Rajakumari Mathuramba Rajayi vs First Expenditure Tax Officer

Veeraswami, J.—This petition turns on the application of Section 53 of the Finance Act, 1964, to the expenditure incurred by the deceased,

Shanmugha Raja, between July 1, 1962, and March 11, 1963. After his death on March 11, 1963, the Expenditure-tax Officer, Karaikudi, by a

notice u/s 13(2) of the Expenditure-tax Act, 1957, which was dated August 18, 1964, called upon his widow to furnish a return of the expenditure

incurred by him for the expenditure-tax assessment year 1964-65. By a later correspondence from the department it appears that the requisition

for return was confined to the year ended June 30, 1963.

This shows, and it is not in dispute, that the deceased Raja of Sivaganga followed the year from July 1 of a year to June 30 of the following year.

The present petition under Article 226 of the Constitution is to forbid the Expenditure-tax Officer from proceeding further. The ground of the

petitioner is that, on a proper interpretation of Section 53 of the Finance Act, 1964, there Was no liability to return at all as the petitioner had been

called upon to do. The section uses the phraseology "" for every financial year commencing on or after the first day of April, 1964"". Mr.

Vedantachari, for the petitioner, contends that having regard to this language, charge to expenditure-tax would arise only in respect of expenditure

incurred subsequent to April 1, 1964. In any case, he would say that, since the petitioner''s husband had died on March 11, 1963, the respondent

was not justified in calling for the return. This argument is addressed on the assumption that Section 53 of the Finance Act, 1964, would, if at all,

bring to tax only expenditure incurred subsequent to April 1, 1963. The last argument can easily be answered. As we mentioned earlier, the

petitioner''s husband followed, for purposes of assessment, the year commencing from 1st July. That being the case, and having regard to the

statutory provisions in this regard, the respondent would be justified in asking for a return for the period July 1, 1962, to March 11, 1963.

On the other point too, we do not feel any difficulty. Section 3, which is the charging section, charges for every financial year commencing from

April 1, a tax at the specified rate in respect of expenditure incurred in the previous year. "" Assessment year "" is defined by Section 2(d) as the

year for which tax is chargeable u/s 3. It follows, therefore, that the financial year mentioned in Section 3is the same as "" the assessment year"". The

charge for the assessment year is in respect of the expenditure incurred in the previous year. The argument of Mr. Vedantachari is that Section 53

of the Finance Act, 1964, does not make reference to the expenditure incurred in the previous year but it merely says that expenditure-tax shall be

charged under the Act for every financial year commencing from April 1, 1964, in respect of the expenditure incurred by an individual or Hindu

undivided family. But it is obvious that Section 53 is not by itself the charging section and its purpose is merely to bring into force again the

Expenditure-tax Act, which had been earlier suspended in its operation by Section 53 of the Finance Act of 1962. The charge, be it under the

Income Tax Act, or any other Central Act, levying direct taxes, is for any year in respect of the income or the expenditure or any other subject-

matter of the previous year. There is no reason to suppose that Section 53 of the Finance Act, 1964, departed from that scheme.

The petition is dismissed with costs. Counsel''s fee Rs. 250.