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JUDGMENT Chagla, C.J.,-This reference raises a very short question. The assessee is a private limited company which was incorporated on the 25th March, 1954, and the assessment year with which we are concerned is the assessment year 1955-56 and the relevant year of account is the year ending 31st March, 1955. On the 13th July, 1955, the assessee company declared a dividend of Rs. 11,712. The assessee company declared a further dividend of Rs. 5,612 within the time permissible to it under section 23A which brought the dividend declared to the statutory requirement of 60 per cent. of its income. The assessment of the company was made on the 30th January, 1956, and the company claimed a rebate of one anna per rupee on the undistributed balance of the profits as provided in clause (i) of the proviso to item B of Part I of the First Schedule to the Finance Act, 1955. This rebate was disallowed both by the Income-tax Officer and the Appellate Assistant Commissioner, but was allowed by the Tribunal and the question has now come before us on this reference, and what calls for our decision is the interpretation of really one short expression in this provision in the Finance Act. The provision is in the following words : "Where the total income, as reduced by seven annas in the rupee and by the amount, if any, exempt from income-tax, exceeds the amount of any dividends (including dividends payable at a fixed rate) declared in respect of the whole or part of the previous year for the assessment for the year ending en the 31st day of March, 1956, and the company is a company to which the provisions of section 23A of the Income-tax Act cannot be made applicable, a rebate shall be allowed at the rate of one anna per rupee on the amount of such excess." Now, it is not disputed by the Department that all the conditions-laid down in this provision have been satisfied and the assessee is. entitled to the rebate of one anna, except according to the Department for one condition and that condition is that the company is a company to which the provisions of section 23A of the Income-tax Act cannot be made applicable. It is urged that in fact the provisions of section 23A are…

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