BHARAT AND CO Vs. CIT

JUDGEMENT

(1.) The Income Tax Appellate Tribunal has drawn up a statement of the case and referred the following question to this Court acting under S.66 (1) of the Indian Income Tax Act, 1922:-

(2.) The order of the Income Tax Appellate Tribunal dealt with a series of appeals pertaining to the assessment years 1125 M.E. and 1950-51 to 1954-55. The assessee had adjusted in each of the years in its books amounts as interest due to persons not resident in the taxable territories. These amounts were added back by the assessing authority in each of those years and the assessments were made by including the above sums. The assessment for the first of those years was under the Travancore Income Tax Act, 1121 M.E., and those for the subsequent years 1950-51 to 1954-55 were in accordance with the provisions of the Indian Income Tax Act, 1922.

(3.) Thereafter the Income Tax Officer issued demand notices under S.29 of the Indian Income Tax Act claiming tax on the various amounts adjusted towards interest in each of those years. Appeals from such demands were taken by the assessee before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner by his order dated 22-11-1957 directed the Income Tax Officer to make certain enquiries and to pass appropriate orders in the light of the conclusions reached after such enquiry. The Department appealed before the Income Tax Appellate Tribunal and it was contended that the Appellate Assistant Commissioner erred in entertaining the appeals against levy of tax under S.18 (3B) of the Indian Income Tax Act on the ground that an appeal to the Appellate Assistant Commissioner under S.30 (1A) lies only if the disputed tax under S.18 (3B) has been paid. The above sections were quoted in the appeals relating to the assessment years 1950-51 to 1954-55 and the corresponding S.22 (4) & (5) and S.43 (2) of the Travancore-Income Tax Act, 1121 M.E. were relied on in the appeal from the assessment for the year 1125 M.E. The Tribunal by its order dated