The Commissioner of Income Tax vs Binny and Co. (London), by agents Binny and Co.

What we are asked to determine is the meaning of the words ""tax was recovered"" in Section 50 of the Indian Income Tax Act. It is contended

by the assessee that the word ""recovered"" which ordinarily has the meaning of taking back must refer to the repayment of the tax in the United

Kingdom referred to in Section 49 and that the words ""tax was recovered"" must be read as meaning tax was refunded to the assessee under the

provisions of Section 27 of the Finance Act of 1920. Unfortunately for this contention we see that S.50 is applicable not only to Section 49 but

also to Section 48; and if we are to apply this meaning of the word ""recovered"" to Section 48, it would mean that when a person had obtained a

refund u/s 48 he is given u/s 50 another year within which to apply for that same refund. It certainly makes nonsense of these two sections. The

word ""recovered"" does not necessarily mean the actual taking back of what has been given as is obvious from its use throughout the Income Tax

Act. In Section 18(8) which deals with ""deduction of tax in advance,"" it is observed that ""the power to levy by deduction under this section shall be

without prejudice to any other mode of recovery,"" implying thereby that deduction is one mode of recovery. Similarly, u/s 41, tax is ""recoverable

from the Court of Wards, Administrator-General, etc., and there it does not mean taken back. It is suggested that tax can only be ""recovered"" by

coercive process. The Act does not provide for recovery by coercive process, but even then there is no taking back of what has been given any

more than when the tax is received by voluntary payment. Possibly there is an implication in the word ""recover"" that the tax is a sum, which has to

be deducted out of the income, as really belonging to the Government, and in that sense the word ""recovered"" would bear the meaning of taking

back. Section 44(a) is also a very strong argument against the assessee''s contention as to the meaning of the word ""recovered"". We are therefore

satisfied that the words ""tax was recovered"" mean ""tax was recovered by the Government"".

It has been pointed out to us that this interpretation may cause hardship in individual cases where there has been delay on the part of the Income

Tax authorities in England in making the refund there, such delay not being due to the default of the assessee. We would point out that this hardship

can only be obviated by an amendment of Section 50 and we are of opinion that this should be done by giving the Income Tax Commissioner

power to extend the time in suitable cases.

The petitioner will pay the costs of this application, i. e., counsel''s fee Rs. 250.