ISSUE:
Whether a Foreign company can be taxed in India under Indian laws?
Whether Sections 3,4, 4A, and 64 of the Indian Income-tax Act, 1922-1939, are valid by virtue of which there was made on the appellant company an assessment to income-tax on income which included income arising without British India?
Whether a particular Income-tax Officer have the jurisdiction to make that assessment?
RULE:
The general conception as to the scope of the legislative practice in the United Kingdom with regard to income tax is that given a sufficient territorial connection between the person sought to be charged and the country seeking to tax him income tax may properly extend to that person in respect of his foreign income. That general conception, both on a consideration of the British legislation and the Government of India Act, 1935, finds a place in the phrase “taxes on income” as used in that Act and the principle of sufficient territorial connection is implicit in the power conferred by the Government of India Act, 1935.