1956 (8) TMI 63 - HC - Income Tax

Summary

Issues Involved:
1. Liability of the petitioner for agricultural income-tax for the year 1355 Fasli when the estate was under a receiver.
2. Interpretation of Section 13 of the Bihar Agricultural Income-tax Act, 1948.
3. Applicability of the definition of "person" under Section 2(m) of the Act.

Detailed Analysis:

1. Liability of the Petitioner for Agricultural Income-tax for the Year 1355 Fasli:
The primary issue was whether the petitioner could be legally assessed for the income of the estate in 1355 Fasli when the estate was under the control of a receiver. The petitioner argued that since the estate was managed by a receiver during the relevant period, the receiver should be liable for the tax, not the petitioner. The Agricultural Income-tax Officer assessed the petitioner, and subsequent appeals to the Commissioner and the Board upheld this assessment.

2. Interpretation of Section 13 of the Bihar Agricultural Income-tax Act, 1948:
Section 13 of the Act deals with the assessment of tax on common managers, receivers, etc. It states that if a receiver is in possession of the land during the accounting period and at the time of assessment, the receiver is liable to be taxed. The court emphasized that the word "holds" in Section 13 indicates that the receiver must be in possession of the land during both the accounting period and the assessment period. The court concluded that since the receiver had handed over possession to the petitioner before the assessment was made, Section 13 did not apply in this case. Therefore, the petitioner, who was in possession at the time of assessment, was liable for the tax.

3. Applicability of the Definition of "Person" under Section 2(m) of the Act:
The petitioner relied on the definition of "person" under Section 2(m), which includes a receiver. The argument was that since the receiver was in possession during the accounting period, he should be considered the "person" liable for tax under Section 3. However, the court held that Section 3, the general charging section, must be read in conjunction with Section 13, which serves as an exception. Section 13 specifies that the receiver must be in possession at the time of assessment to be liable. Since the receiver was not in possession at the time of assessment, the petitioner was correctly assessed.

Conclusion:
The court answered the reference in the affirmative, holding that the petitioner was liable for the agricultural income-tax for the year 1355 Fasli. The court emphasized that Section 13 requires the receiver to be in possession at the time of assessment to be liable, which was not the case here. Therefore, the assessment on the petitioner was upheld. The State of Bihar was awarded costs of Rs. 200.