Alfred Henry Lionel Leach, C.J.
1. The assessee is the widow of the late Raja Ramanatha Reddiar, and is the administratrix of his estate. Chidambaram Reddiar, the father of Raja Ramanatha Reddiar, founded a business in Rangoon and this was carried on by his son after his death. The late Raja died in Rangoon in 1932, possessed of large assets some of which were in Burma and some in the Madras Presidency. The assets in the Madras Presidency included immovable property in the Trichinopoly District. Raja Ramanatha Reddiar had previously married One Parvathi Ammal, who in 1915, purchased a house in Srirangam. This house has been regarded as ancestral property and is reserved for the occupation of the assessee during her occasional visits to the Presidency. She stayed there in 1934, 1936 and again 1937, each time making a stay of more than three months. For the year of assessment 1939-40 the assessee made a return of the ' income of the estate to the Income-tax Officer, Salem, and in this she showed an income of Rs. 65,276 from money-lending in British India and Rs. 14,950 as remittance of profits brought into British India from Rangoon. She contended that she was not resident in British India, but this contention the Income-tax Officer overruled. He held that she was resident in British India within the meaning of Sections 4-A (a) (ii) and 4-A (a) (iii) of the Indian Income-tax Act. Section 4-A (a) (ii) was held to apply as she had maintained a dwelling house in Srirangam throughout the year previous to the year of assessment. It was held that Section 4-A (a) (iii) applied because she had been in Rangoon for a period amounting to more than 365 days in the four years preceding the year of account. Burma was part of British India until the 1st April, 1937, when it became separate by reason of the provisions of the Government of India Act, ,1939. The Income-tax Officer further held that the assessee was 'ordinarily resident' in British India within the meaning of Section 4-B as she had been in Rangoon in nine out of the ten years preceding the year of account and as she had also been in Rangoon for a period amounting to more than two years in the seven years preceding that year. The result was that the Income-tax Officer assessed the assessee for the year 1939-40 on a total income of Rs. 1,15,180 of which Rs. 70,458 was regarded as income earned in British India and Rs. 44,722 as income earned in Burma. The Appellate Assistant Commissioner confirmed the order of the Income-tax Officer, and at the request of the assessee the Commissioner has referred to this Court under the provisions of Section 66 (2) the following questions:
(i) Whether for the purpose of Section 4-A (a) of the Indian Income-tax Act being in Burma during any periods prior to 1st April, 1937, when Burma was part of British India amounts to being in British India during those periods.
(ii) If the answer to the first question be in the affirmative whether on, the facts of this case the petitioner can be found to be resident and ordinarily resident in British India for the year of assessment 1939-40.
Under the Indian Income-tax Act a person is assessed for a particular year on the income received by him in the previous year. Section 4 states what the total income of the year of account shall be deemed to include. If a person is resident in British India during the year of account all income, profits and gains which accrue or are deemed to arise in British India during that period are taxable and similarly all income accruing or arising outside British India, but there is a proviso to the effect that in the case of a person not 'ordinarily resident' in British India income, profits and gains which accrue or arise to him without British India shall not be included, unless they are derived from a business controlled in or a profession or vocation set up in India or unless they are brought into or received in British India by him during the year of account. The assessee here says that she is not ordinarily resident in British India and is entitled to the benefit of the proviso in respect of the Burma income until it is brought into British India.
2. Residence in British India is defined in Section 4-A. Clause (a) (ii) states that for the purposes of the Act an individual is resident in British India in any year if he maintains or has maintained for him a dwelling place in British India for a period or periods amounting in all to 182 days or more in that year, and is in British India for any time in that year. Clause (a) (iii) says that an individual is resident in British India in any year if he, having within the four preceding years been in British India for 365 days or more, is in British India during the year of account otherwise than on an occasional or casual visit. The learned Counsel for the assessee has conceded that by reason of the maintenance of the family house in Srirangam he cannot dispute the contention of the Income-tax authorities that the assessee was resident in British India during the year of account. But in order to bring her within the Act in respect of the Burma income it must be shown that she was 'ordinarily resident' in British India in that year.
3. Section 4-B(a) reads as follows:
An individual is not 'ordinarily resident' in British India in any year if he has not been resident in British India in nine out of the ten years preceding that year or if he has not during the seven years preceding that year been in British India for a period of, or for periods amounting in all to, more than two years.
On behalf of the assessee it is said that in defining the term 'British India' regard can only be had to what was British India in the year of account, and that on the first day of that year Burma ceased to be part of British India. It is admitted that if the term must be read as applying to British India as it stood before the 1st April, 1937, when considering residence during the ten or the seven years referred to in Section 4-B (a) the assessee is out of Court, but reliance is placed on Section 311 of the Government of India Act, 1935, which defines 'British India' as meaning all territories for the time being comprised within the Governors' Provinces and the Chief Commissioners.' Provinces. If this were the definition to be applied the assessee would be on sure ground, but the argument overlooks the words which precede the definition given in the section. The section opens thus:
In this Act, and unless the context otherwise requires; in any other Act the following expressions have the meanings hereby respectively assigned to them, that is to say-
This statement leaves it open to the Court to .examine the Income-tax Act and find out what is meant by the term 'British India' in Section 4-B of the Income-tax Act, and in these circumstances regard must be had to what is said in Section 3 of the General Clauses Act. Section 3 (7) of that Act says:
In this Act and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context, 'British India' shall mean, as respects the period before the commencement of Part III of the Government of India Act, 1935, all territories and places within His Majesty's dominions which were for the time being governed by His Majesty through the Governor-General of India or India, and as respects! any period after that date means ail territories for the time being comprised within the Governors' Provinces and the Chief Commissioners' Provinces, except that a reference to British India in an Indian law passed or made before the commencement of Part III of the Government of India Act, 1935, shall not include a reference to Berar.
4. This definition was inserted in the General Clauses Act by the Government of India (Adaptation of Indian Laws) Order, 1937, which was promulgated under the provisions of Section 293 of the Government of India Act, 1935. Can there be any doubt that this definition is the guide to what is meant by 'British India' in Section 4-B of the Income-tax Act? In our opinion there can be no doubt.
5. The learned Counsel for the assessee has pointed to Section 293 of the Government of India Act and says that this indicates that the Adaptation Order cannot affect any Act which came into force after the promulgation of the Order. Section 293 so far as is relevant reads as follows:
His Majesty may by Order in Council to be made at any time after the passing of this Act provide that, as from such date as may be specified in the Order, any law in force in British India or in any part of British India shall, until repealed or amended by a competent Legislature or other competent authority, have effect subject to such adaptations and modifications as appear to His Majesty to be necessary or expedient for bringing the provisions of that law into accord with the provisions of this Act and, in particular, into accord with the provisions thereof which reconstitute under different names Governments and authorities! in India and prescribe the distribution of legislative and executive powers between the Federation and the Provinces.
6. The important words here are 'His Majesty may by Order in Council to be made at any time after the passing of this Act', and by reason of the power conferred by this section His Majesty has by Order in Council amended the General Clauses Act which applies to the Income-tax Act. If Section 4-B of the Income-tax Act is to be read in the light of the definition of 'British India' in the General Clauses Act, as we consider it must be, there can be no doubt that the Income-tax authorities have formed the correct opinion of the law.
7. What we have said is sufficient to dispose of the reference, but there is a decision of this Court which supports in full the opinion which we have expressed. The case is The Commissioner of Income-tax v. Valliammai Achi : (1939)1MLJ31 . There the assessee, who resided in British India, owned a saw mill in Burma. In the year of account, 1936-37, the saw mill business resulted in a loss and the assessee claimed to be entitled to deduct from her income assessable in the following year what she had lost in Burma during the year of account. Burma became separated from India on the first day of the year of assessment. It was held that she was entitled to deduct the loss suffered in Burma from her other profits. In that case the Commissioner of Income-tax referred this question:
Whether the decision of the Assistant Commissioner that the loss of Rs. 8,663 incurred by the petitioner in Burma in the year of account 1936-37 is not allowable as a deduction in the year of assessment 1937-38 is correct in law?
8. The Commissioner of Income-tax contended that as the combined effect of Section 3 and of sub-S. (1) of Section 4 was to render the tax for the year 1937-38 leviable in respect of the income, profits and gains which in the previous year accrued, arose or were received in British India and as Burma was no longer a part of British India the loss suffered in Burma was not deductible, in other words regard could only be had to what was British India in the year of assessment. The Court refused to accept this contention and said that as the tax was charged on the income of the previous year regard must be had to what was British India in the year of account. This decision was followed by the Bombay High Court in In re Rawji Dhanji & Co. : 8ITR1(Bom) .
9. The question referred in this case will be answered in the manner indicated) and as the assessee has failed she must pay the Commissioner's costs, Rs. 250.