Law:

Section:

Section 2(9) of the companies (profits) surtax act, 1964 read with section 2(17) of the income-tax act, 1961-Company-Definition of-Whether provisions of the surtax act apply to non-resident companies-Held, yes-whether by force of section 2(9) expression "company" occurring in its charging section and other sections has the same meaning as in section 2(17) of the income-tax act-Held, yes Facts For the assessment years 1965-66 and 1966-67, the ITO had assessed the assessee, a nonresident shipping company incorporated in Sweden, on its profits under the Surtax Act. On appeal, the assessee contended that it was not a company within the meaning of the charging section of the Surtax Act and, hence, the levy of surtax under that Act upon it was illegal. The AAC held that the assessee-company was a company within the meaning of the Income-tax Act and that by force of section 2(9) of the Surtax Act, the provisions of the Surtax Act applied to an assessee which was a company within the meaning of the Income-tax Act. Accordingly, the AAC upheld the ITO's order. On second appeal, the Tribunal observed (i ) that from the fact that the Surtax Act contained no definition of company, it did not follow that the said Act had no application to non-resident companies ; (ii) that even if it was accepted that section 2(9) of the Surtax Act did not have the effect of making the definition of "company" as given in the Income-tax Act applicable to the provisions of the former Act, according to the principles of interpretation of statutes, the expression "company" occurring in the charging section and other provisions of the Surtax Act, must be understood in the sense in which it was understood in common parlance and also in legal parlance; and (iii ) that the word "company", in common and legal parlance, means all incorporated companies, no matter whether they were incorporated in this country or in a foreign country. Accordingly, the Tribunal held that the provisions of the Surtax Act had application to non-resident companies, of which the assessee-company was one. On reference : Held The expression "company", as understood in the ordinary parlance and also in legal parlance, took in…

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