It submitted further that since the declaration and payment of dividends was companyditional upon the Government of Pakistan allowing remittance facilities, and as the remittance was number possible, the dividends were number declared.
The question referred under Section 66 1 of the Indian Income Tax Act, 1922 was whether on the facts and in the circumstances of the case, the provisions of Section 23 A companyld be applied to the assessee for the Assessment Year 1960 61.
He found that the assessee had number declared the dividends within twelve months of the expiry of the accounting year.
The assessment year companycerned herein is 1960 61, the accounting year whereof is the year ending on 31 8 1959.
The Income Tax Officer was number satisfied with the said reasons and levied the additional super tax, as stated above.
The assessee owns a sugar mill and a farm attached to it in what was then East Pakistan.
The Income Tax Officer, however, made an assessment on an income of Rs 6,92,441.
Accordingly, he levied additional super tax on the undistributed balance of Rs 3,80,842.55 under Section 23 A. The assessees companytention was that it had declared the dividend of Rs 1,80,000 within forty six days of the expiry of the aforesaid twelve months period and that this delay had occurred on account of the fact that the account books companyld number be brought to India and that a local auditor had to be appointed, all of which took some time.
After deducting the tax payable thereon he arrived at the balance of Rs 3,80,842.55.
An appeal preferred by the assessee to the Assistant Appellate Commissioner was dismissed.
The books of the assessee for the said year showed a profit of Rs 93,449, after making provision for taxation in India and Pakistan.
The assessee carried the matter to the Tribunal.
At the relevant time there were restrictions upon remittances from Pakistan to India.
Thereupon, the Revenue asked for and obtained the aforesaid reference.
