COMMISSIONER OF INCOME TAX Vs. EXPRESS NEWSPAPERS LIMITED

JUDGEMENT

(1.) The respondent is a Public Limited Company which is running a well known newspaper The Indian Express and we are concerned in this case with a income tax for Assessment Year 1964-65.

(2.) On 6/12/1962 the Board of Directors of the respondent-company passed a resolution whereby it decided that interim dividend should be distributed amongst the shareholders. The resolution further provided that this dividend would be payable on 16/1/1963. It may here be noticed that the accounting year of the respondent-Company is the calendar year. The resolution which was passed on 6/12/1962, therefore, was in the previous year relevant to the Assessment Year 1963-64 whereby the payment was made to the shareholders in the following year relevant to the Assessment Year 1964-65.

(3.) In determining the amount of tax which was payable by the Company for the Assessment Year 1964-65 the Income Tax Officer came to the conclusion that the rebate which was available to the Company under the Finance Act, 1964 had to be reduced to the extent of the interim dividend paid to its shareholders in January 1963. The claim of the respondent, in the appeal filed by it, was that the Board of Directors had declared the dividend on 6/12/1962, i. e. , before the start of the relevant previous year and the payment was made in the subsequent previous year and, therefore, by virtue of Explanation 3 to the first proviso of the Finance Act, 1964 the rebate could not be reduced. Having failed to get any relief from the appellate authorities, a question of law with regard to this aspect was referred to the High court by the tribunal. Two other questions were also referred but we are not concerned with those in the present case and answers to them stand concluded by the judgment of the High court.