COMMISSIONER OF INCOME TAX Vs. BATOOL BEGUM SMT

JUDGEMENT

(1.) THE following question has been referred to this court for decision at the instance of the Commissioner of Income-tax under Section 256(1) of the Income-tax Act, 1961 :

(2.) THE facts culminating in this reference are these : THE assessee is one Smt. Batool Begum. She was assessed through the trustees of the Nizam's Supplemental Family Trust on the income from dividends in respect of certain shares in some companies. THE shares were all held in the name of Shri C. B. Taraporewala, the executive officer of the trust. THE Income-tax Officer did not give credit for the tax deducted at source on the ground that Rule 30A of the Income-tax Rules does not cover the case. But on appeal, the Appellate Assistant Commissioner upheld the assessee's claim and directed the Income-tax Officer to give credit to the extent of the amount of tax deducted at source on the dividend income. THE department then unsuccessfully preferred an appeal to the Tribunal. THE Tribunal followed its earlier order in I.T.A. No. 589/Hyd/1969-70 dated March 28, 1972, and held that Rule 30A is applicable and the assessee is entitled to the credit asked for in respect of the amount of tax deducted at source. THE Commissioner then moved the Tribunal for reference and that is how the matter is before us.

(3.) SECTION 199 of the 1961 Act is in these terms :