RAMANUJAM J. - All the above three writ petitions had been filed by the same petitioner. In respect of her land holdings, the petitioner had applied for composition under section 65 of the Agricultural Income-tax Act, 1955, year after year. In respect of the assessment year 1966-67, there was an order of composition passed on June 16, 1966, on an application made by the petitioner on June 8, 1966. Once an order of composition is made, that will enure for a period of three years under section 65. Therefore, though the order of composition was passed on June 16, 1966, for the assessment year 1966-67, it will enure for three assessment years ending with the assessment year 1968-69. However, the Commissioner of Agricultural Income-tax, after issuing a show-cause notice to the petitioner as to why the order of composition should not be cancelled and after getting an explanation from the petitioner, had cancelled the said order of composition dated June 16, 1966, by his order, dated August 11, 1972. The petitioner has challenged the validity of the said order of the Commissioner. Subsequent to the said impugned order of cancellation the assessing authority has naturally to proceed to assess the petitioner's agricultural income for the years 1966-67 and 1967-68, which had expired by the time the Commissioner's order came to be passed. For the assessment year 1966-67, the agricultural income of the petitioner was computed on best judgment basis at Rs. 13,495.30. For the assessment year 1967-68, her income was computed on the same best judgment basis at Rs. 14,263.70. Since the petitioner has questioned the order of the Commissioner cancelling the order of composition, she has, naturally, questioned the consequential orders passed by the Agricultural Income-tax Officer for the assessment years 1966-67 and 1967-68 on the ground that, as the order of the Commissioner cancelling the composition order is bad, the consequential orders of assessment passed by the Agricultural Income-tax Officer have to be set aside.
The Writ Petitions Nos. 1897 of 1973 and 1896 of 1973 are against the assessment orders passed by the Agricultural Income-tax Officer for the assessment year 1966-67 and 1967-68, respectively, and Writ Petition No. 1898 of 1973 is directed against the Commissioner's order cancelling the order of composition earlier passed by the Agricultural Income-tax Officer.
The petitioner's attack against the order of the Commissioner is threefold. One is that the Commissioner has no jurisdiction to revise or cancel an order or composition passed by the Agricultural Income-tax Officer. The other is that even assuming that the Commissioner had jurisdiction to revise the order of composition based on the provisions of the Amending Act 7 of 1966, which came into force on May 13, 1966, the order of the Commissioner, so far as the assessment year 1966-67 is concerned, is invalid as the Amending Act was not in force on the first of April, 1966, which is the relevant date for computation of the agricultural income for the assessment year 1966-67. The third is that the Commissioner has erred in his finding that the extent of the petitioner's holding exceeded 50 standard acres.
Learned counsel for the respondents raises a preliminary objection to the maintainability of these writ petitions. According to him, there is a right of revision to this court under section 54 of the Agricultural Income-tax Act against the order of the Commissioner which has been challenged in Writ Petition No. 1898 of 1973 and a right of appeal against the orders of assessment which have been challenged in the other two writ petitions. But I do not consider that this preliminary objection has any merit. The Commissioner's order has been impugned in Writ Petition No. 1898 of 1973 on the ground that the Commissioner has no jurisdiction to interfere with an order of composition and that the Amending Act 7 of 1966 is bad as it is discriminatory. When a challenge is made on the basis of the invalidity of the Act which is sought to be invoked by the Commissioner, such a challenge cannot be made before the Commissioner or in revision petition filed against the Commissioner's order. A challenge to the validity of the Act can properly be made only in writ proceedings and not in a revision challenging the Commissioner's order. If the Commissioner's order could be challenged in the Writ Petition Nos. 1898 of 1973, notwithstanding section 54 of the Act, then the assessment orders which are merely consequential to the order of the Commissioner can also be challenged before this court along with the Commissioner's order. I do not agree with the learned counsel for the petitioner that the proceedings have abated in view of section 58(2) of the 42nd Amendment. I have already held that since the validity of the Amending Act has been challenged, section 54 of the Act cannot be said to be an alternative remedy. Hence there is no question of abatement of these proceedings.
As regards the first ground of attack, it is not in dispute that the Tamil Nadu Act 7 of 1966 which took away the benefit of composition in respect of land holdings beyond 50 standard acres came into force only on May 13, 1966. The said Amending Act has not been made specifically retrospective, so as to be applicable from April 1, 1966, the commencement of the assessment year. According to the petitioner, Tamil Nadu Act 7 of 1966, which came into force on May 13, 1966, cannot be applied to the assessment year 1966-67 which commenced on April 1, 1966. But, according to the revenue, since the Act had come into force during the assessment year, the assessment has to be made in accordance with the provisions of the Amending Act. The Commissioner in his impugned order dated August 11, 1972, has stated that the material date is the date of assessment and if the Amending Act was in force on that date, then the assessment had to be made in accordance with the provisions of the Amending Act. The question, therefore, is whether, the view taken by the Commissioner is legally correct.
The petitioner's learned counsel submits that the Commissioner's view that as the Amending Act was in operation at the time when the assessment came to be made, the assessment should be in accordance with the Amending Act is not legally sustainable in view of the decisions of this court and of the Supreme Court rendered under the Income-tax Act as well as the Agricultural Income-tax Act. Reference has been made by the learned counsel to the following decisions. In M.KR. Deivanayagam v. Second Addl. Income-tax Officer : 35ITR549(Mad) , the question arose as to whether the amendment of section 49A of the Income-tax Act on March 30, 1948, will apply to the assessment for the assessment year 1947-48 and this court held that the Act cannot be retrospective and, therefore, will not apply for the assessment year 1947-48. For taking that view, the reasoning given by this court is that where there was a change in the law even within the course of the assessment year, it was the law in force at the commencement of the assessment year that should apply in the absence of any statutory provision to the contrary. The same view has been taken by the Supreme Court in Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd. : 42ITR589(SC) . The Supreme Court had held that the amendment of section 10(2) of the Income-tax Act brought in on 4th May, 1946, was inoperative for the assessment year 1946-47, that the amendment which came into force on May 5, 1946, was not retrospective and was not in force on April 1, 1946, and that, therefore, the amendment did not apply to the assessment for the assessment year 1946-47. In Karimtharuvi Tea Estate Ltd. v. State of Kerala : 60ITR262(SC) , dealing with the similar question which arose in respect of an assessment under the Kerala Agricultural Income-tax Act, the Supreme Court pointed out at page 264 :
'Now, it is well settled that the Income-tax Act, as it stands amended on the first day of April of any financial year must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force.'
In a recent decision in M.O.A. Rahman Sait v. Commissioner of Agricultural Income-tax : 111ITR226(Mad) , Koshal J. has also taken the view that since the assessment year commenced on the first of April, 1966, the amendment brought in by Tamil Nadu Act 7 of 1966, will not stand attracted unless for the assessment year 1966-67 it has been made specifically retrospective.
All the above decisions make it abundantly clear that any change in the law in the course of an assessment year, cannot apply in making the assessment for that assessment year unless the statutory provision has been made retrospective and that in the absence of such a retrospective operation, normally, the law as on the date of the commencement of the assessment year should govern the assessment for that year. This is because the subject of charge both under the Income-tax Act as well as the Agricultural Income-tax Act is not the income of the year of assessment, but the income of the previous year. When an assessment is made, the income of the previous year is determined as on the date of the commencement of the assessment year. Therefore, whenever an assessment is to be made, it should be taken to have been made with reference to the law in force at the commencement of the assessment year. In this case, as already stated, the Amending Act came into force on May 13, 1966, and it is not specifically made retrospective. Therefore, for the assessment year which commenced on first April, 1966, the assessment has to be made without reference to the Act 7 of 1966 and the order of the Commissioner so far as it says that as the Amending Act was in force on the date when the composition order came to be made it has to be applied, is illegal and cannot be sustained. In this view, the Commissioner's order so far as it relates to the assessment year 1966-67 has to be quashed, and is quashed, and W.P. No. 1897 of 1973 is allowed. But there will be no order as to costs.
As regards the assessment year 1967-68, the Amending Act No. 7 of 1966 will have to apply and if the petitioner's holding during that year is more than 50 standard acres, there cannot be any order of composition. The petitioner's case even before the Commissioner is that her holding is less than 50 standard acres and that would be clear from a perusal of the orders of composition passed for the subsequent assessment years. But the petitioner has urged before the Commissioner that the land under arecanut crop stood reduced from the assessment year 1967-68 and that, therefore, her holding will be less than 50 standard acres. The Commissioner, however, held that the aggregate holding of the petitioner came to 16 acres 71 cents which worked out to 50.13 standard acres, that as the petitioner's holding exceeded 50 standard acres by 13 cents, the order of composition for that assessment year made by the Agricultural Income-tax Officer cannot be sustained in law. The petitioner has challenged the said finding given by the Commissioner in Writ Petition No. 1898 of 1973. As a matter of fact, the petitioner has filed a review application before the Commissioner himself for a review of the order on the ground that adangal extracts for the relevant years will clearly establish the petitioner's holding to be less than 50 standard acres. But the said review petition has been dismissed by the Commissioner by an order dated October 31, 1972, holding that no reliance could be placed on the adangal extracts. The petitioner contends before this court that there has been no proper investigation on the petitioner's claim that her holding is less than 50 standard acres based on the adangal extracts and other materials produced by her and that even her attempt to have the impugned orders reviewed had failed. A perusal of the original order of the Commissioner dated October 31, 1972, shows that the Commissioner was not inclined to place any reliance on the entries in adangal made by the local village officers. If the adangal entries show that the petitioner's holding is less than 50 standard acres, it is for the revenue to disprove the entries or reject the same on certain concrete materials or evidence. The mere rejection of the entries in the adangal as unreliable without reference to the person who made the entries specially when there is no other evidence contra, does not appear to be correct in the circumstances of this case. It is not in dispute that the petitioner was not given an opportunity to prove the entries in the adangal before the Commissioner, if the Commissioner felt that no reliance could be placed on the entries in the adangal. I, therefore, feel that the question whether the petitioner's holding during the assessment year 1967-68 was above 50 standard acres or not will have to be decide afresh by the Commissioner after giving due opportunity to the petitioner to establish her case that her holding was less than 50 standard acres during that assessment year. The result is that the Commissioner's order so far as it relates to the assessment year 1967-68 and the consequent order of assessment passed by the Agricultural Income-tax Officer for that year will stand vacated. The Commissioner is directed to dispose of the suo motu proceedings in relation to the assessment year 1967-68 afresh after giving an opportunity to the petitioner to substantiate her stand that her holding is less than 50 standard acres. With these directions, the Writ Petitions Nos. 1896 and 1898 of 1973 are allowed. There will be no order as to costs.