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Commissioner of Income-tax, Gujrat Vs. Kohinoor Flour Mills - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtGujarat High Court
Decided On
Case NumberIncome-tax Reference No. 16 of 1973
Judge
Reported in[1975]99ITR54(Guj)
ActsIncome Tax Act, 1961 - Sections 141, 143, 156, 209, 210, 211, 212, 212(3), 215, 215(1), 215(2), 217, 217(1), 217(2), 217(3), 271(1), 273 and 275(5)
AppellantCommissioner of Income-tax, Gujrat
RespondentKohinoor Flour Mills
Appellant Advocate K.H. Kaji, Adv.
Respondent Advocate J.P. Shah, Adv.
Excerpt:
direct taxation - penalty - sections 217 and 273 of income tax act, 1961 - basis of penalty is amount payable under section 217 - interest payable in case of default of not filing return commences from 1st april of next following financial year independent of date of default. - - 1. a short but interesting question arises about the date as on which penalty under section 273(b) read with section 273(ii) of the income-tax act, 1961, may be levied. 5. the question, which has been referred to us, has caused us considerable anxiety in determining the true scope and effect of section 273(b) read with section 273(ii) of the income-tax act, 1961. in order to understand the scheme of the penalty prescribed by section 273(b), we have been required to consider sections 217, 215, 212 and 211......b.k. mehta j.1. a short but interesting question arises about the date as on which penalty under section 273(b) read with section 273(ii) of the income-tax act, 1961, may be levied. the dispute arises out of the following question which has been referred to us for opinion : 'whether, on the facts and in the circumstances on the case, the tribunal erred in law in holding that rs. 1,83,000 paid by the assessee on march 26, 1965, should be treated as valid advance tax and should be deducted from 75% of the tax determined for arriving at the basis for imposing the penalty under section 273(b) of the income-tax act, 1961 ?' 2. shortly stated the facts leading to this reference are as under : 3. the assessee is a private limited company. the relevant assessment year is 1965-66. before this.....
Judgment:

B.K. Mehta J.

1. A short but interesting question arises about the date as on which penalty under section 273(b) read with section 273(ii) of the Income-tax Act, 1961, may be levied. The dispute arises out of the following question which has been referred to us for opinion :

'Whether, on the facts and in the circumstances on the case, the Tribunal erred in law in holding that Rs. 1,83,000 paid by the assessee on March 26, 1965, should be treated as valid advance tax and should be deducted from 75% of the tax determined for arriving at the basis for imposing the penalty under section 273(b) of the Income-tax Act, 1961 ?'

2. Shortly stated the facts leading to this reference are as under :

3. The assessee is a private limited company. The relevant assessment year is 1965-66. Before this assessment, the assessee-company was not assessed previously. It was, therefore, liable to file an estimate of advance tax payable under section 212(3) and pay tax accordingly. The estimate was to be filed before 1st March, 1965, and the advance tax was to be paid before 15th March, 1965. It appears that on 25th March, 1965, the assessee filed an estimate showing an income of Rs. 3,66,000 and paid advance tax of Rs. 1,83,000 on 26th March, 1965. As the estimate was not filed before the due date, that is, 1st March, 1965, the Income-tax Officer imposed penalty of Rs. 4,000. The assessee carried the matter in appeal before the Appellate Assistant Commissioner who held that the assessee was liable to pay penalty but he directed that such penalty should be the minimum leviable under the said section and should be computed on the basis of the tax payable after deducting the amount of Rs. 1,83,000 paid by the assessee on 26th March, 1965. The Income-tax Officer, therefore, carried the matter in appeal before the Tribunal.

4. A contention was raised on behalf of the Income-tax Officer that since the amount of Rs. 1,83,000 was paid after the due date, it should not be treated as part of the advance tax. The Tribunal was of the opinion, on reading section 273, that in cases of default to furnish an estimate of advance tax payable by the assessee in accordance will the provisions of sub-section (3) of section 212 without reasonable cause, penalty which could be levied should not be less than 10% and not exceeding one and a half times the amount on which interest was payable under section 217. The Tribunal, having regard to the provisions of section 217(1) and (2), came to the conclusion that the amount of tax paid by the assessee before 1st April, 1965, should be deducted from the 75% of the tax calculated according to section 215(1) and (2) of the aforesaid Act. The Tribunal also considered that the default committed by the assessee-company in filing the estimate of advance tax payable by it and also the default in paying actually the advance tax, were not so serious as to justify the levy of a penalty of an amount more than the minimum as prescribed under section 273(ii) of the aforesaid Act. The Tribunal, therefore, directed that the penalty at the rate of 10% should be levied on the amount of tax payable by the assessee-company as reduced by an amount of Rs. 1,83,000 paid by the assessee-company on 26th March, 1965. At the instance of the revenue, therefore, the question set out hereinabove has been referred to us for our opinion.

5. The question, which has been referred to us, has caused us considerable anxiety in determining the true scope and effect of section 273(b) read with section 273(ii) of the Income-tax Act, 1961. In order to understand the scheme of the penalty prescribed by section 273(b), we have been required to consider sections 217, 215, 212 and 211. The relevant portions of section 273(b) and section 273(ii) so far as they are relevant for purposes of this reference read as under :

'273. False estimate of or failure to pay advance tax. - If the Income-tax Officer, in the course of any proceedings in connection with the regular assessment, is satisfied the any assessee - ...

(b) has without reasonable cause failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of sub-section (3) of section 212,

he may direct that such person shall, in addition to the amount of tax, if any, payable by him, pay by way of penalty a sum - ....

(ii) Which, in the case referred to in clause (b), shall not be less than ten per cent., but shall not exceed one and a half times the amount on which interest is payable under section 217.'

6. Therefore, in order to determine what should be the amount on which penalty should be levied, the income-tax authorities have to find out what is the amount on which interest is payable under section 217. Now referring to section 217, we find that it consists of two sub-sections, namely, (1) and (2). They read as under :

'217. Interest payable by assessee when no estimate made. - (1) Where, on making the regular assessment the Income-tax Officer finds that any such person as is referred to in sub-section (3) of section 212 has not sent the estimate referred to therein, simple interest at the rate of nine per cent. Per annum from the 1st day of April next following the financial year in which the advance tax was payable in accordance with the said provisions up to the date of the regular assessment shall be payable by the assessee upon the amount equal to the seventy-five per cent. referred to in sub-section (1) of section 215.

(2) The provisions of sub-sections (2), (3) and (4) of section 215 shall apply to interest payable under this section as they apply to interest payable under that section.'

7. The next step, which the Income-tax Officer has to resort to for purposes of determining what is the amount on which interest is payable under section 217, is to consider what is the amount equal to 75% as prescribed under sub-section (1) of section 215 and also how that amount is to be worked out having regard to the provisions contained in sub-sections (2), (3) and (4) of section 215. Sub-sections (1) and (2) of section 215 are only relevant for purposes of this reference. They provide as under :

'215. Interest payable by assessee. - (1) Where in any financial year an assessee has paid advance tax under section 212 on the basis of his own estimate, and the advance tax so paid is less than seventy-five percent. Of the tax determined on the basis of the regular assessment (reduced by the amount of tax deductible in accordance with the provisions of section 192 to 194, section 194A and section 195) so far as such tax relates to income subject to advance tax and so far as it is not due to variations in the rates of tax made by the Finance Act enacted for the year for which the regular assessment is made, simple interest at the rate of nine per cent. Per annum from the 1st day of April next following the said financial year up to the date of the said regular assessment shall be payable by the assessee upon the amount by which the advance tax so paid falls short of the said seventy-five per cent.

(2) Where before the date of completion of a regular assessment, a provisional assessment is made under section 141 or tax is paid by the assessee otherwise than in pursuance of such a provisional assessment -

(i) interest shall be calculated in accordance with the foregoing provision up to the date on which the tax is paid either as provisionally assessed or otherwise; and

(ii) thereafter interest shall be calculated at the rate aforesaid on the amount by which the tax as so paid (in so far as it relates to income subject to advance tax) falls short of the said seventy-five per cent.'

8. For purposes of this reference sub-section (3) of section 212 is also relevant, which provides :

'Any person who has not previously been assessed by way of regular assessment under this Act or under the Indian Income-tax Act, 1922 (XI OF 1922), shall before the 1st day of March in each financial year, if his total income exclusive of capital gains of the period which would be the previous year for the immediately following assessment year is likely to exceed the maximum amount not chargeable to income-tax in his case by two thousand five hundred rupees, send to the Income-tax Officer -

(i) an estimate of the total income exclusive of capital gains of the said previous year;

(ii) an estimate of the advance tax payable by him calculated in the manner laid down in section 209;

and shall pay such amount as accords with his estimate, on such of the dates specified in section 211 as have not expired by instalments which may be revised according to sub-section (2).'

9. Now, according to section 211, advance tax is payable in equal instalments on the 1st day of June, 1st day of September, 1st day of December, and first day of March in the financial year except in cases of those assessments in respect of which the previous year in respect of any source of income ends after the 31st day of December and before the 30th day of April, in which case advance tax on that source of income shall be payable in three equal instalments on the 1st day of September, the 1st day of December and the 15th day of March, respectively.

10. The admitted facts, therefore, so far as the present assessee-company is concerned, are that before the assessment year under reference, it was no previously assessed. When its income exceeded Rs. 2,500 it became liable to file an estimate of the total income exclusive of capital gains of the previous year and also an estimate of advance tax payable by it calculated in the manner prescribed under section 209. It was also under an obligation to pay the amount of advance tax according to its estimate on the dates as specified in section 211. The previous year of the assessee-company was ending on 31st March, 1956, and it was, therefore, within the exception as provided under section 211 and, therefore, it was under an obligation to make payment of advance tax before 1st day of September, 1st day of December and 15th day of March. It is also an admitted position that the assessee-company did not file an estimate before 1st day of March as required under section 212(3) nor did it make payment of any advance tax before 1st day of March as prescribed under the proviso to section 211. However, the assessee-company filed an estimate showing an income of Rs. 3,66,000 on 25th March, 1965, and paid advance tax of Rs. 1,83,000 on 26th March, 1965.

11. The question, therefore, arises as to what should be the basis on which penalty should be levied. The Income-tax Officer, while determining the question as to what amount should be imposed as penalty, observed in paragraph 4 of his order that the minimum penalty worked out at Rs. 25,726 and the maximum at Rs. 3,85,888. He, however, levied penalty of Rs. 4,000. The Appellate Assistant Commissioner confirmed that the assessee was liable to penalty but he directed that the penalty should be the minimum leviable and worked out on the basis of tax payable after deducting Rs. 1,83,000 paid by the assessee on 26th March, 1965. Before the Tribunal in appeal filed by the Income-tax Officer, it was urged on behalf of the Income-tax Officer that the sum of Rs. 1,83,000 was paid after the due date and should not be treated as a part of advance tax.

12. The pertinent question, therefore, which arises in this reference is that what should be the amount on the basis of which a penalty could be levied under section 273(b) read with section 273(ii). An involved scheme has been evolved under section 273 for purposes of determining the question of levy of penalty. Section 273(a) provides for a default on the part of an assessee where he has furnished under section 212 an estimate of advance tax payable which he knew or had reason to believe to be untrue. In other words, it provides for a default by the assessee in furnishing an untrue estimate which he knew or had reason to believe it to be untrue. It deals with a case of an overt act with intention and knowledge thereof. Section 273(b) provides for a default on the part of the assessee where he has without reasonable cause failed to furnish an estimate of the advance tax payable by him as required by section 212(3). The consequences of either of the defaults referred to in clauses (a) and (b) of section 273 have been provided in section 273(i) or (ii), as the case may be. As far as the default under section 273(a) is concerned, it has been provided that the Income-tax Officer may direct that such person shall, in addition to the amount of tax, in any, payable by him, pay be way of penalty a sum which shall not be less than ten per cent but shall not exceed one and a half times the amount by which the tax actually paid during the financial year immediately preceding the assessment year under the provisions of Chapter XVII-C falls short of 75% of the determined on the regular assessment as may be modified under the provisions of section 215, or where a notice under section 210 was issued to the assessee, the amount payable thereunder, whichever is less, while in case of default under section 273(b), the Income-tax Officer may direct the assessee to pay over and above the amount of tax payable by him, a sum by way of penalty, which shall not be less than 10 per cent the but shall not exceed one and a half times the amount on which interest is payable under section 217. In the present case, we are concerned with the default by the assessee-company in not furnishing the estimate of advance tax as required under section 212 without reasonable cause. In that case, as stated above, the amount on the basis of which penalty can be levied by the Income-tax Officer is one on which interest is payable under section 217. Section 217 provides for the payment of interest by the assessee where no estimate is made. In order to compute that amount on which interest is to be paid, the taxing authorities have to work out the amount as required under section 217(1) and (2). Sub-section (1) of section 217 provides that in case of default of not filing estimate as required under section 212(3), the assessee shall pay simple interest at the rate of 9% per annum from the 1st day of April next following the financial year in which advance tax was payable up to date of regular assessment upon the amount equal to 75% referred to in sub-section (1) of section 215. It is then provided under sub-section (2) of section 217 that the provisions of sub-sections (2), (3) and (4) of section 215 shall apply to the interest payable under the said section 217 as they apply to interest payable under section 215. The Income-tax Officer, therefore, in order to determine the basis of penalty under section 273(ii) for default under section 273(b) has to look to section 215(1) for purposes of computing what is the amount equal to 75% as referred to in the said sub-section. Section 215 provides for the payment of interest in case where the advance tax paid is less than seventy-five per cent of the tax determined on the basis of the regular assessment as reduced by the amount of tax deducted at source. It, therefore, follows that the amount which has been made the basis for levy of penalty under section 273(b) read with section 273(ii) is one which is 75% of the tax determined on the basis of the regular assessment as reduced by the amount of tax deducted at source. However, by sub-section (2) of section 217 the provisions contained in sub-sections (2), (3) and (4) of section 215 have been made applicable to the interest payable under section 217. Sub-section (2) of section 215, which is relevant for our purposes, provides that where before the date of completion of regular assessment, a provisional assessment is made under section 141, or where tax is paid by the assessee otherwise than in pursuance of such a provisional assessment, interest is to be calculated in accordance with the provisions contained in section 215(1) up to the date on which the tax is paid either as provisionally assessed or otherwise, and for the period subsequent thereto, interest is to be calculated at the rate of 9% as provided under section 215(1), on the amount by which the tax so paid falls short of the said 75%. The Tribunal, therefore, while determining what is the amount on the basis of which penalty could be levied by the Income-tax Officer under section 217, considered the amount according to section 217 on which interest is payable. In computing that amount according to section 217, the Tribunal also looked to sub-section (2) of section 217 which brought into application the provision contained in sub-section (2) of section 215, whereunder for determining the amount of interest, the tax paid either under the provisional assessment or otherwise is to be deducted. The Tribunal, therefore, in view of section 217(1) and (2) read with section 215 (1) and (2) came to the conclusion that the assessee-company was entitled to get a deduction of Rs. 1,83,000 being the amount of tax paid on 26th March, 1965.

13. On behalf of the revenue, a serious grievance was made that the Tribunal was completely in error in giving this deduction, as the Tribunal was concerned only with the question of levy of penalty and not with the question of the obligation of the assessee to pay interest. In other words, it was contended by Mr. Kaji, the learned advocate, appearing on behalf of the revenue, that the Tribunal has to look to the position as was available on the date of default and not to any subsequent events which might have taken place thereafter. In the submission of Mr. Kaji, having regard to the position available, on the date of the default, which in the present case for the purpose of estimate is 1st March, 1965, and for purpose of payment of advance tax 15th March, 1965, no payment of tax was made and, therefore, the Tribunal was not entitled to grant any deduction of the tax paid thereafter.

14. On behalf of the assessee it was urged that the Tribunal was justified in considering the amount of tax paid on 26th March, 1965, because while ascertaining the amount on which penalty is to be levied, the Tribunal has to consider what was the amount on which interest is payable under section 217. And while determining that amount, which according to section 217(1) is 75% referred to in sub-section (1) of section 215, the Tribunal must consider that it is 75% of the tax determined on the basis of the regular assessment, and if 75% of the amount can be ascertained with reference to the tax determined on the basis of the regular assessment, the Tribunal must consider all the payments made after the date of default. The next question which has, therefore, been posed before this court is what is the crucial date on which penalty could be imposed on the assessee company. There are three conceivable possibilities with regard to the crucial date; one, as contended on behalf of the revenue, the date of default; second, the date on which interest becomes payable on the amount under section 217; and the third, as contended on behalf of the assessee company, the date of the regular assessment.

15. We are of the opinion that having regard to the tenor and tense of the language used in section 273(b) read with section 273(ii), it cannot be the date of default as contended on behalf of the revenue. The basis of penalty under section 273(ii) is the amount on which interest is payable under section 217. Now, clearly, therefore, on the date of the default, there was no amount on which interest was payable under section 217 because according to sub-section (1) of section 217 interest payable in case of default of not filing return as required by section 212(3) is to commence from the 1st day of April next following the financial year in which advance tax was payable, and it is to run up the date of regular assessment. It is, therefore, clear to us that the basis of penalty, as prescribed under section 273(ii), being the amount on which interest is payable under section 217, the date with reference to which penalty is to be levied cannot be the date of default.

16. The next possible crucial date may be the 1st day of April next following the financial year in which advance tax was payable, because it is the amount on which the interest is payable under section 217 which has been made the basis of penalty. It can possibly be urged with force that since the amount on which interest can be levied under section 217 is the basis of penalty, the taxing authorities should consider that date as the crucial date from which the interest commences to run on the said amount. Undoubtedly, if that is the crucial date, the taxing authorities cannot look at or consider any events of payment which might have taken place subsequent to that date. We see great force in this possible contention about this possibility of the crucial date, viz., the 1st day of April next following the financial year in which advance tax was payable.

17. The third possibility about this crucial date is as contended by Mr. Shah, the learned advocate on behalf of the assessee-company. According to him, the amount which can be the basis of penalty is that amount on which interest is payable under section 217 and having regard to the provision contained in sub-section (1) of section 217, that amount is equal to 75% referred to in sub-section (1) of section 215. Now, section 215(1), as stated above, provides that if the advance tax paid is less than 25% of the tax determined on the basis of the regular assessment as reduced by the amount of tax deducted at source, the interest at the rate of 9% shall be levied on the amount by which the advance tax paid falls short of the said 75%. It was, therefore, contended on behalf of the assessee-company that 75% of the amount which has been made the basis of penalty under section 273(ii) is that 75% of the tax determined on the basis of the regular assessment as reduced by the amount of tax deducted at source. It was, therefore, strenuously urged that the only inference which is possible as regards this crucial date is the date of regular assessment when the tax is determined, since without determination of the tax on the basis of regular assessment, one cannot determine what is 75% of the said amount under section 215(1) which has been indirectly referred to in section 217(1) for purposes of making it a basis of penalty under section 273(ii). We are of the opinion that this interpretation urged by Mr. Shah on behalf of the assessee company is an equally possible and reasonable interpretation. The submission of Mr. Shah has a great force in it because the basis of penalty is the amount on which interest is payable. That amount is one which is prescribed under section 217. Section 217 speaks of 75% of the amount on which interest would be payable for the default in filing estimate of the advance tax. Now, this 75% according to section 215(1), is of the tax determined on the basis of regular assessment. It is, therefore, possible to contend reasonably that the crucial date on which the taxing authorities can determine the amount of penalty is the date when the tax is determined as a result of regular assessment. It that is the crucial date for purposes of determining what is the amount under section 217 on which interest is payable, the authorities must also look to sub-section (3) of section 217, which brings into play the provisions contained in sub-sections (2), (3) and (4) of section 215. If it is the correct interpretation of section 217 for purposes of determining the amount, which can be the basis of penalty under section 217(3), it was urged by Mr. Shah, then the tribunal was perfectly justified in considering all those events of payments of tax before the date of determination of tax as a result of regular assessment.

18. We are of the opinion that having regard to the scheme of section 273 as a whole where the penalty has been provided for commission of an overt Act in filing an untrue estimate with knowledge or with reason to believe that it is an untrue estimate, and also for the default in not furnishing the return within time, both the interpretations as to the crucial date as referred to hereinabove as possibilities Nos. 2 and 3 are reasonable and probable. Mr. Shah also submitted that, while determining the question of penalty for filing untrue estimate intentionally, the taxing authorities can give deductions of the tax paid while ascertaining what is 75% of the tax determined on the basis of regular assessment. In our opinion, it would be too harsh while computing the amount of penalty in respect of default of furnishing an estimate advance tax without any reasonable cause under section 273(b) that these deductions are held to be not permissible. The consequences for an overt act in filing an untrue estimate must be more serious than for the default of mere omission in filing an estimate within time without reasonable cause.

19. It was urged by Mr. Kaji, in the alternative, that if the crucial date is not the date of default then, on a combined reading of section 217(2) with section 217(1), the 1st day of April next following the financial year in which advance tax was payable should be considered the crucial date and no events of payments taking place thereafter can be considered by the taxing authorities, since according to section 273(ii) the basis of penalty is the amount on which interest is payable under section 217(1) and that amount is 75% of the tax determined on the basis of regular assessment, but none-the-less the interest commences to run from the 1st day of April next following the financial year in which advance tax was payable. In other words, he urged that, if the 1st day of April is the crucial date, the events of payments of tax taking place thereafter cannot be considered under any circumstances by the taxing authorities. We have stated earlier in this judgment that this second interpretation about the crucial date being the 1st day of April next following the financial year in which advance tax was payable, is also reasonable and possible, because the basis of penalty under section 273(ii) is the amount on which interest is payable, and that amount is to be determined as on the 1st day of April next following the financial year in which advance tax was payable. In view of these two possible and reasonable interpretations, it was urged by Mr. Shah, this court should take that interpretation which was more favourable to the assessee. In support of his contention, he relied on the decision of the Supreme Court in Commissioner of Income-tax v. Vegetable Products Ltd. where the court was concerned with the interpretation of the expression, 'the amount of tax, if any, payable by him'; in the earlier part of section 271(1)(a)(i) of the Income-tax Act, 1961, and whether it refers to tax payable under a notice of demand, for purposes of calculating the penalty for failure to file return of income within time without reasonable cause. On behalf of the revenue before the Supreme Court, it was contended that on a proper construction of section 271(1)(a)(i) it would mean that penalty had to be determined on the basis of the tax assessed under section 143 of the Act, as the other interpretation canvassed on behalf of the assessee would take away the effectiveness of the section as the assessee would avoid the consequences of penalty by paying tax a day before the demand notice was served on him. On behalf of the assessee, it was urged that on a true interpretation, the effect would be that penalty could be only imposed on the amount payable under section 156 and if the interpretation placed on behalf of the revenue on section 271(1)(a)(i) were accepted as correct, the result would be that the advance tax paid or taxes deducted at the source cannot be taken into consideration in determining the penalty payable; and that would result in an anomalous position that though the assessee might have paid all the taxes but if he has failed to submit the return in time, he would be liable to penalty. The court appreciated the reasonableness of both the interpretations and held that the meaning which is more favourable to the assessee should be preferred. It held that if the court finds that the language of a taxing provision is ambiguous or capable of more meanings than one, then the court has to adopt that interpretation which favours the assessee, more particularly so where the provision relates to the imposition of a penalty.

20. We are of the opinion that the first interpretation as to the crucial date as canvassed by the revenue is clearly not tenable because the legislature in that case would have said that penalty shall not be less than 10% but shall not exceed one and a half times of 75% of the tax payable. Instead of saying it in clear terms, as it would be expected of the legislature because it was providing for a penalty, it said that the Income-tax Officer shall direct the assessee to pay amount which is not less than 10% but not exceeding one and a half times of the amount on which interest is payable under section 217, which in turn provided the payment of interest on the amount of 75% as referred to in section 215(1), which linked it with the tax actually determined on the basis of regular assessment. By the Taxation Laws (Amendment) Act, 1970, which has come into force from the 1st day of April, 1971, the position has been clarified in section 273(b) read with section 273(ii), where it has been provided that the Income-tax Officer may direct a person to pay in addition to the amount of tax, a sum by way of a penalty, 'which in the case referred to in clause (b) shall not be less than 10% but shall not exceed one and a half times of the 75% of the assessed tax as defined in sub-section (5) of section 275'. We are, therefore, fortified in the view which we are taking in this matter that the contention urged on behalf of the revenue as to the date of default being the crucial date for purposes of determining penalty is not sustainable in view of the scheme contained in section 273 read with sections 217 and 215 of the Act of 1961. Out of the two interpretations to which we have referred hereinabove, as to the crucial date being reasonable and probable, we would prefer the third interpretation which is more favourable to the assessee and, therefore, for the reasons stated in this judgment, we are of the opinion that the view of the Tribunal that the assessee was entitled to claim a deduction of the payment of tax of Rs. 1,83,000 made on 26th March, 1965, was correct. In that view of the matter, therefore, we answer the question referred to us in the negative against the revenue. The Commissioner shall pay costs of this reference to the assessee-company.

21. Question answered in the negative.


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