JUDGMENT The judgment of the Court was as follows ; Sen J.: In this Reference under Section 66 (1) of the Indian Income tax Act, 1922, the question referred reads as follows : "Whether on the facts and in the circumstances of the case, when the balance of the book profit after payment of tax is lower than the amount to be distributed out of the statutory distributable surplus, the provisions of section 23A can be applied for the years under reference" . The facts appear from the statement of the case and the annexures thereto. For the assessment years, 1956-57, 1958-59 and 1960-61, the distributable surplus available to the assessee company arrived by deducting the taxes payable from he income assessed were respectively Rs. 56.015/- ; Rs. 1,06,394/- and R5. 164986/- It was also found that the dividend which was declared by the assessee company in respect of the said three years were respectively Rs. 20,000/- ; Rs. 30,000/- and Rs. 45,000/-. 2. Subsequently there were some modifications in these figures and ultimately the balance of distributable surplus found to be available to the assessee company in the said three assessment years were found Rs. 38,015/-; Rs. 75,394/- and Rs. 1, 19,986/-. 3. Under Section 23A of the Indian Income-tax Act, 1922, the assessee had to declare 90 per cent of the distributable surplus as dividend. As admittedly this percentage was not declared by way of dividends, the Income-tax Officer assumed jurisdiction under the said Section and levied additional super tax for the said three assessment years. 4. The assessee appealed to the Appellate Assistant Commissioner against the said orders levying additional super-tax. The Appellate Assistant Commissioner dismissed the appeals and confirmed the orders under Section 23A. Thereafter the assessee appealed for the second time to the Income-tax Appellate Tribunal. 5. Before the Tribunal it was contended that though the distributable surplus might have been found to be the figures mentioned above, the amounts which were available to the assessee company out of its book profits for distribution of dividends for the said three years were the sums of Rs. 46,924/- ; Rs. 48.522/- and Rs. 1,46,604/-. It was contended that the statutory amounts of 90 per cent of the distributable surplus would be Rs. 50, 413/-; Rs.95,755/- and Rs. 1,48,487/- respectively, which under no circumstances the assessee could have distributed from its Book profits. This was impossible. 46,924/- ; Rs. 48.522/- and Rs. 1,46,604/-. It was contended that the statutory amounts of 90 per cent of the distributable surplus would be Rs. 50, 413/-; Rs.95,755/- and Rs. 1,48,487/- respectively, which under no circumstances the assessee could have distributed from its Book profits. This was impossible. The unreported decision of this Court in the case of (1) Messrs, Aviquipo of India Private Ltd v. Commissioner of Income-tax, Calcutta (Reference No.5 of 1962) was cited and it was contended that no order under Section 23A could be passed. 6. Decisions in the cases of (5) Commissioner of Income-tax v. Union Company Ltd. reported in 59 ITR 483 and (6) Srinivas Banking Co. Ltd v. Commissioner of Income-tax reported in 58 ITR 89 were cited on behalf of the Revenue. 7. The Tribunal followed the decision of this Court in Aviquipo's case held that it would not have been possible for the assessee under any circumstances to distribute the requisite sum and, therefore, Section 23A could not be applied in the facts and circumstances of this case. 8. Section 23A of the Indian Income-tax Act, 1922, bas been interpreted in a number of decisions of the Supreme Court as well as of this Court. In the case of (2) Commissioner of Income tax, West Bengal v. Messrs. Gangadhar Banerjee & Co. (Private) Ltd. reported in 57 ITR. at P. 176, the Supreme Court construed this Section and observed, inter, alia, as follows : "To act under this Section the Income-tax officer has to be satisfied that the dividends distributed by the company during the prescribed period are less than the statutory percentage........................... Unless there is a deficiency in the statutory percentage, the Incometay Officer has no jurisdiction to take further action thereunder. If that condition is complied with, he shall make an order declaring that the undistributed portion of the assessable income less the said taxes shall be deemed to have been distributed as dividends amongst the shareholders. But before doing so, a duty is cast on him to satisfy himself that, having regard to the losses incurred by the company in earlier years or "the smallness of the profit made," the payment of a dividend or a larger dividend than that declared shall be reasonable...... ... But before doing so, a duty is cast on him to satisfy himself that, having regard to the losses incurred by the company in earlier years or "the smallness of the profit made," the payment of a dividend or a larger dividend than that declared shall be reasonable...... ... the reasonableness or the unreasonableness of the amount distributed as dividend is judged by business considerations, such as the previous losses the present profits, the availability of surplus and the reasonable requirements of the future and similar others. He must take an overall picture of the financial position of the business......... It depends upon the facts of each case, The only guidance is his capacity to put himself in the position of a prudent businessman or the director of a company and his sympathetic and objective approach to the difficult problem that arises in each case." In the subsequent case of (3) Goblad Motor Service (Private) Limited v. The Commissions of Income-tax, Madras, reported in 60 ITR 417, the Supreme Court reaffirmed the principles laid down in the case of Gangadhar Banerjee. 9. In Aviquopo's case it was found that the net commercial profits available for distribution in the year in question was only Rs. 4925/and to come out of the mischief of section 23A the assessee in that case would have to distribute a sum of Rs. 11,236/-by way of dividend as it was not possible for the assessee to do so. In these facts it was held that the profit available to the assessee was very small and it was not unreasonable on the part of the assessee not to declare any dividend, this decisions has to be considered in the light of the law as laid down by the Supreme Court. In the facts of that case it was seen exfacie that the available profits were to measure and that was considered sufficient to bring the case out of the mischief of section 23A. Aviquopo's case has been considered in a subsequent unreported decision of this Court in the case of (4) Sudhir Chatterjee & Co, (Private) v. Commissioner of Income tax, West Bengal-I, in Income-tax Reference No. 215 of 1969. In that case it has found that the distributable surplus was Rs. 41,546/-and the statutory percentage worked out at Rs. 24.927.60 p. the commercial profit available was only Rs.20.862/- and the dividend declared was Rs. In that case it has found that the distributable surplus was Rs. 41,546/-and the statutory percentage worked out at Rs. 24.927.60 p. the commercial profit available was only Rs.20.862/- and the dividend declared was Rs. 12,000/- i.e, 55 per cent of the commercial profits of the company. It was also found that the company had suffered losses in two previous years. On the above facts it was held that it was not unreasonable for the Board of Directors of the company as prudent businessmen, not to declare the entire amount of available commercial profits as dividends leaving a small surplus. 10. In the instant case the Tribunal has only considered the fact that the statutory percentage under section 23A could not in any circumstance be distributed out of the available commercial profits. On that alone the Tribunal has come to the conclusion that section 23A has no application in this case. It appears to us that the Tribunal ought to have considered further, whether in the said three assessment years, the Directors of the assessee company as prudent businessmen could have reasonably declared a larger dividend than it has done. For this purpose smallness of profits, losses in previous years if any, provision for future contingencies and all other aspects of business have to be kept in view. Only after such consideration a conclusion can be drawn whether the dividend declared has been reasonable or unreasonable. 11. In this view we are unable to answer the question referred. The matter goes back to the Tribunal for further consideration and disposal according to law. In the facts and Circumstances of the case there will be no order as to costs. Deb J: I agree.