Govinda Bhat, J.
1. These are two revision petitions preferred by an assessee under the Mysore Agricultural Income-tax Act, 1957, hereinafter called 'the Act'. They relate to the assessment years 1964-65 and 1965-66.
2. The assessee grows coffee, areca and mangoes. The method of accounting regularly employed the assessee in cash basis. The assessing authority, while assessing the income for the assessment years prior to 1964-65, had computed the assessee's income from coffee crop on the basis of valuation on the points declared by the Indian Coffee Board in respect of such crop under the 2nd proviso to section 7 of the Act. For the assessment years 1964-65 and 1965-66 and the assessee submitted returns of his income on the cash basis of accounting but the assessing authority, while accepting the income in respect of areca and mangoes on the cash basis, computed the income from coffee crop in accordance with the 2nd proviso to section 7 as in the earlier assessments. The reason given is that since the assessment for the previous years was concluded on mercantile basis of accounts, it has to be continued as such. In the appeals preferred, the Deputy Commissioner rejected the contention of the assesee that his income should be computed on the cash basis of accounting employed. The Deputy Commissioner observed that the assessment were made by the consent and that the assessee having consented to the particular made of assessment, it was not open to him to prefer an appeal or revision against the consent orders. The Appellate Tribunal dismissed the appeals on two grounds, viz., (1) that in all the previous years prior to the relevant assessment years, the assessee's income was assessed on the mercantile basis, and (2) that the 'point basis' was adopts after obtaining the consent of the assessee thereto. The relevant portion of the Tribunal's order reads thus :
'It is not disputed in these cases that for purposes of assessments all the years prior to the period to the periods under consideration, incomes were arrived at by the assessing officer on mercantile basis. And the same method has been followed in concluding the assessment for the present year too. In these circumstances, we are of the opinion that the learned Agricultural Income-tax Officer has carefully applied his mind to the possibility otherwise of the income being properly deduced from the year to year from method of accounting adopted and has therefore concluded that for purpose of computation of incomes even for the years under consideration the mercantile basis of computation should be followed. Apart from the other point that assessment to concluded have been concluded that after the consent of the party thereto, we are of the opinion that the learned assessing officer has rightly concluded that the assessment should properly be made even in the present years by adopting mercantile basis of computation whereby the incomes assessable would properly be arrived at, the assessee being one whose income for the prior years have been deduced on the mercantile basis alone despite the fact that the accounts have been or might have been maintained on cash basis.'
3. If the assessing authority had stated in his order that in his opinion the income from coffee cannot properly be deduced on the basis of the method of accounting adopted by the assessee, the order of the Tribunal could have been sustained. We asked the learned High Court Government Pleader to point out if the assessment authority. He rightly conceded that the assessing authority has not so stated.
4. Sri K. Srinivasan, learned counsel for the assessee, urged that the assessing authority has to be of the opinion that the agricultural income of the assessee for the relevant assessment years cannot properly be deduced from the method of accounting employed for not computing the income otherwise than in accordance with the method of accounting employed. That submission of the learned counsel, in our opinion, is well founded.
5. Section 7 of the Act, which is the relevant section, reads thus :
'7. Method of accounting. - Agricultural income shall be computed for the purpose of section 5 and 6 in accordance with the method of accounting regularly employed by the assessee :
Provided that if no method of accounting has been regularly employed by the assessee, or if the method employed is such that in the opinion of the Agricultural Income-tax Officer, the agricultural income cannot properly be deduced therefrom, then the computation shall be made upon in such manner as he may determine : Provided further that in the case of coffee crop of an assessee, the agricultural income therefrom may be computed on the basis of valuation of point declared by the Indian Coffee Board in respect of such crop.'
6. The above provision, except the second proviso, is in pari materia with section 13 of the Indian Income-tax Act, 1922. It is settled laws that under section 13 of the Indian Income-tax Act, 1922, the assessing authority cannot reject the income computed in accordance with the method of accounting regularly employed by the assessee unless he is of the opinion that the income cannot properly be deduced therefrom. That is the condition precedent to the exercise of jurisdiction to reject the income computed in accordance with the method of account in regularly employed by the assessee.
7. In the instant case, as stated earlier, the assessing authority was not expressed his opinion that the agricultural income of the assessee derived from his coffee crop cannot properly be deduced on the cash system of accounting regularly employed. It was, however, contended by the learned High Court Government Pleader that the condition required under the first proviso to section 7 is inapplicable in the case of coffee crop which comes under the second proviso, that in the case of coffee crop, the assessing authority has the absolute discretion to compute the agricultural income on the 'point basis' without being unrequired to form the opinion that the agricultural income cannot properly be deduced by accepting the method of accounting regularly employed by the assessee. We are unable to accept that contention. It is settled law that 'the effect of an excepting or qualifying proviso, according to the ordinary rules of construction, is to except out the preceding portion of the enactment, or to quality something enacted therein, which but for the proviso would be within it'. (Vide Craies on Statute Law, 6th edition, page 217). The body of section 7 makes its mandatory that the agricultural income shall be computed for the purpose of section 5 and 6 in accordance with the method of accounting regularly employed by the assessee. The two provisos qualify the main provision. The first proviso governs the case of all inclusive of coffee. In the case of all crops except coffee, in the opinion of the assessing authority, if the agricultural income cannot properly be deduced from the method of accounting employed by the assessee, then the computation can be made upon such basis and such manner as the assessing authority determine. The basis of computation is thus left to the discretion of the assessing authority. But in the case of coffee crop, the legislature has not left the basis of computation to the discretion of the assessing authority bus has provided that where action is taken under the first proviso, the computation of the income of the coffee crop shall be on the basis of valuation of pointed declared by the Indian Coffee Board in respect of such crop. This made of valuation is commonly know as the valuation of 'point basis'. This interpretation of section 7 finds ample support for rule 9 of the Mysore Agricultural Income-tax Rules, 1957 (hereinafter called 'the Rules'), made by the State Government in exercise of the power conferred by section 63. The rules were laid before both the Houses of the State Legislature as required under section 63(3) of the Act and therefore from part of the Act. Rules 9 reads thus :
'9. Method of accounting : - Where no method of accounting has been regularly employed by the assessee or where the method employed is such that in the opinion of the Agricultural Income-tax Officer the agricultural income cannot be properly deduced therefrom, the Agricultural Income-tax Officer shall, after making such enquiry, as he considers necessary, compute the agricultural income of the assessee as under.....
(c) in the case of coffee crop of the previous year the cash amount received with in the accounting periods in respect of the crop grown and consigned by the assessee to the Coffee Board or the estimated value of such crop shall be taken into account as the income of the year according to the method of accounting regularly employed by the assesse :
Provided that in case the valuation made is considered to be at too lows at a rate, the Agricultural Income-tax Officer shall take into consideration the declared rates by the Coffee Board for the year to represent the proper value for the purpose of assessment : Provided further that any receipt in respect of the earlier season's coffee crop received during the accounting period in excess of the amount already taken into consideration in the assessment of preceding years shall be consider as the income of the previous year.'
8. Clause (c) of rule 9 elaborately provides for the method of computing the income of derived from coffee crop of an assessee, but the provision of clause (c) of rule 9 can be employed only where no method of accounting has been regularly employed by the assessee or where the method employed in such that, in the opinion of the Agricultural Income-tax Officer, the agricultural income cannot properly be deduced therefrom.
9. The Deputy Commissioner as also the Tribunal are wholly in error in a stating that the assessee had consented for the valuation on 'points basis'. The learned High Court Government Pleader, at our request, placed the records of the assessment proceedings. All that is seen is that the signature of the assessee was obtained to the assessment orders. There is nothing to show that the assessee had consented to the computation of his income on 'points basis'. If in fact he had consented for the course adopted by the assessing authority, such consent should have been specifically recorded and signature obtained.
10. For the reasons stated above, these revision petitions are allowed and we reverse the order of the Sales Tax Appellate Tribunal in A.I.T.A.Ps. Nos. 35 and 36 of 1968 dated June 12, 1968. The assessing authority is directed to redo the assessments for the relevant assessment years on the basis of the method of accounting regularly employed by the assessee by the assessee.
11. The assessee is entitled to his costs. Advocate's fee Rs. 100, one set.