax is chargeable on the total income of an assessee whereas the additional surcharge is chargeable with respect to the residual income of the assessee. Residual income, as defined in the Finance Act, is something different from " total income " as defined in the Income-tax Act. He further invited the attention of the court to the heading " surcharge on income-tax ", as contained in the First Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be increased by a surcharge for the purposes of the Union calculated in the manner provided therein. The language used in section 2 is that the income-tax is to be increased by the aggregate of the surcharges. In other words, the section provides that the total income-tax payable by an assessee would be that calculated at rates specified in Part 1 plus the surcharges calculated in the manner provided in that part. This section does not provide for the levy of a tax other than income-tax. Section 2 of the Finance Act, 1963, clearly indicates that the total amount computed in the manner provided therein after adding the surcharge and the additional surcharge, is the total amount of income-tax that is payable by an assessee. This section provides for the mode of calculating total income-tax payable by an assessee. The fact that under the First Schedule the additional surcharge is calculated and worked out on the basis of residual income does not mean that additional surcharge is a tax on residual income and not a tax on total income. Section 2 of the Finance Act purports to charge only income-tax and provides how the income-tax is to be computed. The basic method of computing incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature contemplated by section 81 of the Act is to be worked out has been laid down in section 110 of the Income-tax Act, which runs as follows : " Where there is included in the total income of an assessee any income on which no income-tax or, as the case may be, no super-tax is payable under the provisions of this Act, the assessee shall be entitled to a deduction- (a) from the amount of income-tax with which he is chargeable on his total income of an amount equal to the income-tax calculated at the average rate of income-tax on the amount on which no income-tax is payable, and (b) from the amount of super-tax with which he is chargeable on his total income, of an amount equal to the super-tax, calculated at the average rate of super-tax, on the amount on which no super-tax is payable. " It will thus be seen that the only effect of making a provision like that of section 81 of the Act is that the income-tax authorities will have to compute the income-tax in respect of the total income of the petitioner (including surcharge and the additional surcharge calculated in the manner provided in the Finance Act of 1963) and from that an amount equal to the income-tax calculat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
