JUDGMENT
G.G. Sohani, Actg. C.J.
1. By this reference under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), the Income-tax Appellate Tribunal, Indore Bench, Indore, has referred the following question of law to this court for its opinion ;
“Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the law in force on April 1, 1977 was applicable to the default committed by the assessee and that the additional tax was righlty levied on the assessee ?”
2. The material facts giving rise to this reference, briefly, are as follows ;
3. While framing the assessment of the assessee for the assessment year 1976-77, for which the previous year of the assessee ended on March 31, 1976, the Income-tax Officer levied additional income-tax under section 104 of the Act on the ground that within 12 months following the expiry of the previous year, the assessee had failed to distribute the prescribed percentage of its distributable income as dividend. The appeal preferred by the assessee before the Commissioner of Income-tax (Appeals) was dismissed. On further appeal before the Tribunal, it was urged on behalf of the assessee that the default on the part of the assessee had taken place on April 1, 1977, but as Sub-section (4) of Section 104 of the Act was amended with effect from April 1, 1978, excluding from the operation of the provisions of Section 104 of the Act the assessee-company which was engaged in manufacturing goods, it could not be held liable to pay additional tax under Section 104 of the Act. This contention was not upheld by the Tribunal and the appeal preferred by the assessee was dismissed. Aggrieved by the order passed by the Tribunal, the assessee sought a reference and it is at the instance of the assessee that the aforesaid question of law has been referred to this court for its opinion.
4. Having heard learned counsel for the parties, we have come to the conclusion that this reference must be answered in the affirmative and
against the asaessee. It has been found by the Tribunal that, the default on the part of the assessee took place on April 1, 1997, as, within 12 months following the expiry of the previous year, the dividend distributed by the assessee in respect of the previous year ending on March 31, 1976 was less than the prescribed percentage. In these circurnstances, the law in force on April 1, 1977, would be applicable to the case of the assessee. It could not be disputed that under the provisions of Section 104 of the Act, as they existed on April 1, 1977, the assessee became liable for additional tax. The Tribunal was, therefore, right in holding that the assessee was liable to pay additional tax in terms of the provisions of Section 104 of the Act,
5. Our answer to the question referred to this court is, therefore, in the
affirmative and against the assessee. In the circumstances of the case,
parties shall bear thceir own costs of this reference.