PAUL A C Vs. TAX RECOVERY OFFICER

JUDGEMENT

(1.) THE petition is mainly concerned with the interpretation to be placed on Sub-section (7) of Section 220 read with the Explanation to that section of the I.T. Act, 1961 (hereinafter called "the Act"). Certain other points had also been argued at the time of the hearing of the case. One of such points was that Circular No. 25 dated July 25, 1969 (See [1969] 73 ITR (St.) 23) issued by the CBDT should be quashed as discriminative and violative of Article 14 of the Constitution or that the same concession that had been granted to assessees who had income arising or accruing in Pakistan must be extended to the writ petitioner. THE other points urged, we do not consider that we should pronounce upon in this judgment. We shall now refer to certain essential facts for disposing of the main question as well as the reasoning based on Article 14 of the Constitution of India. THE petitioner-assessee seems to be a very enterprising person who left the country early in life and who established a fairly successful business at Colombo in Ceylon. He had considerable income accruing or arising from his business in Colombo. He had also income accruing to him in India. Statements have been filed which are in the typed set of papers showing Indian income as a percentage of total world income as assessed in India. This is at p. 1 of the typed set of papers. From this, it is seen that from the year 1951-52 onwards, the writ petitioner had been assessed to income-tax on considerably large amounts and that the percentage of Indian income to total world income ranged from 2.48 to 11.57 for the years-which have been referred to therein. THE circular to which we adverted categorically stated thus :

(2.) ADMITTEDLY, as is clear from what we have already stated, the income arising in India and that which had accrued or arisen in Ceylon varied to such an extent that it may be stated that the income arising in India was comparatively negligible.

(3.) SECTION 2(45) defines "total income" in these terms: