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Issues:
1. Jurisdiction of the Collector of Malabar to assess the petitioner. 2. Taxability of income under Section 3 and Section 33(1) of the Act. 3. Interpretation of provisions regarding income tax liability of non-residents. 4. Assessment of profits and gains arising from business connections in British India. 5. Determination of the petitioner's principal place of business for assessment purposes. Analysis: 1. The High Court of Madras was tasked with determining whether the Collector of Malabar had the jurisdiction to assess the petitioner. The income taxable under the Act, as per Section 3, encompasses all income derived from any source if it accrues, arises, or is received in British India. Additionally, Section 33(1) specifies that profits or gains accruing to a person residing outside British India through business connections in British India are deemed to be income accruing in British India, thereby making them taxable under the Act. 2. The judgment clarifies that the tax liability under Section 33(1) applies irrespective of the non-resident's nationality, emphasizing that such profits and gains are chargeable in British India. The argument that tax is not applicable unless assessed in the name of an agent of the non-resident was dismissed, with reference to the proviso allowing tax recovery from the non-resident's assets within British India. Precedents from English Acts were cited to support the interpretation that tax can be levied even if the non-resident cannot be directly assessed. 3. In the case at hand, the petitioner's business activities in British Cochin, which is part of Malabar for Income Tax purposes, established a clear connection to British India. The petitioner's acceptance of notices and submission of returns to the Collector of Malabar further solidified his assessable status. The judgment highlighted the petitioner's failure to contest his tax liability during prior proceedings, precluding him from raising objections subsequently. 4. The court emphasized that the profits and gains arising from the petitioner's business connections in British India were subject to assessment by the Collector of Malabar. The petitioner's failure to assert his principal place of business in Bombay, thereby affirming the jurisdiction of the Collector of Malabar, led to the dismissal of his claims regarding assessable profits in British Cochin. The petitioner was directed to bear the costs of the reference. 5. Ultimately, the judgment upheld the jurisdiction of the Collector of Malabar to assess the petitioner based on his business activities and connections in British India, reinforcing the tax liability of non-residents deriving income from such sources. The petitioner's compliance with tax procedures and lack of objection during previous stages of assessment were pivotal in determining his assessable status and the consequent obligation to pay the reference costs.
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