Law: Business Profits Tax Act, 1947

Section: -S. 14 read with S. 11-S. 14

(On appeal from the judgement and order of the High Court of East Pakistan, Dacca, dated the 27th August, 1959, in Reference Case No. 11 of 1959).   (a) Interpretation of Statutes-----   ----Particular section -True intent more likely to be discovered by reading whole Act than from the words only of section.   (b) Interpretation of Statute-----   ----Taxing statute-Two equally reasonable constructions -Construction favourable to subject to be preferred.   (c) Business Profits Tax Act (XXI of 1947)-----   ---S. 14 read with S. 11-S. 14 not confined to eases in which assessment has in fact been initiated but income has "escaped assessment" for some reason or otherLimitation of 4 years for assessment or reassessment applies to every case-"Escaped assessment"-Explained.   Held, that the words "escaped assessment" tin section 14 Business: Profits Tax Act, 1947, do not refer only to a case where assessment had in` fact been initiated but for some reason or other no tax was levied, although the tax was leviable.   To hold otherwise would produce the anomalous result that whilst a dishonest assessee would be protected from harass ment after the lapse of four years, an honest assessee would remain exposed to the harassment for even 10 or 50 years. It is difficult to impute such an iniquitous intention to the Legislature.   Such a reading of section 14 also appears to be in consonance with the interpretation which the words "escaped assessment" in section 34 of the Income-tax Act, 1922, have received hitherto fore. These words have never been held to be restricted to only cases which have escaped assessment after the initiation of, proceedings for assessment.   Under section 11 of the Business Profits Tax Act, 1947 the return has necessarily to be in respect of profits made during a chargeable accounting period and, therefore, the notice calling for such a return should ordinarily be issued within a reasonable period after the termination thereof and this reasonable period should not extend beyond the period specified in section 14.   The scheme of the Act is not altogether…