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A. Y. S. Parisutha Nadar Vs. Commissioner of Agricultural Income Tax, Madras. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberTax Cases No. 223 of 1976 (Revision No. 43 of 1976)
Reported in[1978]111ITR441(Mad)
AppellantA. Y. S. Parisutha Nadar
RespondentCommissioner of Agricultural Income Tax, Madras.
Cases ReferredK.P.M. Abdul Majeed v. Assistant Agricultural Income
Excerpt:
- .....any individual for the purpose of assessment, there shall be included so much of the agricultural income of a wife or minor child of such individual as arises directly or indirectly from assets transferred directly or indirectly to the wife by the husband otherwise than for an adequate consideration or in connection with an agreement to live apart. section 65 of the act deals with composition of agricultural income-tax in respect of plantation or non-plantation crops up to a certain limit of the extent held by a particular individual. this section provides for the holder of the land applying for permission to pay the amount on the basis of composition and authorities the agricultural income-tax officer to grant permission. section 65(7) is important and the same is as follows :'65. (7).....
Judgment:

ISMAIL J. - The petitioner herein had settled an extent of 83.62 acres of land in favour of his wife, as per settlement deed dated November 16, 1954. After the settlement, the petitioner was paying composition, as provided for in section 65 of the Tamil Nadu Agricultural Income-tax Act, 1955, instead of assessed tax. It is represented that similarly the petitioner's wife also was paying the composition amount. However, with regard to the assessment in question the Commissioner of Agricultural Income-tax in exercise of his powers under section 34 of the Act suo motu revised the order of the Agricultural Income-tax Officer and held that under the provisions of section 9(2)(a)(iii) of the Act read with the proviso to section 65(7), the lands settled on the wife were to be included in the lands retained by the petitioner herein for the purpose of calculating the composition amount. Accordingly, he directed the Agricultural Income-tax Officer to redetermine the amount payable by the assessee-petitioner. It is this order which is sought to be revised under section 54 of the Tamil Nadu Agricultural Income-tax Act, 1955.

Section 9(2)(a)(iii) of the Act states that in computing the total agricultural income of any individual for the purpose of assessment, there shall be included so much of the agricultural income of a wife or minor child of such individual as arises directly or indirectly from assets transferred directly or indirectly to the wife by the husband otherwise than for an adequate consideration or in connection with an agreement to live apart. Section 65 of the Act deals with composition of agricultural income-tax in respect of plantation or non-plantation crops up to a certain limit of the extent held by a particular individual. This section provides for the holder of the land applying for permission to pay the amount on the basis of composition and authorities the Agricultural Income-tax Officer to grant permission. Section 65(7) is important and the same is as follows :

'65. (7) In respect of the period during which the permission granted under sub-section (5) is in force, the provisions of this Act regarding the submission of returns, accounts or other documents, the assessment to agricultural income-tax or any other matter incidental thereto shall not apply in relation to the grantee :

Provided that the provisions of sub-section (2) of section 9 and sections 35 and 36 shall, as far as may be, apply in relation to the composition of agricultural income-tax under this section as they apply in relation to the assessment of agricultural income-tax under this Act.'

The learned counsel for the petitioner contends that section 9(2)(a)(iii) of the Act does not authorised the authorities to club the holding of the wife with the holding of the husband and it merely authorises the inclusion of the income with that of the husband. He further contends that in proceedings under section 65 of the Act where no assessment to tax is made and only the holder of the land agrees to pay tax on composition basis at the rates prescribed in the schedule to the Act, there is no power to club the holding of the wife, though she obtained it by way of settlement from the husband, with the holding of the husband. We are unable to accept this argument. The very language contained in the proviso to section 65 which we have extracted, namely, 'as far as may be', will clearly indicate that for the purpose of application of section 9(2), the statute treats the composition on the same footing as the assessment to tax. It is this view that was taken by a Bench of this court in State of Madras v. S. Subramania Iyer : [1966]61ITR613(Mad) . A similar argument appears to have been advanced before that Bench and that Bench dealing with the said argument stated (page 628) :

'The proviso to section 65 states that the provisions of section 9(2) shall, so far as may be, apply in relation to the composition of agricultural income-tax as they apply in relation to the assessment of agricultural income-tax under the Act. The clause `so far as may be' is important. It would show that what was contemplated was not a literal application of section 9(2) to section 65, which may produce a fruitless result, as contended by the petitioner, but what was contemplated was the application of the principle of section 9(2). Section 9(2) states that for computing the income of a person there shall be added thereto the income from the assets gifted to his wife and minor child, other than a married daughter. The principle behind this provision is that the assets gifted to the wife and to the minor child shall be deemed as an addition to the assets of the assessee for the purpose of fixing his liability to pay agricultural income-tax. Composition means substituting a fixed sum in lieu of agricultural income-tax. If we are to apply the principle of section 9(2) to section 65, it would mean that for the purpose of composition, the land in the assessee's possession should be deemed to be augmented by the land gifted to his wife and to his minor child other than a married daughter.'

The above observation of the Bench is directly in point and is directly opposed to the contention of the learned counsel for the petitioner.

However, the learned counsel for the petitioner strongly relied on another decision of this court in K.P.M. Abdul Majeed v. Assistant Agricultural Income-tax Officer : [1970]78ITR124(Mad) . Though it is not necessary for us to express our opinion as to the correctness or otherwise of that decision, it is enough to point out that that decision did not deal with section 65 at all and it dealt with only section 10(1) read with section 9(2). Consequently, that decision has no application whatever to the present case.

The last argument advanced by the learned counsel for the petitioner is that by virtue of the provisions contained in section 65(7), section 34 itself under which alone the Commissioner of Agricultural Income-tax can exercise his suo motu power has been excluded. We are unable to accept this argument. Section 34(1) states :

'The Commissioner may, of his own motion or on application by an assessee, call for the record of any proceeding under this Act which has been taken by any authority subordinate to him and may make such enquiry or cause such enquiry to be made, and subject to the provisions of this Act, may pass such orders thereon as he thinks fit :

Provided that he shall not pass any order prejudicial to an assessee without hearing him or giving him a reasonable opportunity of being heard :

Provided further that an order passed declining to interfere shall not be deemed to be an order prejudicial to the assessee.'

Thus it will be seen that section 34(1) is couched in the widest possible language and therefore it has got a very wide amplitude and will take in every order passed by any authority subordinate to the Commissioner under the Act. Hence the order passed under section 65 will fall within the scope of section 34 and, consequently, unless the learned counsel for the petitioner can satisfy this court that there is express provision in section 65 excluding the applicability of section 34 to the proceedings under section 65, he cannot succeed. Having regard to the language of section 65(7) which we have extracted in full, there is no such exclusion and all that have been excluded are the provisions regarding submission of returns, accounts or other documents, the assessment to agricultural income-tax or any other matter incidental thereto and nothing else. Therefore, there is no substance in this contention either.

Under these circumstances, the petition fails and is dismissed.


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