K. T. DESAI, J. ( 1 ) THIS is a reference under sec. 66 (1) of the Indian Income Tax Act 1922 at the instance of the assessee. The assessee is a private limited company. The assessment years with which we are concerned are the years 1950-51 1951 1952 and 1953-54 the accounting years being the years ending 31st March 1950 31 March 1951 31 March 1952 and 31st March 1953 respectively. At all material times the assessee company had its registered office at Dhrangadhra in Saurashtra and was carrying on business at Dhrangadhra. The first assessment on the assessee company under the Indian Income Tax Act 1922 was made for the assessment year 1950-51. The Indian Income Tax Act 1922 was extended to Part B States from 1st April 1950. The question involved relates to the construction of the provisions contended in section 14 (2) (c) of the Indian Income Tax Act. Section 14 (2) (c) as it stood on 1st April 1950 before the amendment made therein by the Indian Income-tax (Amendment) Act 1953 read as follows :the tax shall not by payable by an assessee xx xx xx xx xx (c) in respect of any income profits or gains accruing or arising to him within a Part B State unless such income profits or gains are received or deemed to be received in or are brought into the taxable territories in the previous year by or on behalf of the assessee or are assessable under sec. 12b or sec. 42 ( 2 ) BY the Income Tax (Amendment) Act 1953 in the above clause for the words a part B State the words the State of Jammu and Kashmir have been substituted with effect from 1st April 1950. Under the circumstances the following question of law has been referred to us : (I) Whether tax is payable by the company on its part B State income for the assessment years 1950-51 1951 1952 and 1953-54 ? ( 3 ) A reference was made by Mr. S. P. Mehta the learned advocate for the assessee to the provisions of the Finance Act of 1950. He urged that by sec. 2 (1) of that Act it was provided that income-tax should be charged at the rates specified in Part I of the First Schedule and the rates of super-tax shall for the purposes of sec. S. P. Mehta the learned advocate for the assessee to the provisions of the Finance Act of 1950. He urged that by sec. 2 (1) of that Act it was provided that income-tax should be charged at the rates specified in Part I of the First Schedule and the rates of super-tax shall for the purposes of sec. 55 of the Indian Income Tax Act 1922 be those specified in Part II of the First Schedule. By sub-clause 7 of sec. 2 it is provided that for the purposes of the said section and of the rates of tax imposed thereby the expression total income meant total income as determined for the purposes of incometax or super-tax as the case may be in accordance with the provisions of the Income-tax Act. It was urged on behalf of the assessee that as no amendment had been made in the Finance Act of 1950 the amendment made in the Income Tax Act by the Income Tax (Amendment) Act 1953 could not effectively operate In his submission if the legislature wanted to prevent the operation of the exempting provisions contained in sec. 14 (2) (c) as from 1st April 1950 in respect of any class of income then it could only effectively do so by amending both the provisions contained in sec. 14 (2) (c) and the provisions of the Finance Act of 1950. ( 4 ) A similar argument had been advanced before the Supreme Court in the case reported in 40 I. T. R. page 490 Rajputana Mining Agencies Ltd. v. Union of India and another. It was held in that case that the fiction in the amendment that it shall be deemed to have been substituted with effect from April 1 1950 made the exemption under sec. 14 (2) (c) disappear as if it had never been granted as regards all Part B States except the State of Jammu and Kashmir. The argument advanced by Mr. S. P. Mehta before us has been negatived in that judgment of the Supreme Court. In view of the decision of the Supreme Court our answer to the first question whether tax is payable by the company on its Part B State income for the assessment years 1950-51 1951 1952 and 1953-54 is in the affirmative. S. P. Mehta before us has been negatived in that judgment of the Supreme Court. In view of the decision of the Supreme Court our answer to the first question whether tax is payable by the company on its Part B State income for the assessment years 1950-51 1951 1952 and 1953-54 is in the affirmative. ( 5 ) THE second question raised before us relates to the construction of the words Indian rates of tax appearing in paragraph 6a of Part B States ( Taxation Concessions ) Order 1950 Paragraph 6a provides as under :the income profits and gains of any previous year which is a previous year for the assessment for the year ending on the 31st day of March 1953 1954 and 1955 shall be charged to tax at the Indian rates of tax provided that from the tax so computed there shall be allowed in each year rebate at the percentage thereof specified hereunder: in respect of so much of the income profits and gains as accrue or arise (a) in the States of Saurashtra Madhya Bharat or Rajasthan to any assessee at the rate of 40 per cent 20 per cent and 10 per cent respectively for the assessment for the year ending on the 31st day of March 1953 1954 and 1955. ( 6 ) THE second question referred to us runs as follows : (2) Whether in computing the rebate due to the assessee company by virtue of Paragraph 6a of the Part B States (taxation Concessions) Order 1950 for the assessment years 1952-53 and 1953-54 the words Indian rates of tax should be taken to be Rs. 0-4-0 with 1/20th added thereon as surcharge for income-tax and Rs. 0-4-9 for corporation tax or whether it should be the effective rate after reduction of rebates allowed? ( 7 ) ON behalf of the assessee it is urged that the expression Indian rates of tax refers to only certain provisions contained in the First Schedule to the relevant Finance Acts. Our attention was called to the provisions of the Finance Act 1951 as modified by the Finance Act 1952 By sec. 2 thereof it has been provided that subject to the provisions of sub- secs. Our attention was called to the provisions of the Finance Act 1951 as modified by the Finance Act 1952 By sec. 2 thereof it has been provided that subject to the provisions of sub- secs. (3) (4) and (5) for the year beginning on the 1st day of April 1952 income-tax shall be charged at the rates specified in Part I of the First Schedule increased in each case by a surcharge for the purposes of the Union at the rate specified therein in respect of each such rate of income-tax and (b) rates of super-tax shall for the purposes of sec. 55 of the Indian Income-tax Act 1922 be those specified in Part II of the First Schedule increased in the cases to which paragraphs A B and C of that Part apply by a surcharge for the purposes of the Union at the rate specified therein in respect of each such rate of super-tax. When we turn to the First Schedule Part I it is headed Rates of Income-tax. Under B it is provided as under : @@@ ( 8 ) PROVIDED that in the case of a company which in respect of its profits liable to tax under the Income-tax Act for the year ending on the 31st day of March 1953 has made the prescribed arrangements for the declaration and payment within the territory of India excluding the State of Jammu and Kashmir of the dividends payable out of such profits and has deducted super-lax from the dividends in accordance with the provisions of sub-sec. (3d) or (3e) of sec. 18 of the Act (I) where the total income as reduced by seven annas in the rupee and by the amount if any exempt from income-tax exceeds the amount of any dividends (including dividends payable at a fixed rate) declared in respect of the whole or part of the previous year for the assessment for the year ending on the 31st day of March 1953 and no order has been made under sub-sec (1) of sec. 23a of the Income-tax Act a rebate shall be allowed at the rate of one anna per rupee on the amount of such excess; (ii) where the amount of dividends referred to in clause (i) above exceeds the total income as reduced by seven annas in the rupee and by the amount if any exempt from income-tax there shall be charged on the total income an additional income-tax equal to the sum if any by which the aggregate amount of income-tax actually borne by such excess (hereinafter referred to as the excess dividend ) falls short of the amount calculated at the rate of five annas per rupee on the excess dividend. xxx xxx xxx xxx ( 9 ) FOR the purposes of clause (ii) of the above proviso the aggregate amount of income-tax actually borne by the excess dividend shall be determined as follows : (I) the excess dividend shall be deemed to be out of the whole or such portion of the undistributed profits of one or more years immediately preceding the previous year as would be just sufficient to cover the amount of the excess dividend and as have not likewise been taken into account to cover an excess dividend of a preceding year; (ii) such portion of the excess dividend as is deemed to be out of the undistributed profits of each of the said years shall be deemed to have borne tax (a) if an order has been made under sub-section (1) of section 23a of the Income-tax Act in respect of the undistributed profits of that year at the rate of five annas in the rupee and (b) in respect of any other year at the rate applicable to the total income of the company. for that year reduced by the rate at which rebate if any was allowed on the undistributed profits. for that year reduced by the rate at which rebate if any was allowed on the undistributed profits. ( 10 ) IT was urged on behalf of the assessee that the expression at the Indian rates of tax appearing in paragraph 6a of the Part B States (Taxation Concessions) Order 1950 referred only so tar as the assessee company was concerned to the rate of four annas in the rupee provided under the head B in the First Schedule and did not cover the rebate admissible under the other provisions contained in B Part II of the First Schedule to the Finance Act 1951 as modified by the Finance Act 1952 deals with Rates of Super-tax The case of a company is dealt with at D in Part II. It is there provided as under : @@@ -In the case of every company- rate on the whole of total income provided that - four annas and nine pies in the rupee. (I) a rebate at the rate of three annas per rupee of the total income shall be allowed in case of any company which (a) in respect of its profits liable to tax under the Income-tax Act for the year ending on the 31st day of March 1953 has made the prescribed arrangements for the declaration and payment in the territory of India excluding the State of Jammu and Kashmir of the dividend payable out of such profits and for the deduction of super-tax from dividends in accordance with the provisions of sub-sec. (3d) or (3e) of sec. 18 of that Act and (b) is a public company with total income not exceeding Rs. 25 0 (ii) a rebate at the rate of two annas per rupee of the total income shall be allowed in the case of any company which satisfies condition (a) but not condition (b) of the preceding clause: ( 11 ) THERE are other provisions relating to rebate. The provisions in respect of the Finance Act of 1951 as modified by the Finance Act 1953 are similar to those quoted above with the substitution of 1st day of April 1953 for 1st day of April 1952 and of 31st day of March 1954 for 31st day of March 1953. The provisions in respect of the Finance Act of 1951 as modified by the Finance Act 1953 are similar to those quoted above with the substitution of 1st day of April 1953 for 1st day of April 1952 and of 31st day of March 1954 for 31st day of March 1953. It is urged on behalf of the assessee that the expression Indian rates of tax appearing in Paragraph 6a refer to the super-tax at the rate of four annas and nine pies in the rupee without any deduction being made therefrom on account of rebate provided under the provisos contained in D. The question that we will have to determine is whether the expression Indian rates of tax refers to the specific rates mentioned in Part I and Part II without reference to the rebates that are required to be given under the various provisos therein appearing. When one examines the language of Paragraph 6a one finds that in the first instance what is required to be done is to compute the tax at the Indian rates of tax in respect of income profits and gains of any previous year which is a previous year for the assessment for the year ending on the 31st day of March 1953 1954 and 1955. It is after the compution of the tax at the Indian rates of tax that a rebate has to be allowed as therein subsequently provided. If the argument of the assessee is accepted the result would be that even in respect of income profits or gains other than the income profits or gains which accrue or arise in the States of Saurashtra Madhya Bharat or Rajasthan to any assessee no rebate could be allowed as provided in the Finance Acts and that for the purpose of clause 6a tax shall have to be computed without reference to such rebates. Such a result could not possibly have been contemplated when Paragraph 6a was modified. The Part B States ( Taxation Concessions ) Order 1950 has been issued by the Central Government in exercise of the powers conferred by sec. Such a result could not possibly have been contemplated when Paragraph 6a was modified. The Part B States ( Taxation Concessions ) Order 1950 has been issued by the Central Government in exercise of the powers conferred by sec. 60a of the Indian Income Tax Act 1922 section at the material time provided as under:if the Central Government considers it necessary or expedient so to do for avoiding any hardship or anomaly or removing any difficulty that may arise as a result of the extension of this Act to the merged territories or to any Part B State the Central Government may by general or special order make an exemption reduction in rate or other modification in respect of income-tax in favour of any class of income or in regard to the whole of any part or the income of any person or class of persons. ( 12 ) THE powers under sec. 60a are powers intended to be exercised for the purpose of giving relief and not for the purpose of imposing a greater or a larger burden. If the argument of the assessee was accepted then the result thereof would be that in computing the tax under the provisions of clause 6a of the Part B States (Taxation Concessions) Order 1950 the rebate provided under the relevant Finance Acts was not liable to be allowed and only the rebate provided in Paragraph 6a was liable to be given In our view if the construction sought to be put on the words 6 Indian rates of Tax is accepted there may be conceivable cases where the burden instead of being reduced would be increased. In our view the expression Indian rates of tax refers to the rates of tax specified in Part I and Part II of the First Schedule to the relevant Finance Acts. The rebates permitted under various provisions contained in Part I and Part II from an integral part of the rates prescribed in Part I and Part II of the First Schedule and the rebates cannot be divorced from the rate of four annas in the rupee and surcharge at the rate of one-twentieth thereof so far as income-tax on companies is concerned and the rate of four annas and nine pies in the rupee in respect of super-tax in the case of companies. ( 13 ) THE question that has been referred to us for decision in this connection is whether in computing the rebate due to the assessee company by virtue of Paragraph 6a of the Part B States (Taxation Concessions) Order 1950 for the assessment years 1952-53 and 1953-54 the words Indian rates of tax should be taken to be Rs. 0-4-0 with 1/20th added thereon as surcharge for income-tax and Rs. 0-4-9 for corporation tax or whether it should be the effective rate after reduction of rebates allowed ? Our answer to the question is that in computing rebate due to the assessee company by virture of Paragraph 6a of Part B States (Taxation Concessions) Order 1950 for the assessment years 1952-53 and 1953-54 the words Indian rates of Tax should be taken to be the effective rates after reduction of rebates allowed under the relevant Finance Acts. The assessee will pay to the Commissioner the cost of the reference. Reference answered. .