CHETTYAPPAN M Vs. COMMISSIONER OF AGRICULTURAL INCOME TAX

JUDGEMENT

(1.) IN all these writ petitions, a common question arises for my consideration, viz., whether the Commissioner of Agricultural INcome-tax has jurisdiction to grant relief in respect of an item which is exempt from taxation even though that exemption was not claimed before the original authority.

(2.) THE petitioner in W.P. No. 1448 of 1974 is an assessee on the file of the Agricultural Income-tax Officer, Nagercoil, who filed the returns for the assessment year 1971-72, showing a net income of Rs. 85,261. THE Agricultural Income-tax Officer accepted the net income return submitted by the petitioner and levied a tax of Rs. 30,581.60. THEreafter, he discovered that the life insurance premia paid by him amounting to Rs. 11,629.69 was exempt and, therefore, preferred a revision claiming exemption. THE only ground on which the Commissioner of Agricultural Income-tax disallowed the claim was that in the return filed he had not made a claim towards rebate for life insurance premia paid by him during the relevant accounting year. It is to quash this order that this writ petition has been preferred.

(3.) SECTION 10 is one in which the exemption from assessment of agricultural income is catalogued. Therefore, the power of assessment is only subject to this provision. That being so, the amount paid towards the insurance premium will automatically stand exempted. However, in this case, unfortunately such an exemption had not been claimed and it was claimed for the first time in the revision. Nevertheless, can the revisional authority refuse, as he has done, on the single ground that such an exemption was not claimed before the original authority ? I will have to answer this question in favour of the assessee, saying that he cannot refuse. The proper manner in which the question has to be approached is, not as the department contends, that the original order does not suffer from any infirmity. On the contrary, should not the revisional authority have considered this question of exemption irrespective of the fact whether it, was raised before the original authority or not ? If a particular item is exempt, it is not taxable. He has no jurisdiction to assess. Having regard to this jurisdictional issue, I should consider the revisional authority had failed to exercise his jurisdiction vested in him. It matters little whether it was raised before the original authority or not. He should have considered the question of exemption and should have passed such orders as he thought fit. It is well-known that when this phraseology is used, the revisional power is very wide in its amplitude. Having regard to such a power, this question ought to have been considered. The learned counsel for the petitioner is, therefore, well-founded in his submissions. The authorities cited by him also support his stand. There is a case in which under more or less similar circumstances it was held in Pandit Sheo Nath Prasad Sharma v. Commissioner of Income-tax [1967] 66 ITR 647, 651, 652 (All) thus :