Laxmipat Singhania v. Commissioner Of Income-Tax, U.p

aaaqa_ faayaton TATA MI MIE, SAC ALT (Laxmipat SinghaniaVersus The Commissioner of Income-tax, U. P.) (30 sya, 1968) (Fate So ee Me, Ao TaVeTA Bz co aa AIaz) gan graYee (1922 ar11), ger 23¢—aaae|sftez gt ae sea fener fe apeady kal St atseat & ae frafte aaa sie—aghaa ad % fae safearattal at sa a fate Rafa amt af na akafaa|walTEM aT: TeaT H sigeifwat a afea stS|T3—THA GA ATH fe safez siqahaiha~s a aa & frat¢ F°aftataa a me—aa ag agga B ?|—adlardf ae Oe saat sr-sigat) 2 faae geaq Seq Rez, 1922 aAT 23 F qalana ‘waaraaBT B Rageal a 1 29 aga, 1939Bo oe TTY ates F areal Ia ys ay a} fate Arq aHR saag & mane site afrat a WH FET TAG BIS Taga aig Aga ae ——Bl eal | TT 23 (1)ada st wa St MIR featale18 qaray, 1940 ae wee a ae mea Rafe age an maT fHayfase ue sth & araq alte st ania a asa & sigqaifedt ®.aa araig % 88 H fafia sak 2| 12 fears, 1941 St snag afeac afaa fae sigrartdl & sig naatita fie farce fauiaq aq 1940-41 8AUT $ aatee: fratealt F afta ard af sna & aazatts sgt &|altafaadae ae fear 24 B0e, 1942 st agra} 2 mang siggy ag Tita fer fae naat sefghaal (reserves) 1 Sa vi sigrarfiat aTlearty% et Bat he aa sa waa ee us aT % atasa 4 St seer Reay aay we aka fea) BhLy y|~Y aera frais qa atzEt sree, SAT TAT [Fate ME] 595 fratty ay 1943-44 % faa aden st ma & fale st erateH maar sisat 2 ada Wy fata ate cael waraar wea We TH as FTBUTT THA BH SIA BT AMAT 1 fazer ata oe fina, aarq ae ssa aaa ae wfifaalitafear fe faafta anuat wage faaleq ag 1940-41et amaSt anatafeeq aaa: saa at fata a aAatfaafta waaadharet sr sy frateq af 1943-44 F falta fac at ar ard ars Ea -qaaa T ANeg Bea az,afufaatva— 94 miaat sifmex a 23¢ (1)aaa AE weeRar faa ae aA Sa 2 fH AMT Bea Haga et ade A serait& ala faafta ac fear may 21 are 16 (2) ae aT 4 (1) (MF ara afaafta aaat art aralt aria wa aay asaya B ade a sigrafal ASa wa 4 afalea faa aa aa?| aaa F wfasqe o¢ a sazaxsufsac s} ag cata fear mar? fH ae sa ga an 4, faa aay afiagaal ade mat 2, sigaid at gama a ag cam aftafea wee gt aaa aalanis aig at aafaa faley ag fo at aT afe aa fratiedt et Maya ge 2 sleaze feel fafge ad a Se oma4 aftufaa fe art at areal 2 it oat ofhat sa Meza gs ona at stavet at agar att aC aaa oife B aa at feet wa as Ml aT FH wTHa Wl st GAT Asal 2 TT 230(4) 3 maa aifhar wt ag freer al fear aay 2 f ae azat faafta eam at sige st mag ee sat ce St ame fH ae TPT28R (1) Balla Baia fig ore at order MY Megya gee aT IE a sealsBTW TT 23 (4) F wela sy wt areafes ale at ade HY at aT |ga sot H aa ale feel aif2 a QI (1) F sea Hat mez Fzghaymeaead fata aah ae aia & safes sie ar ae dea He fear? atsa ania er aafta Raw at aaa ad dar| aa sag HY, at as GIHA RW Aet Bata H, cH ae fraa ama as mse ae gad aeqnafas ofa a, fafa azar 2, el wafiafea 4 daftafoa adl Par aanal fad fa af feat anqay sa aa asa as H Ht adl aA aTwer el faaat ® saa fafa au aficas oa 8 frag sear atfga aat nila %.aaa ae amar aT aR| fafa sitet stfraifiar: 1967 ay qo 1188 ara fafaa acta| 1963 % do 250 Ta aalQ mast Regt ear sea Tae% ale 28 fuaraz, 1962 are faa ate fem 4 faa Vag adie| arnfiralt a1e— sage fina wuea Re ues eral fafate ce Bel seat? faadgina ama qe gfteqq xema tga daz, 1922 8 wT 23E % wajearia(aaa BAL STB fara? aval A | 22 aT |, 1939 F Hegel SOF AITafiiga gar fad seal waa gg at al fateq aa oa8 seas 3HART AT Hae Hl THA IT[Ht][ TAH!][ als][ afaga][ ate][ Tiss][ sel][ HT][ Tal]|mast wieat a sfieay gong tga Tae et(GA fH ae sa WAT aa AT)ae 23m % seals aie st qatar Sd ST aida 18 aaraz, 1940 qa wee2 ae m2 fear fe ae war!TM fe 332,691 eat A HA araal F BARTafraaa a aia St sigaifiat & ala fealta at nf 3)12 feavaz, 1941al aat mifat F sa at sigaiftalS fat aa feats ge aawat at, sir waite aa fara agfaa faaieg at 4 sigraiftat 3 sale:frategt F faafta aaa af oral was mats sat a aftaiaaSS sa mee RMsaragie al fear)24 se, 1942 a sea 2arany fata FH ae dace oifta fear fe mefyleFF 2,98,000 aadsigahatat ae ae ate cae sera} aad a sat se AAT ATfan aiai sa daca & aqawy § ava 4, feat va ca eal %1,333 ax a ala F 23,328 ead gar ae fe aT | LAXMIPAT SINGllANIA COM.'\IISSl01''ER (>I' INCOME-TAX, U.P. August 30, 1968 fJ. C. SHAH, V. RAMASWAM! A~D A. N. GROVER, JJ.) lnconzc-ta.x Act (11 of 1922), s. 28A---Ord£'r by Jnco,ne-tax Officer that inconie of conzpany deen1ed to be distributed a111ong slu:rcho/ders -Asses.nnent of inconie of individual shareho/cfers for appropriate year-/Jeenzed inco111e not included-A mount actually distributed to shareholders in later year-An1ount included in csses.fnrent of inco111c of individual slU1re/ioldcrs for that year-If permissible. lbc appellant was a 5hareholder in a company in which 'the pub'io v;cre not suhstanrially interested' \li'ithin lhe meaning of s. 23A of the Income-tax • .\ct, 1922. At the company's gert.:ral meeting held on April 22, 1939, the con1pany failed to declare dividend to lhc extent of 60'}& of it'i a'\s.cssable income of its pNvious year as reduced hy the amount of income-tax and super-tax payahlc in rc'ipect thereof. By order dated November 18, 1940 the Income-tax Officer, acting under !-.. 2~A( 1). ordered that a certain sum shall be deemed to have hcen distributed a'\ dividend amongst the shareholders of the company as at the date of its general meeting. On December 12, 1941 the Income-tax ()fficcr dclcr-minc<l the shares of the different shareholders but did not include the proportionate shares of the deemed income in the individual ;:1s.'\es-.ments Of the shareholders for the asscs.<ment year 1940-41. On April 24, 1942. the company in a general meeting resolved to make a pa'rt of its rcscrve available as dividend to the shareholders and actually distributed the amount by crediting the acrount of each shareholder v.·ith his respective share therein. In proceedings for as<ies:.mcnt of the income of the appt·l-lant for the assessment year 1943-44, the Incoine-tax Officer brought to tax the amount distributed and credited to the appellant, as amount liable to be taxed in that year. the ~eo~~f~":n':~· t~ri~u~~~rri~~t~e c~~ ~~r~~~ ~~~f~~·t~:l~<>st~~~ ment year 19404 I. but not having been assessed to rax in that year the appellant's shar-: in the amount actually distributed \Vas liahle to be asses_<;;ed in the assessment year 1943-44. In appeal to this Court, HELD: \Vhcn the Income-tax Officer makes an order under s. 23A( I). the dividend is deemed to he dislribute~ :-imong:st the "harcholders as at rhe date of the !!Cner~il meeting. By v1r1ue of ss. 16(2) and 4(1)(b), the deemed dividend income i<> liahlc to he included in the total income of the shareholder<> on the date of the- general meeting. l"hc section expre<;;sly enjoin.; the Income-tax Officer to. bring the proportionate share of evcrv shareholder lo tax in tho appropn;ite year of assessment by including ·the amonnt in the total income of the. shareholder ~f the previous year in \Vhich the da~e. of the general rncel1ng f;1lls. It 1s nc:>t open to the Income-lax Officer, 1f .income ha<; accrl~ed to the asseo;~ec, <tnd JS liable to be included in the total 1ncon1c of a particular year, to 1gnon~ t~c accrual and thereafter 10 tax it as income of another year on the basis of receipt. [907 C-D; 908 A-B, DJ L. SINGHANIA V. C. I. T. (Shah, J.) 1943-44 af &faaaderit A sa &frateq at sraareal% maecsufmae2seat ar atawea x scam Rar weshat si za edie at aeae at fea f caq sa as FY aud aed Amat aa wsaey A saat githac % sea J aay aenfa qs wT |AW UAghteaar Had H en fra era eae Oaz, 1922 sea eararaa sy sar 66 fafes (1) fear &aatda at— farafafad Cer fa maa Ss acal ae ofiafeal F 23,328 eat arateqi, HR frafeq ay 1943-44 Bt Hear saat % ctor fraifed &a@la # sar we fear aa at, KeRA eta Daz F aT 16 3% sqTaUe (2) A|\\2wvr a‘y| 4/ y oex. aeatea fasta gaia saat BAe, SAC Tee [Fare ag] 597. > adie at ama at aeat[2] aa[ aeda][ Fe][ cee] ae fee& may § 12 feara, 1941 M fraleq at 1939-40 & faa eieesageen tga daz at au 230% wir gee a ae mietg2 feamat at ¢” azq aay 2 AEs ova sr aaAH sat fear| Sa AATAT I TAIYIAMat ga mite F feea ca eae H aha aad 2 adieet et agar 2 fe Galea ean ak wea TD[saer][ malas][ AT]frateq af 1940-41 4 aude a; san at wear et fe fafa aah maHac fralfia adt fear wat ar gafaq aeaa: afta waa a ada et aeami qt 1940-41 af H sc amar ar aaa wed ZH sa asfativg as 1943-44 § ateq ar etal at|" Ges EF Had Soa MY Saal gens aaa ae aA a 23gFag svafaa a—|-_ (1) Where the Income-tax Officer is satisfiedthat in respectof any previous year the.profits andgains distributed as dividends by any company upto the endof thesixth month, after its accountsforthat previous year are laid before the companyingeneral meeting are less than sixty per cent of theyear, as reduced by the amount of income-tax andsuper-taxassessable payable income by of the the company company ofin respect that previous thereofhe shall,x x xmake x x x an order in writing that afeedi Hag ca cait a asa e— |1) set mat siete St aarsia a star Oh feet oa aea aaaar wt afsar feel sera S aaq saz aA aeRTafiaga Hosa ge adgah Far w aa ¥ ava ge ala atamit aa an ead a fa mast aig % so 4 fafa ferae %, 3 ga Gs ay Bl aaa BTA ara Fa mraKE AMT AAT Fl THAgag ma ac ah ga as at areal Strate ara oa F ars faa aane ael xxx ag ag fafaa mae tar fe araae at See ae fratey Ara na &, Gal ae wane } oat & fae dafya at af2 ale seat ar saat aaa 2a maa ateatiex A wR gat F aah aa aw aa 2, aftafaua a [1969] 1 eaofieqs the undistributed portionof the assessable incomeof the company of that previous year as computedfor income-tax purposes and reduced by the amountof income-tax and super-tax payable by the companyin respect thereof shall bedeemed to havebeendistributed as dividendsamongst the shareholdersas at the date of the general meetingaforesaid, andthereupon the proportionate share thereofof eachshareholder shall beincluded in the total income ofsuch shareholderfor the purpose| ofassessing histotal income. wei wast sitet ae 23a (1) are fafea egetFH ead&® fezmeg fa aa agama Har? fe aig aay aaga A adamtfed seraiftal & ala frata ae fear nar ds) ae Bary quae areata@ a 23a F wala afeae goed ae mas amar St aEamee fear nae fe ag a aga & smgufae sig a eatia RraieqastfiaHat ame | aay wags st ade & ae ada azar alat 2 ata et aigakal dq amis faafta fear nar am amar 2 lzmarae sis BY et ae tiga at sa ade Ta qa aq a) GATaa 4 afiatea fear saa| ieee aaa wag staat stl aed He fear aa afer| aT16 (2) #, wet ae ag artes 2, ae raftaa 3— e“For the purposesofinclusioninthe totalincome of an assessee any dividendshall be deemedto be income of the previous year in which it is paid, aaa ae aaa aa f& ag gate Marq wags a ada asual & amin % et 8 fates at far aad a eaemrad sr sad A manes wee aeaga H amyge satafae ahafaa ax fa sam fe saat ase aa afaaley feat at a>| «feet Fatal et sanaafew fer a Bastsfag feat arate % at Fae ama sem fae saga as sl aa weaiva fanfaar ar Bast SAR, SAC TI (rato ee] 599 _ pai,credited credite ord oristributed distributed or deemed to him. to have beenxxxx? eiteaq gran 2gq daz, 1922 stay 4 (1) (M) F, eet ae aeafere 2, ae saaftaa 3— «“(1) Subject to the provisions of this Act, thetotal income of any previous year of anypersonincludes all income, profits and gains from whateversource derived, which (a)xKXx A Section 23A(4) does not confer any option on the Income-I.ax Office.r to tax either the deemed income of the shareholder on the footing that it has accrued at th-e da\e of distribution under s. 23A(l) or the actual income at the date of actual receipt of the share, under s. 23A(4). Under the sub-section, if tax is paid by an assessee in respect of the proportionate share in the dividend deen1ed to be distributed in consequenoe of an order under s. 23A(l), any actual distribution of that dividend. wiU not be liable to b·o taxed. A provision which prevents double taxat10n m respect B of the same income one at the stage of deemed 'receipt, and another at the stage of actual r~ceipt, cannot be converted into an en~ctment enabling. taxation at the stage of receipt, if for any reason, th_e income wa·s not taxed in the year in which it was by law expressly required to be assessed-(208 F-H; 909 A-BJ CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1188 of 1967. c Appeal from the judgment and decree dated September 28,. 1962 of the Allahabad High Court in Misc. I.T. Reference No. 250 of 1953. M. C. Chagla, A. N. Pareekh and B. P. Maheshwari, for the appellant. D C. K. Dap~tary, Attorney-General, T. A. Ramachandran, R. N. Sachthey and B. D. Sharma, for the respondent. The Judgment of the Court was delivered by Shah, J. Aterton West and Company Ltd., Kanpur, was a E company in which at the relevant time "the public" were not "substantially interested" within the meaning of s. 23A of the Indian Income-tax Act, 1922. At the general meeting of the Company held on April 22, 1939, the Company failed to declaie dividend to the extent of 60% of the assessable income of the Company of its previous year as reduced by the amount of F income-tax and super-tax payable by the Company in respect thereof. The Income-tax Officer by order dated November 18, 1940, ordered in exercise of the power under s. 23A of the Indian Income-tax Act, as then in force, that an amount of Rs. 3,32,691 shall be de.emed to be distributed amongst the shareholders as on the date of the general meeting of the Company. On December 12. 1941, the Income-tax Officer determined the shares of the G different shareholders to whom the income was deemed to be dis-tributed, but gave no effect to the order. by including the propor-tionate shares in the amount of the deemed income in the indi-vidual ass.essments of the shareholders for the appropriate assess-mtp.t year. On April 24, 1942, the Company in a general meet-ing resolved to make available out of its reserve Rs. 2,98,000 as dividend to the shareholders and to credit the account of each H shareholder his respective share therein. Pursuant to that reso-1 u+ion Rs. 23,328 '\yere credited to the account of the appellant who held 1333 shares of the Company. In proceedings for assessment of the income of the appellant for the year 1943-44 the Income-tax Officer brought the· amount ·distributed by the Company to tax, after rejecting the contention -0f the appellant that the amount was not liable to be taxed in that year. The Income-tax Appellate Tribunal agreed with the order ·Of the Income-tax Officer. The following question under s. 66( I) of the Indian Income-·tax Act, 1922, was referred to the High Court of Allahabad for .opinion : "Whether on the facts and in the circumstances of this case, the dividend of Rs. 23,328 which was credited in the accounts of the asscssee during the accounting period of the assessment year 1943-44 could be sub-jected to tax under s. 16, sub-clause (2) of the Income-tax Act although an order under s. 23A of the Indian Income-tax Act had already been made on 12th De-cember. 1941, for the assessment year 1939-40 in the case of the Atherton West & Co. Ltd.?" (b)If such person is resident in the taxableterritories during such year,— (i) accrueorarise oraredeemedto.accrue or arise to him in the taxable territoriesduring such year, or(ii)xx(iti)xxx” yy.Te wret 4 (1) (@) & ara fsa are 16 (2) % gra az Fakta aA aa aitaT aa aay afta sada a aaaat Ad ga aa F afraiaafaz ait at art 2 walaaa F erase mifhac st AL feses adi ar var msa;*||aNa|:7 RfawaySat @ fe ag SBag dea, dea ar saratat warerar a ar fralea fear fralta far mar war 2 |® arae aaxx|x e“(1) za afafiar & aqaeqt &qequla, feel safes at fratat sh ga ona S aeavta Feet ot Aa @ exces at wa, ara aweafvara sa 3, a| (#)xxx (a) afe Rar safe Ba af Baar sada sad Ffran 2, a (i) Was ¥ daa sada saga F s3 Mey arsqya Nat Bar Maya at aqya eam sat 2, a (iii)xxX-x” 371 @ agaata Raa ®Racsacd ast feat aaeg aagaA ala sat 2, sivard st ga ara Fag cae aftafaa at sed aA H ag aan mat at fe aM Brat qe 22 are, 1939at Rafia fear var ati amie ot ae sieoe aga ase Gsag a, faut aidka 20 aig, 1939 cedt 2, Ha ona 4 alates for at aates fee aecan Ralf A se Grats ga maeffafea atauti ea weal et onefya fa sr gq aT 29 ag, 1942 asiqartat & waafae ser St sah ard A war HR sega: faafta far aaqq saat at ama ar gare Peat maar sue fhe HI Ae Ae faaSfearas ahaa eg 8 wean sealer ag IT IH WT IK al Ft FZaél am ana| cab water a wa fraitdl at qua gk 2 we aefal ffs at Aga may afinfea fea wa at qatF A waremat SA MEAs ExWA St Stal al HL AKA aca a aaa alaquae oe feet ea ae ST wawT A se Ie BT GT UAT eI sign A Me F sedsa Na ge Tea a at 23g at scary(4) at weafee saeaa aqt ag saaleta MI— | se a A ae TAT an -gttWhere tax has been paid in respect of anyundistributed profits and gains ofa company under thissection, and such profits and gains are subsequentlydistributedin anyyear, theproportionate sharetherein ofany member of the company shall be ~excluded in computing his total income of that year.” “gg US Os Cea SY Ade aera a frarlea BAF sea a afufiatia fray nat at) saa eet ag safafaafaa fear mar at feafe feat Fratftat> at 230% ada fal ata & aqraeaes aka aah aq aig %MANAG WU W Baa Se aVA ST TAT F qafas fracy BC FT afeedl H qe Ca aeIe g asat e— dagt ga ai & wala feet ata & afaafta anil ake wfaatal ~ - Rarer Hat daa fea ot gat 2 ete Be ara ak afewaazara fed af % afta far ad Saat seat % Feet weer S sae7Saint saai al ga ma Fl daqarF a agafea sx arayaa”?_3 37 aM al gt awe aa Pag ate wMia dae Rag dfeakporI 230 4 aha saat sae s Tedaa ach fafa aa as ara;Hay $ wages za st safaa faleq ads gq aa 4 abated-fear aT agar| aa ag MMig Aaa A ata: daq aarararar faaftafear Har 2 Taw miaer aiieae A ae feaer adl fRaraae® fear az- 3 3& saad % afta a hh fata aqui ak sa ae ga mae ae a aCfe 7g MU 23a (1) & ala faafea fea mA w ada St Maya gh?a ae ad anaes maw ae 230 (4) Fadia ae a geal of vt7 SA SAqeel aM sa saga, Mae A maw Agr aaa Ml, Vsan faatta anal ag sift ae ate gad are areafie otf ae, frarfa sear 2,Gal afifiatata 4 askafaa wet fear ar aaar faad fe ale feat seqag,Sa MAW Saag A ST al ama gar fas ag a se ot fafa % afeamaT AR BAH soaedl H ala fraley sear aya aa fs se aaaRL AMAL FT TH || Ba: EA Iza UAT AU eres FE ag ga na a aena adl F F— | ges aIRTTE gee [ae Sa TAIT 23q 3 at sede: soa ala (4)] faafka faq aA a a st AQ sEAdla aig BLA BL aateaa EGA HATA V1 gad ae srefea Par? fefamaause staat a az aga ae af 8a aia a frafftageal afaa Gar aifeq a ada:ora at faata fear mat a azfaa er ae gee al det eam aaale sgenftat& afrar 8MAID AAHET 8A GW BL AMAL Tal gy v”, The High Court answered the question referred in the affirma-tive. Against that order with certificate granted by the High Court this appeal is preferred. The appellant says that his proportionate share in the amount <leemed to be distributed was liable to be taxed in the assessment year 1940-41; the Commissioner says that the dividend deemed to be distributed could have been taxed in the year 1940-41, but not having been assessed to tax in that year the share of the appel-lant in the amount actually distributed was liable to be assessed in the assessment year t 943-44. The statutory provisions may first he noticed. :as it stood at the rekvant time provided : Section 23A " ( 1) Where the Income-tax Officer is satisfied that in resoect of any previous year the profits and gains distributed as dividends by any company up tq the end of the sixth month after its ;iccounts for that previous year are laid before the company in general meeting are less than sixty per cent of the assessable income of the company of that previous year, as reduced by the amount of income-tax and super-tax payable by the company in respect thereof he shall, ..... make ..... an order in writing that the undistributed por-tion of the assessable income of the company of that previous year a' computed for income-tax purposes and reduced hy the amount of income-tax and super-tax payable hy the eompany in respect thereof shall be • deemed to have been distributed as dividends amongst the shareholders as at the date of the general meeting aforesaid, and thereupon the proportionate share there-of of each shareholder shall be included in the total in-come of such shareholder for the purpose of assessing his total income. Where the Income-tax Officer makes an order against the Com-pany in the conditions prescribed by s. 23A ( 1), dividend is deemed to be distributed amongst the shareholders as at the date of the general meeting. The distribution is purely notional : but by the express provision contained in s. 23A the Income-tax Officer is enjoined to bring the proportionate share of every shareholder to tax in the appropriate year of assessment. The date of the general meeting determines the date on which the dividend is deemed to be distributed amongst the shareholders, and the proportionate share is liable to be included in the total income of each shareholder of the previous year in which the date falls. Two other related provisions may also be noticed : Section 16 ( 2) insofar as it is material, provides : "For the purposes of inelusion in the total income of an assessee any dividend shall be deemed to be in-come of the previous year in which it is paid, credited E or distributed or deemed to have been paid, credited or distributed to him, Section 4 ( 1 )(b) of the Indian Income-tax Act, 1922 in-sofar as it is material, provides : ' ( i) accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year, or (ii) (iii) [ 1969) t S.C.R (ii) al ad aaa fear var 2 ae wg FB aeam asdt % sfage 2 ag eaeCAs; wa: 354 aga A a sat afafa aa fear Bae fare fea oar2 alt at ova Seda fear mat Wt Teel SAL aHUeMH aI A fear war ztargile a ga AE qa ada area ay gg aed at feare afer 2 ale ase ea° sa at aat mee 2 Fay| sea eae ael BAT A TEA adneFS.ada Hazat aft ad Ho fac qo 12-20 (ii) (iii) By virtue of s. 16(2) read withs. 4( l )(b) the deemed dividend income is liable to be included in the total income of the share-holders on the date of the general meeting of the Company. The Act leaves no option to the Income-tax Officer : he is enjoined to include the amount in the total income of the shareholder of the previous year in which the date of the general meeting fall>. In the present case the dividend was deemed to be distributed by the Company as on April 22, 1939. The proportionate share of the dividend was liable to be included in the total income of each shareholder of the previous year in which the date April 22. 1939. fell. But the amount was never included in the assc"ec\ total income of that previous year : it was sought to be brOL1ght to tax when a pan of the reserve of the Company was actu~lly distributed by crediting to the shareholders' accounts their pro-portionate shares on ~1ay 29, 1942. It is a fundamental ruk of the law of taxation that unless otherwise expressly provided, in-come cannot he taxed twice. Again it is not open to the Income-tax Officer. if income has accrued to the assessce. and is liable. to be included in the total income of a particular year, to ignore the accrual and thereafter to tax it as income of another year 011. the basis of receipt. The Attorney.General appearing on behalf of the Commis-sioner placed strong reliance upon suh-s. ( 4) of s. 2>A which as it stood at the mJterial time prnvidcJ : "Where tax has been paid in respect of any undis-tributed profits <11><1 gains of a company under this sec-tion. and such profits and gains arc subsequently distri-bu:ed in any year, the proportionate share therein of any member o.: the company shall be excluded in com-puting his total income of that year.'" This clause was enacted with the object of preventing double F taxation of the same income : it was enacted thereby that if tax is paid by an asse>see i1!1. respect of hi, proponionatc share in the dividend deemed to be distributed in consequence of an order under s. 23A. anv actual distribution of that dividend will not he liable to be taxed. The clause docs not mean nor docs it imply that if in contravention of the express statutory provision in G s. 23A tlv: proportionate share of the shareholder in the deemed income is not included in the total income of the appropn<ite vear of assessment. it is liable to he included when the dividend i~ actually paid. credited or distributed to the shareholder.. It does not confer any option to the Income-tax Officer Ill tax either the deemed income in the hands of the shareholder on the foot-ing that it has accrued at the dat.~ of distribution under s. 23A ( 1), H nr .. at the date of actual receipt of the share under s. 23A(4). A provision which prevents double taxation .in respect of the same • income, once at the stage of deemed receipt, and another at the A stage of actual receipt, cannot be converted into an enactment en-abling taxation at the stage of receipt, if for any reason the income is not tax.ed in the year in which it was by express injunction of Jaw reg uired to be assessed nnder the provisions of the statute. Vasu GuptaAdvocate We are, therefore, unable to agree with the observations of the High Court that-· B "It [sub-s. ( 4) of s. 23A], therefore clearly con-templates the possibility of tax having been levied on a deemed dividend and also later wben that dividend was in fact distributed by the company. This would indicate that the legislature never intended that there should be a bar to assessing a dividend when actually c received or distributed although it had earlier been treated by the .pepartment and brought to tax as deemed dividend in the hands of the shareholders." The observation is, in our judgment, contrary to the express words of the statute. D The answer recorded by the High Court is, therefore, dis-charged, and the question submitted will be answered in the negative. The appeal is allowed with costs in this Court. The High Court has passed no order as to costs, and we do not pro-pose to interfere with that order. Appeal allowed .