1966 (7) TMI 9 - HC - Income Tax

Whether the assessment should have been made under the new Act (Mysore Agricultural Income-tax Act, 1957) or under the old Act (Mysore Agricultural Income-tax Act, 1955)

Summary

Issues:
1. Interpretation of the Mysore Agricultural Income-tax Act, 1957 regarding the assessment year and corresponding previous year.
2. Validity of assessment under the old Act versus the new Act.
3. Compliance with the procedure for reference of questions of law to the High Court under section 55(2) of the Mysore Agricultural Income-tax Act, 1957.

Analysis:
The judgment pertains to a reference made by the Commissioner of Agricultural Income-tax under section 55(2) of the Mysore Agricultural Income-tax Act, 1957, involving three questions of law. The primary issue revolves around the assessment year and the corresponding previous year under the old Act (Mysore Agricultural Income-tax Act, 1955) and the new Act (Mysore Agricultural Income-tax Act, 1957). The court clarifies that the charge of income-tax under the new Act applies to agricultural income earned during the previous year commencing on June 1, 1956, and ending on May 31, 1957, emphasizing that assessments for this period should be made under the new Act and not the old Act.

The judgment highlights the necessity for the Commissioner to clearly formulate and refer questions of law to the High Court under section 55(2) of the Act. Despite some procedural imperfections in the statement of the Commissioner, the court addresses the questions raised by the assessee. The court emphasizes the importance of the Commissioner scrutinizing the questions of law to ensure they arise from specific sections of the Act before referring them for decision.

Regarding the validity of the assessment under the old Act, the court reiterates its previous decisions that assessments for the financial year commencing on April 1, 1957, should be made only under the new Act. The court cites earlier cases to support its stance that assessments under the old Act for this period are invalid. Consequently, the court answers the questions posed by the assessee in favor of applying the new Act for assessments during the relevant period.

In conclusion, the court provides detailed answers to each question posed, emphasizing the necessity of assessments under the new Act for the specified financial year. The judgment directs that assessments made under the old Act for this period should be set aside entirely. No costs are awarded in the circumstances of the case.