IN RE: THE POPULATION COUNCIL INC. Vs. STATE

JUDGEMENT

(1.) THIS is an application under Section 245Q(1) of the IT Act, 1961 (for short "the Act"). The applicant, 'The Population Council, Inc., USA is a non -resident. It was founded in 1952 and was incorporated under the New York Membership Corporation Law. It is a resident of USA. It is an international non -profit, non -Governmental organization. The objects of the applicant include the following:

(2.) THE jurisdictional CIT (for short "the CIT) submitted the following comments to the application:

(3.) MR . Manohar Lal, learned Counsel for the applicant, gave up the submission made in the application on the basis of the provisions of DTAA and has confined his contentions to the interpretations of Section 115WA of the Act. The learned Counsel concedes that FBT is chargeable in addition to the income -tax as is evident from Sub -section (1) of Section 115WA of the Act; the FBT is the liability of the employer and that the value of fringe benefits is only the measure to compute his additional tax liability. However, he argues that if a person is not charged to income -tax, there can be no additional tax liability calculated on fringe benefits but this is subject to the exception contained in Sub -section (2) of Section 115WA of the Act which does not apply to the applicant. The words used in Sub -section (2) of Section 115WA of the Act, namely, "on his total income computed in the accordance with the provisions of this Act", contends Mr. Manohar Lai, are of great significance and restrict the scope of Sub -section (2) of Section 115WA of the Act. They apply to a case where the employer has total income, which is required to be computed in accordance with the provisions of the Act, Where there is no income of a non -resident within the meaning of Sub -section (2) of Section 5 of the Act, the question of computation of total income would not arise and to such a case the exception in Sub -section (2) of Section 115WA of the Act would not apply; if the Sub -section is given the same meaning with or without the words quoted above, they would become meaningless. Summing up he submits that as in the case of the applicant the computation machinery cannot be pressed into service, Sub -section (2) of Section 115WA of the Act would not be attracted and therefore the charge under Sub -section (1) of Section 115WA would fail.