1. The question which the. Board was directed to refer is whether in the circumstances, the Collector of Malabar had jurisdiction to assess the petitioner. Now the income which is taxable under the Act is, as provided in Section 3,
All income from whatsoever source it is derived if it accrues or arises or is received in British India or is under the provisions of this Act, deemed to accrue or arise or to be received in British India.
2. And under Section 33(1), in the case of any person residing out of British India:
All profits or gains accruing or arising to such person whether directly or indirectly through or from any business connexion in British India shall be deemed to be income accruing or arising in British India.
and is consequently taxable under the express provisions of Section 3. It makes no difference with regard to this section whether the non-resident entitled to the income is a British subject or a foreigner; in either case he is chargeable with the tax in British India. It has, however, been argued that because Section 33(1) not only provides that such profits and gains shall be deemed to be income accruing or arising within British India but goes on to provide that they:
shall be chargeable to income-tax in the name of the agent of any such person, and such agent shall be deemed to be the assessee in respect of such income-tax,
the profits and gains in question are not chargeable unless they are assessed to income-tax in the name of an agent of the non-resident. This construction is not supported by the proviso immediately following:
Provided that any arrears Of tax may be recovered also in accordance with the provisions of this Act from any assets of the non-resident person, which are or may at any time come within British India.
which supports the construction that the profits or gains are chargeable if they can be got at in British India whether they are assessed in the name of an agent of the non-resident or not. This was expressly decided on the corresponding section of the English Act by Mathew and A.L. Smith, JJ., in Tischler v. Apthorpe (1885) 52 L.T., 814, which was approved by the Court of Appeal in Werle & Co. v. Colquhoun (1888) 20 Q.B.D., 753, and it was held that a non-resident who had been himself assessed whilst in England had been properly assessed. All that the latter part of the section does is to provide machinery by which the tax can be levied where the non-resident cannot himself be got at.
3. In the present case, the petitioner resides and has his principal place of business in the Cochin State in Mattancherri, which adjoins British Cochin and practically forms one town with it, and the petitioner not only does a large part of his business in British Cochin as stated in the reference, but also accepted notices and submitted the necessary returns to the Collector of Malabar, of which British Cochin forms a part for income-tax purposes. The reference states that:
Contracts for the. supply of goods are entered into and signed at the offices of firms in British Cochin and the goods are delivered at the jetties of the purchasers: the sale-proceeds are paid to the firm's agent or other duly authorized servant in cash in British India or by cheques which are cashed in Banks in British India.
4. In these circumstances, it seems clear that these are profits and gains arising to the petitioner through or from his business connexions in British India in respect of which he is assessable under the Act. The petitioner never set up the case that his principal place of business in British India was situate in Bombay and that therefore even as regards his gains and profits in British Cochin he ought to have been assessed by the Collector of Bombay by virtue of the definition of Collector in Section 2(5). His case was that the business in Bombay was carried on by another firm in which he was merely a partner and that there were no assessable profits or gains arising to him in British Cochin. If there were, he did not dispute the right of the Collector of Malabar to assess him in respect of them. On the contrary he submitted the necessary returns to the Collector of Malabar and did not raise this point either before the Collector or on his appeal to the Board of Revenue nor is it dealt with either in the order directing the reference or in the reference itself. In these circumstances it is not open to him to raise this question now, and it is unnecessary for us to consider it. The petitioner must pay the costs of the reference, Rs. 250.