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TMI Blog1971 (12) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the following question to us at the instance of the assessee under section 256(1) of the Income-tax Act, 1961. " Whether, on the facts and in the circumstances of the case, the super-tax levied under section 23A on the assessee for the assessment year 1960-61 is in accordance with law ? " The super-tax was levied under section 23A of the Indian Income-tax Act, 1922, the relevant part of which as it stood at that time is in these terms: " 23A. Power to assess companies to super-tax on undistributed income in certain cases.-(1) Where the Income-tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any company within the twelve months immediately following the expiry of that pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to in clause (a), clause (b) or clause (c) and the dividends actually distributed, if any. " The relevant accounting period relating to the assessment year 1960-61 was the year which ended on April 30, 1959. The net profit of the assessee-company for that year according to its accounts was Rs. 23,129.70. During that year it had made a provision for income-tax of Rs. 45,000 and the total profit was Rs. 68,129.70. It declared a dividend of 4 per cent. which worked out to Rs. 16,000. The assessing authority fixed the total income assessable to tax for the year 1960-61 at Rs. 70,723. The Income-tax and the corporation tax on that worked out to Rs. 31,825. The assessee had paid profession tax of Rs. 1,794. The total of the taxes deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of dividend. Out of this sum, the assessee contended that at least Rs. 3,520 was required for payment of the balance of tax due for the previous years. This figure has been accepted by the Tribunal in paragraph 4 of its order. Deducting Rs. 3,520 from Rs. 23,129.70 what is left is only Rs. 19,609.70. Rs. 16,000 out of this had been admittedly paid leaving a balance of Rs. 3,609.70. If the assessee had declared one more per cent. by way of dividend he would not have had money to pay dividend out of the profits of the year, as one per cent. would come to Rs. 4,000. He certainly had no money to declare a dividend which would satisfy the section as he would require in that case a sum of Rs. 24,117 which is 65 per cent. computed under the sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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