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Issues:
Validity of the second proviso to rule 9(c) of the Karnataka Agricultural Income-tax Rules, 1957; Assessment orders and demand notices under section 36 of the Karnataka Agricultural Income-tax Act, 1957; Requirement of notice under section 36 for assessment on agricultural income; Need for a fresh return in reassessment proceedings under section 36; Jurisdictional requirement for initiating reassessment proceedings; Compliance with sub-section (2) of section 18 for calling a fresh return in reassessment. Analysis: The judgment dealt with the validity of the second proviso to rule 9(c) of the Karnataka Agricultural Income-tax Rules, 1957, challenged by two assessees in writ petitions. The petitioners sought to quash assessment orders and demand notices under section 36 of the Karnataka Agricultural Income-tax Act, 1957. The assessment years in question were specified for each petitioner. The court noted that the challenge to the validity of rule 9(c) was not pressed as it had been upheld in a previous case. The main issue for consideration was whether the assessment orders and demand notices were valid, specifically regarding the jurisdictional requirement of issuing a notice under section 36 of the Act for reassessment. In analyzing the legal principles, the court referred to a previous decision emphasizing the necessity of a notice under section 36 for assessment on agricultural income. The court highlighted the importance of compliance with the provisions of section 36, which mandates the issuance of a notice under section 18(2) before commencing proceedings. The court noted that the absence of a fresh return being called for in reassessment proceedings could vitiate the jurisdiction of the assessing authority. The court referred to a Supreme Court decision to emphasize the significance of calling for a fresh return in reassessment cases. The court concluded that the failure to issue a notice calling for a fresh return in the reassessment proceedings deprived the authority of jurisdiction to proceed with the assessment. Therefore, the court set aside the impugned orders and demand notices and remanded the matter for fresh proceedings in compliance with the law. The court emphasized the mandatory requirement for a fresh return in reassessment cases and directed the Agricultural Income-tax Officer to initiate proceedings afresh if not barred by the limitation period specified in the Act. The writ petitions were allowed, and the rule issued earlier was made absolute, with no order as to costs.
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