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TMI Blog2001 (3) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... ns questioning the authority of the State Officer to recompute the agricultural income already assessed by the Central Officers under the Central Act and for consequential reliefs. Their contentions being rejected both by the learned single judge and the Division Bench of the High Court of Gauhati (see [1996] 219 ITR 59), these appeals/petitions have been preferred. It was argued on behalf of the appellants before the High Court that in view of the constitutional definition of "agricultural income" under article 366(1) of the Constitution, the Agricultural Income-tax Officers of the State are bound by the computation of agricultural income made by the Income-tax Officer under the Central Act. They also contended before the High Court that the Assam Agricultural Income-tax Act (the State Act) has not specifically authorised the State Officers acting under the said Act to recompute the agricultural income which was already determined by the Central Officers under the Central Act and the Rules. They also contended in the alternative that if it is to be held that the Assam Agricultural Income-tax Act did authorise such a recomputation of income, then such provisions of the State Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Income-tax Act and Rules, to the extent they are relevant. Entry 46 of List II of the Seventh Schedule to the Constitution relates to tax on agricultural income, therefore in view of article 246(3) of the Constitution power to legislate in regard to levy of agricultural income-tax is with the State Legislature. However, article 366(1) provides that the expression "agricultural income" in the Constitution means "agricultural income" as defined for the purpose of the enactments relating to the Indian Income-tax Act. Therefore, the agricultural income regarding which the State Legislature may enact law under entry 46, List II would be such income as defined in the Indian Income-tax Act and the laws relating to the said Act. Section 2(1A) of the Income-tax Act, 1961, defines "agricultural income". It is the common case of all parties concerned that so far as the income from cultivation, manufacture and sale of tea is concerned, the same comes within the said definition and rule 8 of the Income-tax Rules, 1962 (the Central Rules), which, provides for computation of income derived from sale of tea grown and manufactured by the sellers in India. It provides that 40 per cent. of such in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Central Act. Though we notice that under the proviso to the said section the State Officers have been empowered for the purpose of ascertaining agricultural income in regard to tea to call for any papers produced or liable to be produced before the taxing authorities administering the Central Act. Beyond the power of calling for records, this section does not confer any right on the State Officers to recompute the agricultural income already computed by the Central Officers. We also do not think by a process of interpretation such power can be read into section 49 of the State Act as has been done by the High Court. It is a well established rule of interpretation that, while interpreting a particular provision of a statute, courts should bear in mind the object and scheme of the entire Act. A particular provision of the Act cannot be considered or interpreted in isolation so as to give room for conflict inter se between the provisions of the same Act. Courts should also bear in mind that while interpreting a provision of the Act an interpretation leading to the provision becoming ultra vires should be avoided. Thus examined, it is seen from a plain reading of section 49 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment has been empowered to make such rules as are necessary for the purpose of carrying out the purposes of the Act. We have already noticed that the object and the scheme of the Act do not contemplate the State authorities being empowered to recompute the agricultural income contrary to the computation made by the Central Officers, nor do the subjects specified in subsections (2)(a) to (m) of section 50 provide for making such rules empowering the State Officers to make computation of agricultural income contrary to what is computed by the Central Officers under the Central Act. We have noticed that by virtue of the provisions made by the Legislature in the Explanation to section 2(a)(2), the second proviso to section 8 and section 20D, it is clear that the State Legislature intended to adopt the computation of agricultural income made under the provisions of the Central Act. Having specifically said so in the above sections of the Act, if the Legislature wanted to deviate from that scheme of the Act, it could have in clear terms provided for a power being vested with its Officers in any given case to recompute the income keeping in mind the revenue of the State but the Legis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not agree with this apprehension expressed on behalf of the State. In our opinion, if while examining the papers produced or liable to be produced before the taxing authorities administering the Income-tax Act, 1961, as contemplated under the proviso to section 49, the State authorities are of the opinion that the Central assessing authority has not made a proper assessment of the agricultural income of the assessee, as required under the Central Act, then it is always open to the State authorities to invoke the jurisdiction of the appellate or revisional authorities under Chapter XX(E) of the Central Act and if they succeed in any such attempt they can always recompute the agricultural income as contemplated Under section 20D of the State Act. Therefore, the above apprehension is baseless and we notice it is only for this limited purpose that the proviso to section 49 of the Act is incorporated by the State Legislature. Having come to the conclusion that the proviso to rule 5 of the Rules to' the extent stated hereinabove, is ultra vires the State Act, we are of the opinion that it is not necessary for us to go into the larger question of constitutional validity of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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