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Subramania Iyer Vs. Inspecting Assistant Commissioner of Agricultural Income-tax and Sales Tax. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberWrit Appeal No. 23 of 1902
Reported in[1964]53ITR589(Ker)
AppellantSubramania Iyer
Respondentinspecting Assistant Commissioner of Agricultural Income-tax and Sales Tax.
Cases ReferredC. A. Abraham v. Income
Excerpt:
- - according to sub-section (4) the agricultural income-tax payable by a family like that of the appellant should be assessed at the average rate applicable to the share of income due to a brother or to six thousand rupees whichever is higher. if it is desired that super-tax should be charged in cases like the one before us, the remedy is in the hands of the government themselves......any hindu undivided family, an additional duty of the agricultural income-tax or super-tax at the rate or rates laid down in part ii of the schedule to the act. section 57 provides that subject to the provisions of chapter ix the total income of any hindu undivided family shall, for the purposes of super-tax be the total agricultural income as assessed for the purposes of agricultural income-tax, section 58 days :'58. all the provisions of this act relating to the charge, assessment, collection and recovery of agricultural income-tax except those contained in sub-section (i) of section 3 and clauses (c) and (e) of section 10 shall apply so far as may be to the charge, assessment, collection and recovery of super-tax'.the order of assessment made the undivided hindu family liable for a.....
Judgment:

M. S. MENON C.J. - The petitioner in O.P. No 191 of 1962 is the appellant before us. The controversy relates to the assessment of the undivided Hindu family to which the appellant belongs, to super-tax under the Agricultural Income-tax Act, 1950.

The assessment year is 1959-60. The assessment order dated 29th November 1961, fixed the net assessable income of the undivided Hindu family at Rs. 1,50,429.

Section 3(4) of the Agriculture Income-tax Act, 1950, provides :

'In the case of an undivided Hindu family consisting of brothers only or of a brother or brothers and the son or sons of a brother or brothers and whose agricultural income exceeds six thousands rupees, the tax shall be assessed at the average rate applicable to the share of income due to a brother or to six thousand rupees, whichever is higher.

Explanation. - For the purposes of this sub-section -

(a) the expressions share of income due to a brother means the portion of the total agricultural income of the family which would have accrued to a brother, if a partition of the assets had been effected according to law on the day before the assessment is made; and

(b) son includes a sons son.'

The appellants undivided family consisted of brothers only, that is, of himself and his seven brothers.

According to sub-section (4) the agricultural income-tax payable by a family like that of the appellant should be assessed at the average rate applicable to the share of income due to a brother or to six thousand rupees whichever is higher. In this case the share of income due to each of the brothers amounted to Rs. 18,804 and the agricultural income-tax payable by the undivided Hindu family calculated at the average rate applicable to the share income due to a brother in accordance with Part I of the Schedule to the Act came to Rs. 20,608. It is common ground that the calculation is correct and requires no modification.

Chapter IX of the Act deals with super-tax. It consists of three sections, sections 56,57, and 58. The relevant promotion of section 56 provides that in addition to the agricultural income-tax charged for any ar, there shall be charged, levied and paid for that year in respect of the total agricultural income of the previous year of any Hindu undivided family, an additional duty of the agricultural income-tax or super-tax at the rate or rates laid down in Part II of the Schedule to the Act. Section 57 provides that subject to the provisions of Chapter IX the total income of any Hindu undivided family shall, for the purposes of super-tax be the total agricultural income as assessed for the purposes of agricultural income-tax, Section 58 days :

'58. All the provisions of this Act relating to the charge, assessment, collection and recovery of agricultural income-tax except those contained in sub-section (I) of section 3 and clauses (c) and (e) of section 10 shall apply so far as may be to the charge, assessment, collection and recovery of super-tax'.

The order of assessment made the undivided Hindu family liable for a super-tax of Rs. 37,473.89nP. Part II of the Schedule to the Act lays down the rates of super-tax. The rate of super-tax laid down therein on the first Rs. 25,000 of the total agricultural income is nil. The contentions of the appellant - negatived in the order of appeal-are :

(a) that section 3(4) of the Act is attracted to section 56 by virtue of section 58 of that Act.,

(b) that as a result super-tax has to be calculated on the total agricultural income of the family at the rate applicable to the share of that income due to a brother, namely Rs. 18,804; and

(c) that as no rate of super-tax is laid down in the schedule for agricultural incomes of Rs. 25,000 and below, the appellants family cannot be assessed to super-tax in the assessment year with which we are concerned.

The real question for consideration is the true scope and effect of section 58. It says that all the provisions of the Act relating to the charge, assessment, collection and recovery of agricultural income-tax except those excluded by that section shall apply so far as may be to the charge, the assessment, collection and recovery of super-tax. Sub-section (4) of section 3 is not one of the provisions excluded, and the only question, therefore, is whether the invocation of that sub-section in matters of super-tax is precluded by words 'so far as may be' which occur in section 58.

The words 'so far as may be' occurring in section 44 of the Indian Income-tax Act, 1922, came up for consideration in C. A. Abraham v. Income-tax Officer That section at the material time read as follows :

'Where any business, profession or vocation carried on by a firm or association of persons has been discontinued, or where an association of persons is dissolved, every person who was at the time of such discontinuance of dissolution a partner of such firm or a member of such association shall, in respect of the income, profits and gains of the firm or association, be jointly and severally liable to assessment under Chapter IV and for the amount of tax payable and all the provisions of Chapter IV shall, so far as may be, apply to any such assessment.'

The Supreme Court said :

'By the use of the expression so far as may be it is merely intended to enact that the provisions in Chapter IV which from their nature have no application to firms will not apply thereto by virtue of section 44.'

We do not see anything in section 3(4) of the Agricultural Income-tax Act, 1950, which by its nature precludes the application of the sub-section to the charge of super-tax. The contention of the department is that the rule of harmonious construction requires us to say that sub-section (4) of section 3 is not attracted to section 56. We discern no dissonance; there is nothing in congruous in saying that the rate of super-tax on the total agricultural income of an undivided Hindu family consisting of brothers only shall be calculated in the same way as the rate of agricultural income-tax on the said income of the family is calculated.

If it is desired that super-tax should be charged in cases like the one before us, the remedy is in the hands of the Government themselves. All that they have to do is to alter Part II of the Schedule and provide a rate of super-tax for incomes of Rs. 25,000 and below in exercises of the powers conferred by section 70 of the Act which says :

'The Government may make rules altering, adding to or canceling the Schedule to this Act.'

In the light of what is stated above the appeal has to be allowed and we do so with costs, advocates fee Rs. 100.


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