Judgment

KAPUR, J. : This is an appeal pursuant to a certificate of the High Court of Kerala against the judgment and order of that Court and the question for decision is the applicability of S. 35 of the Indian Income-tax Act (hereinafter termed the Act ).

2. The facts which have given rise to the appeal are these: The respondent is a limited company which owns a spinning mill at Alwaye. It commenced business in January 1951, and its first accounting year ended on December 31, 1951 and the relevant assessment year is 1952-53. It filed its return showing an income of Rs. 3,21,284 without taking into account the amount allowable under S. 15-C of the Act. On February 2, 1953, the net assessable income of the respondent was determined at Rs. 1,47,083 after deducting Rs. 1,79081 under S. 15-C. The respondent however declared a dividend of Rs. 4,72,415 which attracted the application of S. 2 of the Finance Act, 1952, read with Part B, proviso (ii) of First Schedule and thus it became liable to the payment of additional income-tax and this fact was overlooked by the Income-tax Officer. After giving notice under S. 35 of the Act, the Income-tax Officer by an order dated January 25, 1954, r