M HARI PRASAD TAMTA Vs. MOHAN LAL SAH

JUDGEMENT

(1.) Mohan Lal Sah filed a suit for recovery of Rs. 12,500 on the basis of a simple mortgage dated 15 March 1936 for Rs. 8000 executed by the defendants Hari Prasad Tamta and Lalta Prasad Tamta who are the appellants before us. The mortgage deed carried interest at nine annas per cent. per annum compound interest with half yearly rests. The defendants pleaded that they were entitled to the benefit of the Agriculturists Relief Act and the Debt Redemption Act. The trial Court held that as Lalta Prasad was assessed to income-tax in the year 1934-35 on the basis of his income in 1933-34 he must be deemed to have been assessed to income-tax on the date when the mortgage deed in suit was executed and the mere fact that he suffered loss and was not assessed to income-tax in 1935-36 would not entitle him to claim that he was an agriculturist and was entitled to the benefits of the Agriculturists Relief Act. The lower Court therefore refused to give the defendants the benefit of the Agriculturists Relief Act and the Debt Redemption Act and decreed the plaintiff's suit in its entirety.

(2.) The only point raised before us is whether the defendants-appellants were or were not entitled to the benefits of the Agriculturists Relief Act and the Debt Redemption Act. The lower Court has relied on a ruling reported in Rajnarain V/s. Bindaban . In that case this Court while dismissing a civil revision observed that the words " is assessed " obviously meant " was assessed at the last occasion," that is to say "was assessed during the last financial year." Since the decision by the Court below there have been two more decisions of this Court. In Brij Jiwandas V/s. Kawal Mani Bibi ( 42) 29 A.I.R. 1942 All. 444 a mortgage deed had been executed on 2 August, 1935. The question was whether the mortgagor was an agriculturist on the date of the execution of the mortgage. The mortgagor was assessed to income-tax in the year 1935-36 on the basis of the income of the year 1934-35, and it was held that he was not an agriculturist. The relevant observations were as follows: Their contention is that Brij Jiwan Das was an agriculturist because, although he was assessed to the payment of income-tax in the year 1935-36, that assessment was made on the income of the year 1934- 35, and that the question whether he was or was not an agriculturist should not depend upon payment of income-tax in the year of assessment but on the receipt of income in the year upon which the assessment was based. In our judgment there is no justification for this argument. The rule in the Agriculturists Belief Act, Section 2 (2), is that no person shall be deemed to be an agriculturist if he is assessed to income-tax with certain provisos with which we are not here concerned. There can be no doubt that Brij Jiwan Das was assessed to income-tax for the year in which he executed the deed of mortgage, and there is nothing in the Act which suggests that it is necessary to go into the question upon what basis that assessment was made. The other case is reported in Ganeshi Lal V/s. Shiam Lal . That was a suit on the basis of a promissory note dated 15 October 1934. The executant had paid income-tax from the year 1931 up to the year ending 30 April 1935, but had not paid income-tax for any of the succeeding years. The suit was instituted on 18 September 1937 on which date the appellant was admittedly an agriculturist. The main point in the case was whether it was necessary for an agriculturist to prove not only that he was an agriculturist on the date of the suit but also on the date of the loan. The case in Rajnarain V/s. Bindaban was considered and it was mentioned that all that was decided in that case was the meaning of the words "is assessed" in proviso 2 to Section 2 (2) of the Act and the learned Judges did not decide the point of time to which the assessment was referable in any particular case. The reference was answered by Collister J. in these terms: I would answer the reference by saying that for a person falling under Section 2(2)(f) the criterion is whether he was assessed to income-tax for the year in which the loan was advanced and to what amount he was thus assessed. (Bajpai and Dar JJ. agreed).

(3.) The use of the words "is assessed," if we may say so, is not a happy one. Income-tax is not assessed on the first day after the close of the previous year, and during a particular financial year the assessment may take place at any time and in some exceptional eases assessment may be delayed even for several years. To illustrate this further, if a document is executed in the financial year 1935-36, i.e., between 1 April 1935 and 31 March 1936, and the executant is assessed to income-tax during that financial year on the basis of his income for the year 1934-35, if the assessment takes place by about the middle of the year, say about July and August, will he be deemed to be an agriculturist if he executes a bond prior to the date of his assessment, and not an agriculturist if he executed the deed after the Income-tax Officer passed an order assessing him to income-tax? It is more likely that the Legislature meant that he was assessable to income-tax in that particular year when it used the words "is assessed" to income-tax. But it is not necessary for us to express any final opinion on the point as we propose to decide this part of the case on another point.