9911796707
TMI Blog1975 (9) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... e is a public limited company running a textile mill at Kalol. It filed its return of income for the assessment year 1967-68, disclosing a total income of Rs. 6,89,500 on September 30, 1967. It appears that for the previous year relevant to the assessment year 1965-66, the assessee had declared dividend of Rs. 1,20,000, when its total income for the assessment year 1965-66 was determined at nil and, therefore, no tax was chargeable for that assessment year. Similarly, the total income for the assessment year 1966-67 was also determined at nil after setting off the development rebate carried forward from the earlier years and, therefore, no tax was chargeable for the said assessment year. It should be noted that the assessee-company declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd confirmed the order of the ITO rectifying the assessment. The assessee-company, therefore, carried the matter in further appeal to the Tribunal, which, by its short order of January 8, 1973, held that the chargeability of dividend tax was not free from doubt and it required debate or argument in order to decide finally as to whether the said tax was chargeable on the said amount of Rs. 1,20,000 declared for the assessment year 1965-66. The Tribunal, therefore, was of the opinion that the invocation of the power under s. 154 was completely misconceived and, in that view of the matter, allowed the appeal and set aside the order of rectification in question. It is at the instance of the Revenue that this reference has been made and the ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of the Act in a proceeding under section 154 of the Income-tax Act, 1961. A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions..." In the context of the above settled legal position, we have to examine whether there was an error apparent on the record in the matter of assessment of the assessee-company for the assessment year 1967-68. On behalf of the Revenue, learned advocate was at pains to carry us through the relevant provisions of the Finance Acts of 1965, 1966 and 1967, to impress upon us that this is not a question where conceivably there can be two opinions which would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the total income as does not exceed Rs. 10,00,000 55 per cent ; (2) on the balance, if any, of the total income 60 per cent; (ii) in any other case 65 per cent. of the total income; and (B) in addition, where the company is-..... (ii) a company as is referred to in clause (iii) of sub-section (2) or clause (a) or clause (b) of sub-section (4) of section 104 of the Income-tax Act, or... on so much of the total income as does not exceed the relevant amount of distributions of dividends by the company 7.5 per cent. Provided that ... Explanation 1.-In clause (B), the expression 'the relevant amount of distributions of dividends' means the aggregate of the following amounts, namely: (a) the amount, if any, by which the 'relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rror apparent on the record which the ITO was legally competent to rectify under s. 154 of the Act. The assessee, inter alia, contended before the Revenue authorities that for purposes of finding out the relevant amount of distributions of dividends, the ITO has to ascertain the amount, if any, by which the relevant amount of distributed dividends by the company as computed in accordance with the relevant provisions of the prior Finance Acts (in the present case Finance Acts 1965 and 1966) exceeded the total income assessable for the assessment year commencing on April 1, 1966. It may be, according to the assessee, that the total income may be nil, but it may be for various reasons and it may depend on various factors. It was, inter alia, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r commencing on April 1, 1966. The ITO might have, therefore, reasonably considered that the excess dividend declared for the assessment year 1965-66, namely, Rs. 1,20,000 and which was not subjected to tax was not to be brought to tax while computing dividend tax, for the assessment year 1967-68. We do not think that this can be said to be an interpretation which is not capable of being advanced on the provisions contained in cl. (a) to Explanation I of Paragraph F. It should be recalled that the ITO has, while computing the dividend tax for the assessment year 1967-68, considered the excess dividend which was not subjected to tax for the assessment year 1966-67. It is only in respect of the excess dividend declared for the year 1965-66 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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