Tanjore Permanent Bank Ltd. vs Commissioner of Income Tax

Rangarajan, J.—In this case, the Appellate Tribunal has referred the following questions, in compliance with the direction of this court :

Whether, on the facts and circumstances of this case, the Tribunal acted in accordance with law in not deciding the issue relating to the

correctness or otherwise of the deletion of Rs. 54,996 made by the Appellate Assistant Commissioner in computing the total income of the

assessee for the year 1965-66 ?

Whether on the facts and circumstances of the case, the sum of Rs. 54,996 was liable to be considered in the assessment year 1965-66 ?

These questions proceeded on the assumption of the assessee that the interest on securities is being assessed to tax on accrual basis for the year

in question for the three preceding assessment years, it was assessed to tax on receipt basis and consequently there might have been a double

taxation of the amount of Rs. 54,996. The Appellate Tribunal has upheld the assessment of the income on accrual basis. An amount which is being

assessed on accrual basis could not have been received in the earlier years and be subjected to tax in the earlier years. It is only an amount which

is assessed on accrual basis that may be taxed on receipt basis for the subsequent year when there is a change of method of assessment. It follows

that the question of double taxation, merely because of a change of the method of assessment for the year in question by adopting the accrual

method as against receipt basis for the earlier years, does not arise. In the circumstance, the questions stated do not arise from the order of the

Tribunal, and accordingly we decline to answer the reference.

No costs.