OMPRAKASH AGARWALLA Vs. AGRICULTURAL INCOME TAX OFFICER

JUDGEMENT

(1.) Some very difficult and intricate questions as to the competence of the Agricultural Income-tax Officer to make an assessment on an assessee deriving income from growing and manufacturing tea without the assessment of such assessee being completed under the Indian Income-tax Act have been raised in this application. It appears that the Bagdogra Tea Estate was owned and managed by a partnership firm of which Maidhandus Agarwalla and certain other persons were the partners. It is alleged in the petition that sometime in September, 1965, the other partners of the firm retired after transferring the said Bagdogra Tea Estate to Maidhandas Agarwalla who has since been managing the said estate on behalf of the Hindu undivided family of which he was the karta. Notices for filing returns of agricultural income of the said Bagdogra Tea Estate for the assessment years 1959-60 to 1964-65 dated the 2nd June, 1965, were issued and the said returns were duly filed. Notices under Section 24(4) of the Bengal Agricultural Income-tax Act (hereinafter referred to as " the Act ") for these various years were served on the said estate calling upon it to produce, inter alia, its books of accounts and other records and the certified copy of the assessment order for the corresponding year under the Indian Income-tax Act. The said notice also informed the assessee that failure to comply with any of the terms of the notice would render him liable to prosecution under Section 53(1) of the Act and to summary assessment under Section 25(5). It is alleged in the petition that the said Maidhandas Agarwalla contended before the Agricultural Income-tax Officer, being the respondent No. 1 herein, that as the assessments under the Central Income-tax Act for any of the aforesaid assessment years had not been completed, it was not possible to furnish certified copies of the said assessment orders. It is further alleged in the petition that in spite thereof the respondent No. 1 proposed to proceed with the assessment of the Bagdogra Tea Estate to agricultural income-tax for the aforesaid years ex parte if there was failure to comply with the aforesaid notices. Several applications under Article 226 were tiled in this court either by the said Maidhandas Agarwalla or after his death by the present petitioner and rules obtained in respect of the assessment years 1960-61, 1961-62 and 1962-63 together with interim orders restraining the respondent No. 1 from taking any steps in pursuance of the said notice under Section 24(4) until the disposal of the rules. Such a rule in respect of the assessment year 1960-61 was obtained on the 20th February, 1967, that, for the year 1961-62 on the 19th December, 1967, and the rule for 1962-63 was obtained on the 19th November, 1968. This rule in respect of the assessment year 1963-64 was issued by me on 2nd January, 1970, on the same terms as the previous rules, with an interim order restraining the respondent No. 1 from taking any steps in respect of the notice under Section 24(4) as in the earlier rules. The said Maidhandas Agarwalla died on the 8th May, 1968, and the present application has been made and the rule obtained by his son, Om Prakash Agarwalla., claiming to be the karta of the joint Hindu family carrying on business under the name and style of Bagdogra Tea Estate. In the petition it has been claimed that in spite of representations being made to the respondent No. 1 by the authorized representative of the tea estate that no certified copy of the order of assessment under the Income-tax Act could be produced as no order of assessment for the relevant year had yet been passed, the respondent No. 1 wanted to make an ex parte assessment though it was not possible for the petitioner to produce any such certified copy before him. It is further submitted that as the petitioner maintains all up to date books of accounts and other particulars for the purpose of assessment of the agricultural income of the said tea estate end is willing to be assessed on the basis of such books of accounts, the respondent No. 1 was illegally insisting on the production of the certified copy of a non-existent order of assessment under the Indian Income-tax Act. It is further submitted in the petition that under the relevant provisions of both the Indian Income-tax Act and this Act the the total income of an assessee which grows and manufactures tea has to be determined by the Income-tax Officer making the assessment under the Indian Income-tax Act and thereafter allocated as to 60 per cent. As agricultural income and 40 per cent. as the income chargeable under the Indian Income-tax Act. Unless such an assessment has been made it is not possible to compute the agricultural income of an assessee growing and manufacturing tea and no assessment to agricultural income-tax can be made until and unless the assessment for the corresponding year has been completed under the Indian Income-tax Act.

(2.) In the affidavit-in-opposition it is not denied that the notice under Section 24(4) did require the petitioner and/or his predecessor-in-interest to produce certified copies of the assessment orders under the Indian Income-tax Act for the relevant years as such certified copies were required under the provisions of the Act for completing the assessment to agricultural income-tax. It is further pointed out that under the provisions of the Act the assessment to agricultural income-tax for the year 1963-64 would be barred on the 31st March, 1970 and the respondent No. 1 was anxious to complete the assessment before such assessment became barred. It is further stated that the assessment to agricultural income-tax of the Bagdogra Tea Estate for the year 1963-64 was completed by respondent No. 1 on 23rd December, 1969. Apparently, the assessment was made as a best judgment assessment.

(3.) At the hearing of this rule it was not disputed by the learned counsel for the petitioners that in respect of all the aforesaid years, rules had been obtained from this court by the said Maidhandas Agarwalla against the Income-tax Officer making the assessments to the Central income-tax and interim orders were obtained permitting the said Income-tax Officer to complete the assessments but not to communicate the orders to the assessee or make any demand in respect thereof. Accordingly, no assessment orders had been served on the petitioner and no certified copies thereof could be obtained by him. Mr. Sen Gupta, the learned counsel for the respondents, has pointed out that the Agricultural Income-tax Officer also could not get copies of the aforesaid assessment orders from the Central Income-tax Officer because of the aforesaid restrictions placed upon him by this court. Mr. Sen Gupta submitted that when the present rule was obtained from me on the 2nd January, 1970, the stay orders against the Central Income-tax Officer were already in operation but this very material fact was not mentioned in the petition or brought to the notice of the court when obtaining the rule and the interim order restraining the respondent No. 1 from giving any effect to the notice under Section 24(1). The result has been that the assessment for the year under consideration was going to be barred. Mr. Sen Gupta submits that on the ground of such suppression of material facts alone the rule should be discharged and the application should be thrown out.