Law: Income-tax Act (XI of 1922)

Section: Ss. 3, 7 & 18 (2)

Income-tax Act (XI of 1922), Ss. 3, 7 & 18 (2) -Finance Act, 1957, S. 17 (3) Third Schedule, proviso-Person chargeable under head "Salaries"-Not liable to pay tax if his "total income" does not exceed taxable limit laid in Finance Act applicable to relevant assessment year-Deduction of tax made at source as per previous Finance Act, immaterial Interpretation-Liability to tax-No discrimination between salaried and non-salaried assessees.   The assessee, an officer of the Government, received Rs. 4,581 as his salary during the Financial year 1956-57. Out of his monthly salary, deductions of tax at source were made at the rates laid down in the Finance Act, 1956. The Government in the Finance Act, 1957, raised the taxable limit from Rs. 4,200 to Rs. 5,000. On this change, the assessee claimed that since his `total income' did not exceed Rs. 5,000, he was not liable to be taxed under the Finance, Act, 1957.   Both the Appellate Assistant Commissioner and Appellate Tribunal, agreed with the assessee. On further reference made at the instance of Department.   Held, that the assessee was not liable to pay any income -tax for the Financial year 1955-57. Subsection (3) of section 17 of the Finance Act, 1957, is only applicable to those cases where the assessee himself Is chargeable to income-tax under section 17 of the Finance Act of 1957. If he is not chargeable, there is no scope for application of subsection (3) of section 17 of the Finance Act of 1957. The reference to the Finance Act, 1956, is only for the purpose of calculation of income-tax on the salaried portion of the total income a and in doing so it may be on the basis of the exemption amount of Rs. 4,200, provided his total income is chargeable, i.e., exceeding Rs. 5,000.   1960 P T D (Trib.) 201 affirmed. JUDGMENT   I. H. CHOWDHURY, C. J.-This reference under section 66 (1) of the Income-tax Act, 1922 is at the instance of the Commis sioner of Income-tax, East Pakistan, Dacca, for the opinion of the High Court on the question of law formulated by the Appellate Tribunal, Dacca, which runs as follows:   "Whether salary income of the assessee…