Law: Income Tax Act, 1922

Section: 23, 3, 4, 23-A, 67-B

Wealth tax---Provision for payment of additional super tax under S. 23-A, Indian Income-tax Act, 1922-No order under S. 23-A before valuation date - Whether allowable as "debt owed"-Liability to additional tax under S. 23-A How arises-Liability to tax disputed in appeal-Disposal of appeal and payment of tax-Disallowance by Tribunal-Amend ment of Law - Disputed tax allowable under amended law No occasion for Tribunal to consider amendment-Question of allowability-Whether arises out of order of Tribunal-Provision for rectification available-Proper remedy-Indian Income-tax Act, 1922, Ss. 3, 4, 23-A, 67-B-Wealth Tax Act, 195?, Ss. 2(m), 35 Wealth Tax (Amendment) Act, 1964, S. 32. The structure of section 23-A and the manner in which the liability to additional super tax arises thereunder leave no room for doubt that the liability is not charged automatically by statutory force but arises only from an order of the Income-tax Officer which he will make only after consideration of and decision on various factual factors to be found with him. Hence, provision made for tax payable under section 23-A, where no order under that section had been passed before the valuation date, is not an allowable deduction in the computation of the net wealth. M. M. Parikh, Income-tax Officer v. Navanagar Transport and industries Ltd. (1967) 63 I T R 663 (S C) applied. The departmental authorities and the Tribunal declined to treat the balance of the tax payable for the year ending December 31, 1954, as a debt owed in the assessment to wealth tax for 1959-60 on the view that the assessment had not become final by reason of an appeal in respect of that amount before the Appellate Assistant Commissioner. As the appeal had since beep disposed of and the tax paid before the valuation date for that year, the assessee claimed deduction thereof by means of the rectification provisions. The departmental representative objected to this on the ground that, as the amendment in 1964, came subsequent to the order of the Tribunal, it had no occasion to consider this aspect and, hence, the question did not arise out of its order. The High Court, however, held that, though the 'tribunal…