Summarize the following court judgment. Appeal No. 21. of 1962. Appeal by special leave from the judgment and order dated September 23	 1958	 of the Bombay High Court in I.T. Reference No. 87 of 1957. H.N. Sanyal	 Additional Solicitor General of India	 N. D. Karkhanis and R. N. Sachthey	 for the appellant. A.V. Viswanatha sastri	 J. B. Dadwhanji	 O. C. Mathur and Ravindra Narain	 for the	 respondent	 768 1962. October 25. The judgment of the Court was delivered by SHAH	 J. For the year of account ending March 31	 1955	 Afco Private Ltd. a private limited company earned a total income which was finally computed in assessment proceedings by order of the Income tax Tribunal	 at Rs. 49	843/ . The company declared a dividend of Rs. 11	7121 on July 13	 1955	 and before the close of the year of assessment 1955 56 declared an additional dividend of Rs.5	612/ 	 thereby distributing in the aggregate dividend which was not less than 60% of the total income	 reduced by the income tax and super tax payable by it. The company then claimed rebate at the rate of one anna in the rupee on the amount computed according to Schedule 1	 Part 1	 Item B read with section 2 of the Finance Act 15 of 1955. The Income tax Officer and the Appellate Assistant Commissioner rejected the claim because in their view the claimant was a company to which the provisions of section 23A of the Income tax Act could not be made applicable. In appeal	 the Income tax Appellate Tribunal	 Bombay '	 reversed the order of the Income tax authorities. The Tribunal opined that the expression "cannot be made applicable" in Item B of Part 1 of Schedule 1 of Finance Act 15 of 1955 must be read in conjunction with section 23A of the Income tax Act	 and the benefit of rebate provided by the Finance Act	 1955	 cannot be denied to a Private Company if the conditions prescribed in section 23A(1) are fulfilled. The following question referred by the Tribunal to the High Court of judicature at Bombay was answered in the affirmative : "Whether on the facts and in the circumstances of the case	 the assessee company having distributed dividends of over 60% of the company 's total income less income tax and super tax payable thereon is entitled to the rebate of 769 1 anna per rupee on the undistributed balance of profits as provided in clause (1) of the proviso to item B of Part 1 of the 1st Schedule to the Finance Act of 1955 ?" By the Finance Act 15 of 1955 Schedule 1 Item B read with section 2 of the Act rates of tax were prescribed in the case of companies. Item B providedthat "in the case of every company Rate surcharge on the whole of total income Four annas one twen in the tieth of rupee the rate specified in the pre ceeding column. 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	 1956	 has made the prescribed arrangements for the declaration and payment within the territory of India	 of the dividends payable out of such profits.	 and has deducted super tax from the dividends in accordance with the provisions of sub section (31) of section 18 of that 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	 1956	 and the company is a corn any to which the provisions of section 23A of the Income tax Act cannot be made applicable	 a rebate 770 shall be allowed at the rate of one anna per rupee on the amount of such excess ; (ii)x x x x" By section 23A(1) of the Income tax Act at the material time the Income tax Officer was authorised to order a company to pay super tax	 at the rate of eight annas in the rupee in the case of a company whose business consisted wholly or mainly in the dealings in or holding of investments	 and at the rate of four annas in he rupee in the case of any other company	 on the undistributed balance of the total income of the previous year	 that is to say	 on the total income reduced by the amounts of income tax and super tax and any other tax payable under any law in excess of the amounts allowed in computing the income	 and in the case of Banking companies in addition to the taxes	 funds actually transferred to a reserve fund	 and the dividends actually distributed	 if any	 where in respect of any previous year the profits and gains distributed as dividend by the company within the twelve months immediately following the expiry of that previous year were less than 60% of the total income of the company of that year as reduced by the amounts aforesaid	 unless the Income tax Officer was satisfied that having regard to losses incurred by the company in earlier years or to the smallness of the profits made in the previous year	 the payment of a dividend or a larger dividend than that declared would be unreasonable. It is manifest that the order under section 23A(1) would (excluding certain procedural conditions) be ordinarily made if the company has distributed by way of dividend within the twelve months immediately following the expiry of the accounting year less than the prescribed percentage of the total income as reduced by the	 amount of taxes paid in the case of non Banking Companies and reserve fund in addition thereto in the case of Banking Companies 771 By the first paragraph of sub section (9) of section 23 A it is provided that "Nothing contained in this section shall apply to any company in which the public are substantially interested or to a subsidiary company of such company if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year. " This clause is followed by two explanations. Explanation 1	 in so far as it is material to this case	 provides : "Explanation 1 For the purposes of this section	 a company shall be deemed to be a company in which the public are substantially interested (a) x x x x (b) if it is not a private company as defined in the Indian Companies Act	 1913 (VII of 1913)	 and (i) x x x x (ii) x x x x (iii) x x x x Explanation 2. x x x x" Section 23A was enacted to prevent evasion of liability to pay super tax by shareholders of certain classes of companies taking advantage of the disparity between the rates of super tax payable by individuals and by the companies. The rates of super tax applicable to companies being lower than the highest rates applicable to individual assessees	 to prevent individual assessees from avoiding the higher incidence of super tax by the expedient of transferring to companies the sources of their income	 and thereby securing instead of dividends the benefit of the profits of the company	 the Legislature had by Act XXI of 1930	 as modified by Act VII of 1939	 enacted a special 772 provision in section 23A investing the Income tax Officer with power	 in certain contingencies prescribed in the section to order that the undistributed balance of the assessable income reduced by the amount of taxes and the dividends shall be deemed to have been distributed at the date of the general meeting. By the Finance Act 15 of 1955 section 23A (1) was amended and the Income tax Officer was directed to make an order that the Company shall be liable to pay super tax oil the undistributed balance at the rates prescribed under the section. But by virtue of sub. section (9) of section 23A the or der can be made only in respect of a company in which the public are not substantially interested or of a subsidiary company of such company if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year	 and by cl. (b) of the first explanation thereto a private company as defined in the Indian Companies Act	 1913	 is not a company in which the ' public are substantially interested. It is	 therefore	 competent to the Income tax Officer to pass an order under section 23A (1) if the conditions thereof are fulfilled directing payment of super tax by a private company at the rates prescribed by the Finance Act 15 of 1.955 on its undistributed balance. To reduce the rigour of this provision the Legislature has provided for inducement in the form of rebate on the difference between nine annas in every rupee of the total net income	 and the amount of dividend declared	 to companies which have declared dividends so as not to attract the application of an order under section 23A. But that benefit is admissible only in favour of companies to which the provisions of section 23A of the Act cannot be made applicable. The Income tax authorities held that the expression company to which the provisions of section 23A of the Income tax Act cannot be made applicable ' is descriptive of a class of companies against which in no circumstances can an order under section 23A of the 773 Indian Income tax Act be made	 and private limited companies being companies in respect of which an order under section 23A of the Income tax Act can be made if the conditions prescribed relating to distribution of dividend are fulfilled	 the benefit of rebate is not admissible in their favour. The Tribunal and the High Court held that the expression " 'cannot be made applicable" only refers to a state of affairs in which having regard to the circumstances an order under section 23k of the Indian Income tax Act cannot be made. In our judgment the Income tax Appellate Tribunal and the High Court were right in so holding. The Legislature has used the expression "cannot be made applicable" which clearly means that the applicability of section 23A depends upon an order to be made by the Income tax Officer	 and not upon any exclusion by the provisions of the Act. Before an order can be made under section 23A of the Income tax Act	 the Income tax Officer has to ascertain (i) whether the company conforms to the description in sub section (9) of section 23A; if it does ' the lncome tax Officer has no power to make an order ; and (ii) if the company is not one which falls within cl. (9) of section 23A whether having regard to inadequacy of the declaration of dividend	 an order for payment of super tax should not	 because of the losses incurred by the company in the earlier years	 or to the smallness of the profits in the previous year	 be made. Satisfaction of the Income tax Officer as to the existence of several conditions prescribed thereby even if the company is one which does not fall within sub section (9) of section 23A is a condition of the making of the order. The language used by the Legislature clearly indicates that it is only when an order under section 23A will not	 having regard to the circumstances ' be justified that the right to obtain rebate under the Finance Act 15 of 1955 is claimable. The Legislature has not enacted that the benefit of rebate is admissible only to companies against which the order under sub section (1) of section 23A can never be made. 774 The Legislative history as disclosed by the earlier Finance Acts supports this interpretation of the relevant provision. In the Finance Acts prior to 1955 rebate under Part I of the 1st Schedule Item B was admissible if the company had in respect of profits liable to tax under the Indian Income tax Act made the prescribed arrangements for declaration and payment of dividends payable out of the profits and had deducted super tax from the dividends in accordance with section 18(3D) & (3E)	 where the total income reduced by seven annas in the rupee ' and the amount exempt from income tax exceeded the amount of any dividends declared and no order had been made under sub section (1) of section 23A of the Income tax Act. The right to rebate arose under those Finance Acts if no order under section 23A was made. The Income tax Officer had therefore to decide even before completing the assessment of the company whether the circumstances justified the making of an order under section 23A	 and unless an order under section 23A was made the assessee became entitled automatically to the rebate of one anna in the rupee. Such a provision led to delay in the disposal of assessment proceedings and caused administrative inconvenience. It appears that the Legislature modified the scheme of granting rebate in enacting the Finance Act of 1955 with a view to simplify the procedure and avoid delays	 and not with the object of depriving the private limited companies as a class	 of the benefit of rebate which was permissible under the earlier Acts. Counsel for the Income tax Commissioner invited our attention to the Finance Acts of 1956 and 1957 and contended that the Legislature in dealing with the right to rebate under Part II relating to the rates of super tax used phraseology which restricted the right of rebate only to public companies. Ie must be noticed that even under the Finance Act of 1955 by Part II of Schedule 1	 item D	 a rebate of three annas per rupee of the total income was to bf 775 allowed to companies in respect of profits liable to tax under the Income tax Act for the year ending March 31	 1956	 if the company had made prescribed arrangements for payment of dividend payable out of profits and for reduction of super tax from dividends in accordance with the provisions of sub section 3D of section 18 of the Act and the company was a public company with a total income not exceeding Rs. 25	000/ . This provision was slightly modified in the Finance Act of 1956 where the rebate admissible was at the rate of five annas in the rupee	 (other condition being fulfilled) if the company was a public company with total income not exceeding Rs. 25	000/to which the provisions of section 23A could not be made applicable. Under the Finance Act of 1957 rebate was admissible in favour of companies "referred to in sub section (9) of section 23A of the income tax Act with total income not exceeding Rs. 25	000/ . " All these provisions about rebate were enacted in prescribing the rates of super tax. In the Finance Act of 1955 the Legislature in dealing with the right of rebate under Part I prescribing rates of income tax	 made it admissible in respect of companies to which provisions of section 23A of the Income tax Act could not be made applicable	 whereas under Part II prescribing rates of super tax	 rebate was made admissible in respect of public companies having income not exceeding the prescribed amount and rebate at a lower rate where the income exceeded the prescribed limit. If it was intended by the Legislature to exclude private limited companies from the benefit of rebate the Legislature would have adopted the same phraseology as was used in that Act in dealing with the rebates in prescribing rates of super tax. The legislative history instead of supporting the case of the Income tax Department yields inference against their interpretation. We are therefore of the view that the High Court was right in holding that the company was 776 entitled to the rebate claimed by it. The appeal therefore fails and is dismissed with costs. Appeal dismissed.

For the year of account ending March 31	 1955	 the appellant	 a private limited company	 earned a total income of Rs. 49	843. The company declared a ' dividend of Rs. 11	712 on July 13	 1955	 and before the close of the year of assessment 1955 55 declared an additional dividend of Rs. 5	612	 thereby distributing in the aggregate dividend which was not less than 767 60% of the total income	 reduced by the income tax and supertax payable by it. The company then claimed rebate at the rate of one anna in the rupee on the amount computed according to Sch. 1	 Part 1	 Item B	 read with section 2 of the Finance Act	 1955. The Income tax authorities rejected the claim on the ground that the expression "company to which the provisions of section 23A of the Income tax Act cannot be made applicable" in the provision of law aforesaid in the Finance Act	 1955	 on which the appellant company relied	 referred to a company against which in no circumstances could an order under section 23A be made	 and private limited companies being companies in respect of which an 'order under section 23A could be made if the conditions prescribed relating to distribution of dividend were fulfilled	 the benefit of rebate was not admissible in favour of the appellant company. The Appellate Tribunal and the High Court took the view that the benefit of a rebate provided by the Finance Act could not be denied to a private company if the conditions prescribed in section 23.A(1) of the Income tax Act were fulfilled	 because	 according to their view	 the expression "can not be made applicable" only refers to a state of affairs in which having regard to the circumstances an order tinder section 23A could not be made. Held	 that the appellant company was entitled to the rebate claimed by it. The expression "to which the provisions of section 23A of the Income tax Act can not be made applicable" in Sch. 1	 Part 1	 Item B	 of the Finance Act	 1955	 meant that the appli cability of section 23A of the Income tax Act depended upon an order to be made by the Income tax Officer	 and not upon any exclusion by the provisions of the Act. It was only when an order under section 23A would not	 having regard to the circumstances	 be.justified that the right to obtain rebate under the Finance Act was claimable.