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TMI Blog1976 (5) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Companies Act, 1956. The facts stated and found by the Appellate Tribunal may be briefly stated as follows: M/s. Permutit Co. Ltd. was incorporated as a public limited company in 1937 under the relevant provisions of the Companies Act of England. Its shares were held by the public and were freely transferable. Its shares carrying more than 50% of the voting power were not controlled or held by five or fewer persons. It held 1,50,000 shares out of 2,50,000 shares of the assessee in the relevant accounting year. Permutit Company was not assessed to income-tax under the Indian Income-tax Act, 1922, as a company for the assessment year commencing on April 1, 1947. The assessee claimed before the Income-tax Officer at the time of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act, 1961. It reads as follows: "(17) ' company' means- (i) any Indian company, or (ii) any association, whether incorporated or not and whether Indian or non-Indian, which is or was assessable or was assessed under the Indian Income-tax Act, 1922 (11 of 1922), as a company for the assessment year commencing on the 1st day of April, 1947, or which is declared by general or special order of the Board to be a company for the purposes of this Act." It is the submission of Mr. B. L. Pal, the learned counsel for the revenue, that since Permutit Company was not assessed at all under the Indian Income-tax Act, 1922, the Tribunal should have ascertained the fact, namely, that whether Permutit Company "was assessable" in the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1st April, 1947, it should be held that the said company was a company within the meaning of that term used in the 1922 Act and, therefore, this question should be answered in favour of the assessee. Now, the definition of the word "company" under the Indian Income-tax Act, 1922, at the relevant time was as follows: "2. (6) 'company' means a company as defined in the Indian Companies Act, 1913, or formed in pursuance of an Act of Parliament or of Royal Charter or Letters, Patent or of an Act of the Legislature of a British possession or of a law of an Indian State, and includes any foreign association whether incorporated or not, which the Central Board of Revenue may, by general or special order, declare to be a company for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ford Dictionary, 3rd edition, volume 1, page 110, means "to tax", the word "assessed" means "fixed by an assessment, taxed ", and the word "assessable" means capable of assessment, liable to assessment. Therefore, the words " was assessable ...... as a company" used in section 2(17)(ii) of the Act when read within its context and in the light of the relevant provisions of the Income-tax Act, 1961, and the Finance Acts must mean a company which was capable of being assessed as a company, that is to say, in the status of a company irrespective of any question as to whether it had any assessable income in the previous year relevant to the assessment year commencing on 1st April, 1947. Since Permutit Company was a company under the Indian Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 947, had an income which was assessable by the revenue authorities in India under the relevant Income-tax Act. If this meaning is given to the word "assessable", then the other part of the section "was assessed" becomes redundant. Such meaning if attributed to the expression "assessable" would include in the category of companies a very limited number of entities which in the assessment year commencing on the 1st April, 1947, had an assessable income in India but for some reason or other was not assessed. Such non-assessment may be ascribed to the violation of law by such an assessee or due to the negligence of the revenue. It does not appear to me that the legislature intended to give such a limited meaning to the expression. Apart fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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