COMMISSIONER OF INCOME TAX Vs. HINDUSTAN TELEPRINTERS LIMITED

JUDGEMENT

(1.) THIS reference, relatable to the assessment year 1972-73 concerning the assessee, Hindustan Teleprinters Ltd., Madras, raises two questions of law for our opinion, as below :

(2.) ON appeal, the Commissioner of Income-tax (Appeals-II), Madras 34, held that the tax credit certificate was not an income at all and hence there was no question of it being part of the total income so as to require the recomputation of the capital on the ground that it was exempt from income-tax. Thus, on the ground that there was no escapement, the Commissioner of Income-tax (Appeals-II) cancelled the assessment without entering into the question whether the reassessment was otherwise properly initiated.

(3.) THE section contained the methodology for computing surtax on every company. Such surtax shall be charged on every company for every assessmerit year commencing on and from the 1st day of April, 1964. "Charge able profits" of the previous year, and "statutory deduction" have to be worked out and the "chargeable profits" exceeding "statutory deduction" are chargeable to tax, at the rate or rates specified in the Third Schedule. "Chargeable profits" and "statutory deduction" have been respectively defined under Clauses (5) and (8) of Section 2 of the Surtax Act. THE charging Section 4 thereof which is of paramount importance to note, starts with the phraseology "subject to the provisions contained in this Act". Clauses (5) and (8) of Section 2 of the Surtax Act reads as under :