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TMI Blog1979 (11) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the amounts appearing in the balance-sheet of the assessee as retained earning and unremitted foreign income were reserves for computation of capital under the Super Profits Tax Act?" Previously, for the assessment year 1963-64, the very same latter question, as has now been referred for the opinion of this court, had been referred at the instance of the department. That matter was registered by this court as Tax Case No. 58 of 1974, and was heard along with the reference by the assessee which was registered as Tax Case No. 54 of 1974 [Heckett Engineering Co. v. CIT reported in [1979] 120 ITR 417 (Pat)]. A common judgment was passed in the said two cases on the 21st February, 1979, and it was held that the amounts appearing in the balance-sheet of the assessee as retained earning and unremitted foreign income were reserves for the computation of capital under the Super Profits Tax Act. The question which arises in the reference made at the instance of the department having, therefore, been answered by the said judgment dated the 21st February, 1979, I do not find any purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment under the said Act was without jurisdiction. This very argument had been raised in the two cases, Tax Cases Nos. 54 and 55 of 1974, but was repelled by the judgment passed in those cases: [1979] 120 ITR 417 (Pat). It had been held that although the word if company " has not been defined in the S.P.T. Act, sub-s. (10) of s. 2 of the Act says: " All other words and expressions used herein but not defined and defined in the Income-tax Act shall have the meanings respectively assigned to them in that Act." The changes in the definition of " company " were noticed in that judgment and it was held that both under the old Act and under the new Act, even a non-Indian company declared to be a "company", shall be deemed to be a company for the purpose of the I.T. Act and by necessary intendment it would be a " company " for the purpose of the S.P.T. Act. It was further held by reference to the provisions contained in s. 297(2)(k) of the I.T. Act, 1961, that the declaration made under the Indian I.T. Act, 1922, declaring the assessee to be a company, would hold good even after the repeal of the Indian I.T. Act, 1922 ; such a declaration will continue in force even after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Boards of Revenue Act, 1963 (Act LIV of 1963). Under the Indian I.T. Act, 1922, " Board " meant the Central Board of Revenue constituted under the Central Board of Revenue Act, 1924 (Act IV of 1924). The argument which has been built up on the difference between the authority which is now authorised under the I.T. Act, 1961, to declare a company as a company for the purpose of levy of income-tax, is that this was not the authority which had declared the assessee to be a company for the purpose of levy of income-tax and since the authority is no more in existence, the declaration made by it making the assessee a company liable to a charge of income-tax, did no more survive. Consequently, the charge of tax under the C. (P.)S.T. Act, 1964, was without jurisdiction. The next part of the argument is by reference to sub-s. (9) of s. 2 of the C. (P.)S.T. Act, 1964, which reads: "All other words and expressions used herein but not defined and defined in the Income-tax Act shall have the meanings respectively assigned to them in that Act." The argument is that by virtue of this provision the definition of a " company " under the I.T. Act cannot be projected for the purpose of tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, declaring, the assessee to be company, would be a valid declaration for the purpose of the C. (P.) S.T. Act. It would further follow that that declaration will continue in force by virtue of the provision contained in s. 297(2)(k) of the I.T. Act, 1961. Shri Roy, however, submits that the Supreme Court in its decision in the case of Bengal Immunity [1955] 6 STC 446 ; AIR 1955 SC 661 has said in so many words that legal fictions are created only for some definite purpose and that such fiction cannot be projected beyond the purpose for which it has been created. In this case their Lordships had considered the import of the Explanation added to art. 296(1) of the Constitution, as to whether that Explanation besides applying to cl. (a) of art. 286(1) would also apply to its sub-art. (2), and in that context their Lordships observed that the legal fiction created by the Explanation could not apply for a purpose other than the purpose of cl. (a) of art. 286(1). It has, therefore, been argued by the learned counsel for the assessee that the declaration of an assessee as a "company" for the purpose of the I.T. Act could not be projected and held to be a declaration for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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