1. In this reference made by the Commissioner of Agricultural Income-tax under section 55 (2) of the Mysore Agricultural Income-tax Act, 1957 (Mysore Act XXII of 1957), at the instance of the assessee, there are three questions of law before us.
2. The reference was made in the following circumstances :
3. The financial year in respect of which the assessment was made by the Agricultural Income-tax officer was the year 1957-58 and the corresponding previous year was the period commencing on June 1, 1956, and ending on May 31, 1957. The agricultural Income-tax Officer made an assessment under the Mysore Agricultural Income-tax Act, 1955 (Mysore Act IV of 1955) which will be referred to as the old Act.
4. Section 3 of the 1957 Act which will be referred to as the new Act, is the charging section, and the charge under that section is on agricultural income in respect of every financial year commenting from the first April, 1957, 'Financial year' is defined by section 2 (1) (k), which reads :
''Financial year' means the year beginning on the 1st April and ending on the 31st March next following.'
So, it is clear that the charge of income of income-tax on agricultural income under the new Act took within its orbit agricultural income earned by the assesses in the case before us during the previously year commencing on June 1, 1956, and ending on May 31, 1957. So it was contended on behalf of the assessee that the assessment can be made only under the new Act and not under the old Act.
5. The Deputy Commissioner confirmed the order of the Income-tax Officer in the appeal; preferred by the assessee, and, in that situation, the assessee asked for a reference under section 55 (2) of the new Act as it then stood.
6. The Commissioner of Agricultural Income-tax did not very clearly refer those question of law to us as he should have done, under that sub-section, which require him to draw up a statement of the case and refer it with his own opinion thereon to the High Court. That requirement of the sub-section means that there should be a statement of the case in thick the Commissioner should incorporate the questions of law to be decided by this court and refer that statement together with his opinion for our decision.
7. We find among the papers transmitted to us by the Commissioner, a statement of the case along with the opinion of the Commissioner. We find in another part of the record an enumeration of the questions of law, which the assessee. According to the Commissioner, had 'raised'. The Commissioner did not himself in his statement formulate any question of law for our decision. What the commissioner should have done was to set out in the statement of the case, the question of law to be answered by us, remembering that what could be referred to us for decision is the question of law arising out of the order to which section 55 (2) refers.
So, there should be in the first instance a scrutiny by the Commissioner in to the questions of law which the assessee wishes to be referred for ascertaining whether those question of law arise out of an order under section 32 or section 34 or section 35. If the question which the assessee wishes to be answered does not arise out of these three sections, the Commissioner should declaim to refer it for our decision.
8. It is, however, clear, notwithstanding the imperfection in the statement of the Commissioner which has been referred to us, that the Commissioner was of the opinion that ask the three question which the assessee set out in this application should be answered by us, and those questions read :
'(1) In view of the decision of the Mysore High court dated July 30, 1962, in Writ Petition No. 432/1961 (Bombay Burmah Trading Corporation v. State), where the assessment for the previous year ended May 31, 1957, is possible under the Mysore Agricultural Income-tax Act, 1955, inasmuch as the land from which the income was derive a was situated in the new State of Mysore during the period from November 1, 1956, to May 31, 1957
(2) In view of the decision of the Mysore High Court in Writ Petition No. 224/1959 (herein Rao Maloji Rao. State of Mysore) whether it would be correct to say that for the period from June 1, 1956, to October 31, 1956, no assessment is possible under the Mysore Agricultural Income-tax Act, no assessment is possible under any Mysore Agricultural Income-tax Act, 1955, and for the period from November 1, 1956, to May 31, 1957, also no assessment under the Mysore Agricultural Income-tax Act, 1957
(3) Where the assessment order passed by the agricultural Income-tax officer, Bangalore sub-division, in No. A. I. T. Asst. 4/1960-61 dated 18th August, 1961, for the previously year ended May 31, 1957, in the assessee's case is to be set aside in its entirety in view of the decision of the Mysore High Court dated May 20, 1962 in Writ Petition No. 1416/1960 (K. V. Keshava Murthy Chetty v. Agricultural Income-tax Officer, Chickmagalur) ?'
9. The order which was made in this case out of which any question of law could arise is one made under section 32 and that order is an order in appeal made by the Deputy Commissioner in respect of the assessment fir the year which commenced on June 1, 1956, and ended on May 31, 1957. The real question which is before us is whether the assessment should have been made under the new act and not under the old. Although there are three question before us, which are couched in extremely obscure phraseology, it is the same matter over and over again out in different form.
10. It is, in our opinion, very clear from the provision of section 3 of the new Act that in respect of the financial year commending on April 1, 1957, it is the new Act which chargers income-tax upon agricultural income and so the assessment in respect of that financial year is possible only under the new Act and not under the old. That was the view taken by this court on art least two occasions in Bhairao Rao Maloji Rao Ghorpade v. Agricultural Income-tax Officer and in Mallikarjunappa v. Agricultural Income-tax Officer.
11. Mr. Shantaraju, the learned Government Pleader, point out to us that between the dates of these two pronouncements, a view to the contrary was taken in W. P. No. 432 of 1961 (Bombay Burmah Trading Corporation v. State) and W. P. No. 1416 of 1960 (K. V. Keshav earthy Chetty v. Agricultural Income-tax Officer, Chickmagalur). It is not very clear from the pronouncements in those writ petitions whether any enunciation was made on those two occasions contrary to that made in Ghorpade case, and Mallikarjunappa's case. But the meaning of the decisions in Ghorpade's case, and Mallikarjunppa's case, is unmistakable. The view expressed in both these cases is that in respect of the financial year commencing on April 1, 1957, in respect of which income-tax was charged on agricultural income for the first time under the new Act, an assessment is possible only under the new Act. In Mallikarjunappa's case, this court pointed out that, in view of the express provisions of section 3 of the new Act, the assessment made under the old Act was invalid. That being the latest pronouncement with which we entirely agree, our answers to the questions before us should therefore been in favour of the assessee in respect of that matter.
12. We, therefore, answer the question before us thus :
(1) Our answer to the first question is that the assessment in respect of the previous year ending on May 31, 1957, was not possible under the Mysore Agricultural Income-tax Act, 1955. The other part of the question, which concerns itself with the situation of the land, does not arise out of the order made under section 32, and so we decline to answer it.
(2) Our answer to the second question is that the assessment for no part of the period commencing on June 1, 1956, and ending on May 31, 1957, was possible under the old Act. We do not answer the other part of the second question which is not properly before us.
(3) Our answer to the third question is that, since the assessment was made under the old Act, it is liable to be set aside in its entirety.
13. In the circumstances, we make no direction in regard to costs.