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TMI Blog1955 (9) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee appealed to the Tribunal and contended that agricultural income accruing in Pakistan could not be charged to income-tax in this country according to the terms of the agreement for the avoidance of double taxation of income between the Governments of the Dominions of India and Pakistan, dated 10th December, 1947. He also contended that, in any event, as at some time during the relevant previous year the agricultural lands from which the income was derived had been subject to a local rate assessed and collected by Officers of the Government, the agricultural income of the entire previous year was exempt from tax in the assessment for 1948-49. 3. The appeal to the Tribunal was heard by the Calcutta Bench. Both the members of that Bench concurred in holding that the double taxation avoidance agreement above referred to did not apply to section 49AA of the Income-tax Act, under the authority of which the said agreement had been made, referred only to the avoidance of double taxation under the Indian Income-tax Act and under the corresponding law in force in Pakistan. Agricultural income from lands situate in Pakistan was taxable there under an agricultural Income-tax Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e E. R. Meyer and B. L. Pal, for the Commissioner JUDGMENT The Judgment of the Court was delivered by CHAKRAVARTTI, C.J.--The points involved in this reference are a little out of the common and have afforded some relief from the dreariness of the ordinary Income-tax reference. The most interesting of the points raised by Dr. Pal had, however, to be ruled out, as it did not seem to us to arise out of the appellate order. Also, of the three questions referred, two were ultimately abandoned as it was conceded that, on the materials on record, they could not be answered. The assessee is one Kumar Jagadish Chandra Sinha, who is an individual, resident and ordinarily resident in India. He owns a zemindary situated wholly in the district of Jessore which, as a result of the partition, went to Pakistan with effect from the 15th August, 1947. The assessee observes the Bengali Calendar year in maintaining his accounts. In the accounting year 1354 B.S., corresponding to the 14th of April, 1947, to the 13th of April, 1948, the assessee received from his zemindary in Jessore an income of ₹ 1,85,380. It is not disputed that the money was rent derived from land used for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on between the Accountant Member and the Judicial Member. The assessee's contention before the Tribunal was that if the land, from which the income had been derived, was assessed to land revenue in British India even for a part of the accounting year, such assessment would be sufficient to make the income of the whole year agricultural income for the purposes of an Indian assessment. The Accountant Member rejected that contention by referring to the definition of British India, introduced in the Income-tax Act as section 2(3A) by the India (Adaptation of Income-tax, Profits Tax and Revenue Recovery Acts) Order, 1947, and held that, according to that definition, which applied to the 1948-49 assessment, the land was not land assessed to land revenue in British India during the period subsequent to the 14th of August, 1947. He held accordingly that the income attributable to the period subsequent to the 14th of August, 1947, could not be treated as agricultural income and it was therefore liable to be assessed. The Judicial Member held that if at any point of time during the previous year, the land was assessed to land revenue in British India, the requirements of section 2(1)(a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome between the Government of the Dominion of India and the Government of the Dominion of Pakistan dated 10th December, 1947, under section 49AA of the Indian Income-tax Act, 1922, (and other enactments) is applicable to income accruing to a resident in India from agricultural lands situate in Pakistan which is exempt from tax under the Pakistan Income-tax Act in force on and from 15th August, 1947, in Pakistan? The next accounting year of the assessee was 1355 B.S., corresponding to the 14th of April, 1948, to the 13th of April, 1949, and the relative assessment year was 1949-50. In that accounting year, the assessee received an income of ₹ 56,673 from his zemindary in Jessore. As in 1948-49, the whole of the income was brought under assessment, but it was not contended on behalf of the assessee that it ought to be treated as agricultural income even in India and exempted from taxation. The reason for not advancing that contention presumably was that, during the whole of that accounting year, the land belonged to Pakistan and, therefore, no contention of the kind advanced in relation to the preceding year could be tenable. But the point based on the agreement for the avo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain any of the laws of that country. It is also true that, under section 38, when the Court has to form an opinion as to the law of any country, any statement of such law contained in a book purporting to be printed or published under the authority of the Government of such country and to contain any such law, is relevant. But the only effect of those two sections is that the Court may take judicial notice of a publication containing a foreign law, if it is issued under the authority of the foreign Government concerned and may accept the law as set out in such publication as a law in force in the particular foreign country at the relevant time. But such a publication cannot be evidence that what is contained in its is the whole law. An official version of the Pakistan Income-tax Act may, for example, establish that at the date the edition was published, the Act, as set out in it, was in force in Pakistan, but it will not show whether the Act had been subsequently amended or that it had been in force in the same form on a previous date or that there are not other laws which have modified the Act in its application to certain circumstances or excluded its operation during a particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnish no basis for applying the agreement or deciding whether it was applicable. As framed for the year 1948-49, the question describes the income to which the agreement is sought to be made applicable as income which is exempt from tax under the Pakistan Income-tax Act in force on and from the 15th August, 1947, in Pakistan. On the assumption contained in that phrase, the agreement would exclude itself from the income by virtue of the first of its own articles which requires a tax to be imposed on the relevant income in both Dominions. If we cannot answer the questions in the absence of evidence regarding the relevant Pakistan law, we cannot also answer them on concessions or assumptions made by the parties. For a Court to decide a question depending on the actual state of a foreign law on concessions made by the parties, appears to me to be wholly impossible. It was suggested that we might call for a further statement from the Tribunal under section 66(4) of the Income-tax Act, but we indicated that, under that section, we could not direct a rehearing of the appeal on fresh evidence and indeed direct a decision on a new point, inasmuch as the original contention before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have fallen to Pakistan after the 14th of August, 1947. Dr. Pal put his contention in a different way. He contended that, irrespective of whether the land had continued to belong to British India or had gone over to a foreign country, under the definition of agricultural income, the assessee's income from the land would continue to be his agricultural income for the purposes of his Indian assessments by reason of the fact that it had been assessed to land revenue in what was British India prior to the 14th of August, 1947. It will be noticed that, under that contention, the income for the next accounting year, 1355 B.S., during the whole of which the assessee's zemindary belonged to Pakistan, would be equally agricultural income in India which, however, the assessee had never contended. As I have already pointed out, there is no reference as to this question with regard to the assessment year 1949-50. I do not, however, think that the point raised by Dr. Pal is outside the ambit of the question, as referred and now amended, and we must deal with his contention. The contention of Dr. Pal is based on that part of the definition of agricultural income which refers to asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1947, that is, after the date on which India, as re-constituted, came into existence. Such being the true meaning of the adapted definition of agricultural income, so far as it went by assessment to land revenue, it would follow that land, once assessed to land revenue in what was formerly British India, would continue to be land which is assessed to land revenue in British India, within the meaning of the definition, because it would carry with it the incident that it had been assessed to land revenue in British India and that the incident would be carried by the land, even if it came to be included in a foreign territory. The conclusion for which Dr. Pal contended, accordingly, was that since the assessee's zemindary in Jessore had been assessed to land revenue at the time of the Permanent Settlement in 1793 in what was British India up to the 14th of August, 1947, it was land which was assessed to land revenue in British India within the meaning of the Indian definition of agricultural income and therefore, even the income of the year 1354 B.S., attributable to the period after the 14th of August, 1947, during which the zemindary belonged to Pakistan, would be agricul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s assessment to land revenue, as made in British India, is subsisting or whether Pakistan has released it from assessment or made an assessment of its own. What the position in that regard is, is not known, because the law of Pakistan was not proved. Dr. Pal contended that no one had said that the original assessment was not subsisting ; but where the continuance of the assessment is a requirement of law, I am of opinion that we cannot proceed on the silence of the parties or any implied concession or admission. The same difficulty which I referred to in connection with the other two questions, appears to confront us here and, in my view, strictly speaking, the present question also cannot be answered. I would, however, in deference to the argument of Dr. Pal, deal with his construction of the definition of agricultural income . The relevant part of the definition, as adapted, would read as any rent or revenue derived from land which.............is..........assessed to land revenue in, as respects any period before the 15th day of August, 1947, the territories then referred to as British India but including Berar and as respects any period after the 14th day of August, 1947, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue in British India or is subject to a local rate. The whole expression which is either assessed to land revenue in British India or subject to a local rate assessed and collected, etc., most clearly suggests that the words is assessed in the first part do not refer to the act but refer to the state of assessment, just as the second part refers to the state of subjection to a local rate. The same verb is serves both the parts and the two parts appear to be on the same plane. The use of the present tense in the expression is assessed , taken along with the words British India , suggests, first, that what is contemplated is that the land must be situated in British India and, secondly, that it must be under a present and subsisting assessment to land revenue there. I find it wholly impossible to hold as a matter of language or as a matter of a reasonable construction that the expression is assessed contemplates land which was assessed at sometime or other to land revenue in what was formerly, British India, but which may no longer be a part of India at all, irrespective of whether the assessment is subsisting or not. Mr. Meyer drew our attention to two decisions deali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpretation section, namely, section 3A, it could not possibly have been contended that if any land had been assessed to land revenue in British India at any time, such land would for all time remain land which is assessed to land revenue in British India. Leaving out complications of language, the reason for the change in the meaning of the expression British India is plain. The Act is an Act of the Indian Legislature which is providing for the collection of tax of a certain kind for the benefit of the Indian treasury. The area on which it can operate is obviously the area for which the Indian Legislature could legislate and for which it must be presumed to have legislated. When, therefore, the old definition spoke of land which is assessed to British India or land which is subject to a local rate assessed and collected by the officers of the Government as such , it most certainly contemplated land situated within the territorial limits of British India, as it was then constituted. When the partition came to be made, the expression British India ceased to bear its old meaning and, in the physical sense as well, a part of the territory which had previously formed part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber of other sections in the Income-tax Act where the expression British India occurred and where also the new definition would necessarily apply. The sections mentioned by him were sections 4, 4A, 4B, 14(1), 19A, 40(2), 42 and 43. Dr. Pal however conceded that no assistance could be derived by examining the meaning of the term British India with reference to those sections, because in each section the expression has been used in conjunction with a different verb or in a different context. Dr. Pal also wished to contend that if the definition of agricultural income , as adapted, really bore the meaning which I have stated above, the adaptation was ultra vires the powers of the GovernorGeneral under the Indian Independence Act. We pointed out to him that this question could not be said to arise out of the appellate order. Dr. Pal replied that he was not raising a new question but only trying to give a new reason in support of the view which his client had taken. His client was still saying, as he had said before the Tribunal, that his post-partition income from the zemindary in Jessore was also agricultural income for the purposes of the Indian Income-tax Act and the new gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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