Law: Income Tax Act, 1922

Section: 4A(c),4(1)(b)(ii)

(a) Interpretation of Statutes-----Abrogation of International Law; or extra territorial operation of a statute not to be supposed unless language of statute clearly leads to that result.Statutes are not to be construed as abrogating International Law unless their language clearly leads to that result, and that extra-territorial operation of a statute over foreigners is not to be presumed as having been intended unless it is expressly so stated.Crates on Statute Law (1952 Edition) p. 436.(b) Income-tax Act (XI of 1922)------ S. 4A(c)-Registered office of Company throughout previous year (1947-48) in Calcutta outside Pakistan-Company not resident within meaning of S. 4 A (c).The appellant was the Imperial Tobacco Company of India, Limited, which was assessed to income-tax as a "resident" by an Income-tax Officer in Pakistan. The assessment was for the year 1948-49 for which the previous year was the financial year 1947-48. The registered office of the Company and therefore the control and management of its affairs throughout the previous year was in Calcutta, though the company carried on some business in Pakistan in that year.Held, that the assessee company was not resident within the meaning of section 4 A (c) of the Income-Tax Act as to be taxed by the Pakistan Income-tax authorities under section 4 (1) (b) (ii).If a foreigner earns or receives income in Pakistan, that income alone is liable to Income-tax and not the income earned by him in the country of his origin or elsewhere outside Pakistan. This result follows literally from the application of the definition of "British India" to section 4 A (c). What is not to be overlooked and must prominently be borne in mind is that the previous year in the present case is the financial year beginning with 1st April 1947 and ending with 31st March 1948. This year is split up in two periods; the first period extending up to and including 14th August 1947, and the second commencing from the 15th August 1947, and ending on 31st March 1948. The definition of "British India" merely means this that whenever the point. of time mentioned in the Act is before the 15th August 1947, the territory referred to at that time is…