1968 PLP 392 (PTD)

If we remember the dates we have indicated above, our answer must be in the negative in this case and we shall presently indicate the reason for the conclusion. The Martial Law Regulation No. 43, we have already stated came into force on 3rd November 1958. It is stated therein:‑ "This Regulation shall come into force at once and shall take effect notwithstanding any provision to the contrary contained in any other law." This section clearly lays down that the Regulation is to come into force at once. Its overriding nature is also clear. Section 2 of the Regulation reads as follows:‑ "2 (i) Any person, who has filed the return of his income under the Income‑tax Act 1922, for the assessment year 1954‑55 or any assessment year thereafter, and who has reason to believe that the return so filed is not correct, may file a revised return of this true income by the 15th December 1958: No action of any kind whatsoever shall be taken for having submitted an incorrect return originally, or in respect of the nature of the transaction from which the income represented by the difference between the revised return and the original return, hereinafter called the "excess income", was derived." (ii) In case it is not possible for him to compile the revised return separately for each year, a consolidated revised statement showing his income for the entire period commencing with the assessment year 1954‑55 may be filed." We are, therefore, now to examine if the assessee is a person who comes within the ambit of Clause (i) of section 2 of the Regula tion. This section speaks of a person who has filed return of his income under the Act for the assessment year 1954‑55 or any assessment or thereafter. Pausing here for a moment we may say that the assessee has submitted a return for the year 1958‑59 and that year is an assessment year after 1954‑

55. He is, therefore, a person contemplated in this section. It is further provided herein that if he files an incorrect return, he may file a revised one. In this case he submitted a second return for the same period on 31‑12‑

58. Therefore he fulfils the requirement of second part as well. I would mention here that this Regulation was amended by Regulation 48 and 15th December, was extended to 31st December 1958. On analysis of the relevant provision, it is found, therefore; that the assessee is clearly a person contem plated within Clause (i) of section

2. Clause (ii) which has also been quoted above of course refers to the procedure of filing return. It proves that if an assessee is not able to submit his income for the years separately, he is given further facility of submitting the revised statement in a consoli dated manner as has been done by the present assessee. Then comes the most important declaration in section 3 of the Regulation. I would set out here section 3 (1) which is in the following terms: "

3. For the purpose of charge to tax.‑(1) The `excess income' shall not be treated as part of the total income of the same person but separately as if it were, the total income of another person . . ." This provision expresses clear intention of the law‑making authority to the effect that the excess income shall not be treated as part of the total income of the same person. The Income‑tax Officer has acted contrary to this provision and surprisingly enough it has been upheld by the Tribunal ignoring the said provision. This section lays down that such income is to be treated separately as if it were a total income of another person. It then provided in clause (ii) as to what would be the method of computation of such excess income. Mr. A. H. Mirza, submits that once this excess income is not included in the total of the assessee with his taxable income of Rs. 74,638, there is no other dispute with the department with regard to the percentage applicable to this case. We have clearly indicated that the excess income of the sum of Rs. 1, 89,108 is not includable in the total income of the assessee shown in its original‑ return. The position boiles down to this that the amount of Rs.74,638 will be treated separately and the income‑tax is to be paid on the said amount in accordance with law. So far as the amount of Rs. 1,89,108 is concerned this is also to be treated separately and the income‑tax payable for the said amount shall be compounded at 31% of the said amount as laid down in sub- clause (a) of clause (ii) of section

3. We answer the question quoted in this judgment in the negative accordingly. There will be no order as to costs. A. H. KHAN, J.‑I agree. S. Q. Reference answered in the negative.