Law:

Section:

Para D of Part I of the Schedule I to the Finance Act, 1964 - Rates of tax - Companies - Petitioner, non-resident company, received dividends from an Indian company B which was not a company in which the public were substantially interested - B Was engaged in manufacture or production of mineral oil - Whether petitioner was entitled to rebate in accordance with proviso to Paragraph D of Part I of the First Schedule to the Finance Act, 1964 in respect of such dividends received by it - Held, yes Facts The petitioner, a non-resident company, was charged tax in respect of dividend income received by it from an Indian company B at the rate of 25 per cent without allowing any rebate in accordance with the proviso to Paragraph D of Part I of the First Schedule to the Finance Act, 1964. Company B, in its own assessment had been treated as a company in which the public were not substantially interested within the meaning of section 2(18). The order of the ITO was confirmed by the AAC. However, he held that the business carried on by company B could be attributed to the business of manufacture and production of mineral oil and, accordingly, it was eligible for the higher rebate of tax under the Finance Act, 1984 provided other conditions specified in that behalf in the relevant schedule were fulfilled. No appeal against the order of the AAC was filed by company B or by the ITO. Meanwhile, the petitioner made an application before the ITO under section 237 claiming certain refund of excess tax paid. The ITO, however, held that as the refund claimed by the petitioner arose only because of lower rate of tax applicable as a result of the decision in the case of B, the claim could not be entertained under section 237. On appeal, the petitioner contended (i) that B in its own assessment had been treated as a company in which the public were not substantially interested within the meaning of section 2(18), (ii) that B was engaged in the business of manufacture and production of petroleum products which is a mineral oil appearing in the list specified in Part IV of the First Schedule, and (iii) that B from which the dividend income was received was a company to which section…

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