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Commissioner of Agricultural Income-tax Vs. K.P. Ponnusamy Gounder (Decd.) (by L.Rs) - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberTax Case Nos. 127 to 130 of 1973 (Revision Nos. 107 to 110 of 1973)
Judge
Reported in[1977]110ITR30(Mad)
ActsTamil Nadu Agricultural Income Tax Act, 1955 - Sections 2 and 10(1)
AppellantCommissioner of Agricultural Income-tax
RespondentK.P. Ponnusamy Gounder (Decd.) (by L.Rs)
Appellant AdvocateAdditional Government Pleader
Respondent AdvocateK.C. Rajappa, Adv.
Excerpt:
.....to be said to hold the land it is not enough if he owns or possesses the land, but should also 'enjoy' the land and the only method of enjoying land is by cultivating it and that so long as the first respondent had not 'cultivated' 12.50 standard acres, but less than that extent, by virtue of section 10(1) of the act, he is outside the act: we are clearly of the opinion that this conclusion of the tribunal is erroneous......the subject-matter of consideration in these revisionpetitions, the first respondent owned 38.33 acres of land in mettupattivillage in different survey numbers. when action was taken to assess theagricultural income from the lands under the provisions of the tamil naduagricultural income-tax act, one of the contentions put forward bythe first respondent was that even though he owned 38'33 acres of land, hecultivated an extent of less than 12.50 standard acres find, therefore, theact itself did not apply to him. though the agricultural income-tax officeras well as the appellate assistant commissioner did not accept this contention of the first respondent, the agricultural income-tax appellate tribunalaccepted this contention and held that the act has no application to thefirst.....
Judgment:

Ismail, J.

1. During the four years, viz., assessment years 1964-65 to1967-68, which are the subject-matter of consideration in these revisionpetitions, the first respondent owned 38.33 acres of land in Mettupattivillage in different survey numbers. When action was taken to assess theagricultural income from the lands under the provisions of the Tamil NaduAgricultural Income-tax Act, one of the contentions put forward bythe first respondent was that even though he owned 38'33 acres of land, hecultivated an extent of less than 12.50 standard acres find, therefore, theAct itself did not apply to him. Though the Agricultural Income-tax Officeras well as the Appellate Assistant Commissioner did not accept this contention of the first respondent, the Agricultural Income-tax Appellate Tribunalaccepted this contention and held that the Act has no application to thefirst respondent. It also alternatively held that even on the basis that theAct applied, the income derived by the first respondent was below thetaxable limit and, therefore, no tax was payable by him. It is the correctness of these conclusions that is challenged by the State in the present taxrevision petitions. Consequently, two points arise for our consideration,one is whether the Act itself applies to the first respondent or not. Thesecond is, if the Act applied, whether the income derived by the firstrespondent during the relevant years was below the taxable limit or not.

2. As far as the first point is concerned, Section 10(1) of the Act states :

'Nothing contained in this Act shall apply to a person who holds landnot exceeding twelve and a half standard acres.'

3. The expression 'to hold' has been defined in Section 2(nn) of the Actas follows:

''to hold' with its grammatical variations and cognate expressions means to possess and enjoy either as owner or tenant or mortgagee in possession or as a maintenance holder or in one or more of those capacities.'

4. The Tribunal took the view that for a person to be said to hold the land it is not enough if he owns or possesses the land, but should also 'enjoy' the land and the only method of enjoying land is by cultivating it and that so long as the first respondent had not 'cultivated' 12.50 standard acres, but less than that extent, by virtue of Section 10(1) of the Act, he is outside the Act: in other words, the Act itself will not apply to him. We are clearly of the opinion that this conclusion of the Tribunal is erroneous. Even the definition of the term 'to hold' does not lead to the conclusion that for the purpose of application of Section 10(1) of the Act a person must not only possess and own the land but should also actually cultivate the land. It may happen that in one year for seasonal conditionsor for want of water a person may cultivate a lesser extent and in another year he may cultivate more extent, in the first year the extent cultivated being less than 12.50 standard acres and in the second year, it being more than 12.50 standard acres. In such a case it cannot be contended that by virtue of Section 10(1) the person is exempt from the Act for the first year, but comes within the scope of the Act for the second year. It is one thing to say that a person is exempt from the Act under Section 10(1) of the Act, but it is entirely another thing to say that a person is not liable to pay tax under the provisions of the Act either because the income itself is exempt from tax under a particular provision, or because the income derived is below the taxable limit prescribed by the Act. There should be no confusion about the applicability of the Act to a particular person, and the liability of a person to pay the tax under the Act. As we pointed out already, what the Tribunal held in this case is that though the first respondent owned and possessed 38'33 acres, still, by virtue of Section 10(1), the Act itself did not apply to him, because, in the particular years in question, he 'cultivated' less than 12.50 standard acres. We are of the opinion that such a conclusion is erroneous and is not warranted by the terms of. the statute.

5. As far as the second reason given by the Tribunal, is concerned, we are of the opinion that the conclusion is not based on any material. The Tribunal points out in paragraph 10 of its order :

'The learned authorised representative also contended that theincome estimated in respect of various crops raised in the lands by theAgricultural Income-tax Officer are excessive and the expenses allowed forcultivation expenses are very low. He had filed statements for the fourassessment years in question adopting the gross and net income for thevarious crops as fixed, by this Tribunal in the earlier Appellate Tribunalappeals. As per such statements, the net income falls below Rs. 3,600 ineach year. We find that the income estimated by the Agricultural Income-tax Officer in all the years is excessive and the cultivation expenditureallowed by him are tow. If the Tribunal's standard is applied' to the variousincome and expenditure, the net agricultural income of the appellant, even ifit is found that he held lands of more than 12.50 standard acres each year,the net income, in each year will be below the taxable limit.'

6. In this paragraph the Tribunal has not given any facts and figures as to the gross income obtained or the cultivation expenses incurred by the first respondent for the purpose of finding out whether his income in each of the four years was within the taxable limit or not. In view of this very summary and scrappy manner in which the Tribunal has dealt with this aspect of the matter, we have no option but, to set aside the order of the Tribunal and remit the matter to the Tribunal for disposal of the appealspreferred by the first respondent on merits with regard to the second point on the basis that Section 10(1) does not exempt the first respondent from the provisions of the Act.

7. The tax revision petitions are accordingly allowed. There will be no order as to costs.


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