Walter Salis Schwabe, K.C., C.J.
1. This reference, under Section 51 of the Income Tax Act and Section 6 of the Super Tax Act now in force, is as to 'whether an adjustment can be made during a financial year in which the Collector's certificate of Registration under Section 12A is in force in respect of the income of a firm for the previous year in which the Firm was not registered.' In my judgment it clearly can. The whole scheme of income tax and super-tax in this country is based on the principle that the tax is assessed at the beginning of the year on an anticipated income and is paid in anticipation on the assessment; but when the year is over and the actual earnings have been discovered, there is not a fresh assessment but an adjustment. As far as super tax is concerned a registered firm is exempt from supertax as a firm, although the partners are personally liable for super-tax, if their separate incomes are large enough to bring the provisions of the Super-tax Act into operation against them.
2. In the year 1920-21 this firm of Messrs Muhammad Sheriff Hussain Meah Sahib and Company, through carelessness or for some other reason which I am not able to appreciate, having made its return for the assessment purposes at Rs. 90,000, omitted to get registered in time to take advantage of the exemption granted to registered firms. At the end of the year or the begining of the next year in due course there was an adjustment, because it turned out that the profits were Rs. 1,37,000 instead of Rs. 90,000. It is contested that adjustment cannot be made because under Section 19 of the Income-tax Act, VII of 1918 'When the Collector has, in any year after the commencement of this Act for which income-tax is leviable, ascertained the total income actually received' is said to mean in any year in which Super tax is leviable and it is argued that, as this firm was registered in the following year, i.e., 1921-22, and therefore escaped from super-tax that year, the Collector has no power to call for an adjustment for the preceding year. In my judgment that is an entire misinterpretation of the section. The section simply means that, if at the end of the year it is found that the amount at which the income was assessed has been either exceeded or reduced, there is a right and a duty to deal with the matter accordingly. For the year in question this firm was not registered, and not being registered they must be dealt with on an adjustment in the same way in which they were dealt with on assessment, and as the amount on which they have to pay is the amount actually earned in 1920-21 and not the anticipated earnings for that year.
3. It follows that the answer to the question is in the affirmative.
4. The costs of the reference shall be paid by the assessee and slick costs shall include the Government Pleader's fee. The Taxing Officer will fix a reasonable fee under the terms of Rule 38 of the Appellate Side Fees Rules which is in these words: 'In cases in which the subject matter of the claim does not admit of valuation, the court, or in the case of the High Court, the Taxing Officer shall fix a reasonable fee, regard being had to the time occupied in the preperation and hearing of the case and the nature of the questions raised therein as also to the minima fees prescribed by Rule 31'. It cannot be right that there should be a fixed amount payable to the Government Pleader as fee in respect of a case which may last a week and may take days for preparation and that the same fixed amount should be payable in respect of a case like this which cannot take very long to read and prepare for argument and it cannot be right that the assessee who has a small case is to pay an unnecessarily large fee to the relief of an assessee who has a large case.
5. I agree.
Coutts Trotter, J.
6. I agree.