UMA KANT AND COMPANY P LTD Vs. C I T RAJ JAIPUR

JUDGEMENT

(1.) IN both these petitions for reference, common questions of law arise and, therefore, we propose to dispose them of by one common order.

(2.) THE assessee in these two cases is a private limited company carrying on its business at Alwar. THE years of assessment for which the questions have been raised are 1961-62 and 1962-63. D. B. Income-tax Case No. 142 of 1971 relates to the assess-ment year 1961 62 while D. B. Income-tax Case No. 150 of 1971 relates to the assessment year 1962 63. THE assessee company had its commercial dealings with M/s Makhan Lal and Company Ltd. , Penang, which was carrying on its business in the State of Singapore. THE assessee company exported at the orders received from the Non-Resident Company of M/s Makhanlal and Company Ltd. , gunnies, jute, twine shellac, mustard oil and other similar commodities. At the end of the financial year i. e. the year ending Deewali 8-11 61, the assessee company credited to the account of the Non Resident Company certain amounts under the heading 'foreign Agents Commission' and later on those amounts were remitted to the said company. While doing so, the assessee-company did not deduct the amount of tax chargeable on the amount remitted by the assessee-company under sec. 18 (3) (b) of the Income-tax Act 1922 for the first time and under sec. 195 (1) of the Income-tax Act, 1961 for the second year. THE Income-tax Officer issued show-cause notice to the assessee-company stating that the Non Resident Company was neither registered in India, nor did it make any prescribed arrangements for declaration of dividends in India and, therefore the assessee company was bound to deduct the tax out of the payments made to the Non-Resident Company. Later on, the assessee-company was taxed on the amount so remitted by it. On appeal before the Assistant Appellate Commissioner, it was held that the assessee company was bound under the provisions of the Income-tax Act to deduct the tax chargeable on the amount remitted to the Nor-Resident Company and since it was not done by the assessee-company, it was Table to pay tax on that amount THE second appeal was preferred before the Appellate Tribunal, Delhi. But because the Head Office of the assessee-company was meanwhile transferred to Calcutta the assessee-company prayed to the President of the Tribunal to transfer its cases from' the file of Delhi Bench to that of Calcutta Bench. THE President, however, accepted the request of the assessee company and transferred the appeals from the file of the Delhi Bench of the Tribunal to that of the Calcutta Bench of the Tribunal. THE appeals of the assessee company were rejected by the Calcutta Bench. Reference applications were made by the assessee-company under sec. 256 (1) of the Income tax Act, 1961 but they were rejected by the Tribunal on the ground that no question of law was involved in this matter. It is against this order of rejection of the Tribunal that the assessee-company has preferred these two applications under sec 256 2) of the 1961 Act, for the reference on the questions mentioned in the petitions.