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TMI Blog1990 (12) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... s under that section by withdrawing the deduction of excess profits tax liability allowed earlier even when the excess profits tax proceedings were quashed by the court ?" The assessee is an Hindu undivided family. The income-tax assessments of the assessee for assessment years 1944-45 to 1947-48 were completed in March, 1953. The excess profits tax payable by the assessee for each of these years was allowed as a deduction while computing the total income of the respective years. Subsequently, notices were issued under section 13(1) of the Excess Profits Tax Act, 1940, to the assessee with respect to the said four assessment years, the validity whereof was questioned by the assessee on the ground that the Hindu undivided family having got ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax and in consequence thereof, it is necessary to amend the total income of the assessee chargeable to income-tax, the Assessing Officer may make the necessary amendment and the provisions of section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the date of the order making or modifying the assessment of such excess profits tax or business profits tax, as the case may be. Explanation. -For the purposes of this sub-section, where the assessee is a firm the provisions of sub-section (1) shall also apply as they apply to the amendment of the assessment of the partners of the firm." A reading of section 155(3) shows that it provides for passing of cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute. Merely because notices issued for assessment to the excess profits tax were quashed, it does not affect the assessee's liability to pay the excess profits tax. In such a situation, section 155(3) does not apply. We find ourselves unable to agree with this reasoning. Evidently, the Tribunal has missed the crucial expression occurring in section 155(3) ; in the first clause of sub-section (3), the expression used is "payable", and not "liable". liability to tax and its payability are two different things., For example, liability to income-tax is created by sections 3 and 4 of the Income-tax Act read with the relevant section of the annual Finance Act, but the tax becomes payable, ordinarily speaking, only when an assessment is made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other argument urged by learned counsel for the assessee is that sub-section (3) of section 155 applies only where the excess profits tax is "modified" in appeal, revision or other proceeding. Learned counsel emphasised upon the meaning of the word "modified" and said that this expression does not mean total withdrawal or revocation or cancellation of the tax, but only variation. In this behalf, the dictionary meaning of the word "modify" was relied upon by him as also the observations of the Supreme Court in paragraph 23 of its judgment in Burrakur Coal Co. Ltd. v. Union of India, AIR 1961 SC 954. We are, however, of the opinion that the expression "modified" must be understood in the context in which it occurs. As is often said, a word ..... X X X X Extracts X X X X X X X X Extracts X X X X
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