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PETITIONER: MAHANTH RAMSWAROOP DAS

       Vs.

RESPONDENT: THE STATE OF BIHAR.

DATE OF JUDGMENT: 11/01/1961

BENCH: SHAH, J.C. BENCH: SHAH, J.C. KAPUR, J.L. HIDAYATULLAH, M.

CITATION:  1961 AIR 1147            1961 SCR  (3) 405

ACT: Agricultural   Income-tax-Estate  in  management  of   Court Receiver-Owner  if  liable to be assessed to  tax  for  such period-Bihar Agricultural Income-tax Act, XXXII of 1948, ss. 2, cl. (m), 3 and 13.

HEADNOTE: The  appellant was the Mahant of the Asthal Estate in  Bihar which  was in the management of a Receiver appointed by  the Civil Court in a suit relating to the estate.  On appeal the question  that arose for decision in this Court was  whether the  appellant  Mahant was liable to be assessed  under  the Bihar Agricultural Income-tax Act, 1948, to pay agricultural income-tax  for  the  year in which the estate  was  in  the management of the Court Receiver. Held,  that the income though collected by the Receiver  was the income of the appellant.  By virtue of the provisions of ss.  2, cl. (m) and 13 of the Bihar Agricultural  Income-tax Act  it  was  open to the taxing authorities  to  treat  the Receiver  as the assessee because he held the property  from which income was derived, but on that account the income  in the  hand  of  the owner was not exempt  from  liability  to assessment  of  tax.   Section 3 of  the  Act  provides  for charging agricultural income of every   person " as  defined in s. 2, cl. (m) which includes a receiver and S. E3  merely provides  a  machinery for recovery of  tax  from  "Persons" including receivers and is not by itself a charging section.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No.449 of 1958. Appeal  by special leave from the judgment and decree  dated August  7, 1956, of the Patna High Court in Misc.   Judicial Case No. 604 of 1953. 406 D.   P. Singh, for the appellant. S.   P. Varma, for the respondent. 1961.  January 11.  The Judgment of the Court was  delivered by SHAH,  J.-The High Court of Judicature at Patna answered  in

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the  affirmative the following question which was  submitted by  the  Board of Agricultural Income-tax, Bihar,  under  s. 28(3)  of  the Bihar Agricultural Income-tax Act,  XXXII  of 1948-hereinafter referred to as the Act:               "  Whether, in the facts and circumstances  of               the  case,  the petitioner  could  be  legally               assessed for the income of the Estate in  1355               Fasli  when the Estate was in the hand of  the               Receiver ? " With special leave under Art. 136 of the Constitution,  this appeal  is  preferred against the order of the  High  Court. The  appellant is the Mahant of the Asthal Estate,  Salauna, in the District of Bhagalpur in Bihar.  In a suit concerning that  estate,  a Court Receiver was appointed by  the  First Class Subordinate Judge, Monghyr, to manage the estate.  The Receiver  functioned  till sometime in December,  1949,  and under  the  order of the Subordinate Judge  he  handed  over charge  of the estate to the appellant on January  8,  1950. On  January  15, 1950, the appellant submitted a  return  of income of the estate to the Agricultural Income-tax Officer, Monghyr, for the Fasli year 1355 corresponding to  September 16,  1948, to September 15, 1949.  The Agricultural  Income- tax  Officer  assessed on August 7, 1950,  the  agricultural income  of  the  estate at Rs. 90,507-2-6  and  ordered  the appellant to pay Rs. 20,290-13-0 as agricultural income-tax. Appeals  against  the order of assessment preferred  to  the Commissioner  of  Agricultural Income-tax and the  Board  of Agricultural  Income-tax,  Bihar,  were  unsuccessful.   The Board however referred the question set out hereinbefore  to the  High Court under s. 28(3) of the Act as arising out  of its order. The  only  question  which falls to be  determined  in  this appeal is whether the appellant was liable to be assessed to pay agricultural income-tax for the year 407 in  which  the  estate was in the management  of  the  Court Receiver.   Section  3  of the Act  which  is  the  charging section provides:               " Agricultural income-tax shall be charged for               each  financial  year in accordance  with  and               subject  to the provisions of this Act on  the               total agricultural income of the previous year               of every person."               By s. 4,it is provided:                Save as hereinafter provided, this Act  shall               apply to all agricultural income derived  from               land situated in the State of Bihar." The  income  of the estate of the appellant was  not  exempt from  payment  of tax and by virtue of  s.  3,  agricultural income-tax  was charged upon the income for  the  assessment year  in question, and the appellant was prima facie  liable as  owner  of  the estate to pay tax on  that  income.   The appellant  however  relied  upon  s. 13  of  the  Act  which provides:               "  Where  any person holds  land,  from  which               agricultural  income is derived, as  a  common               manager  appointed under any law for the  time               being  in force, or under any agreement or  as               receiver, administrator or the like on  behalf               of persons jointly interested in such land  or               in the agricultural income derived  therefrom,               the   aggregate   of  the  sums   payable   as               agricultural income-tax by each person on  the               agricultural income derived from such land and               received  by  him shall be  assessed  on  such

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             common manager, receiver, administrator or the               like,  and  he  shall  be  deemed  to  be  the               assessee   in  respect  of  the   agricultural               income-tax so payable by each such person  and               shall be liable to pay the same." The appellant urged that if the land from which agricultural income  is derived is held by a Receiver and the  income  is received by the Receiver, the Receiver alone can, by  virtue of  s.  13, be deemed to be the assessee  and  the  Receiver alone  is liable to pay the tax in respect of  that  income. In support of his contention, the appellant relies upon  the definition  of the word., " person " in s, 2, cl. (m)  which estates; 408               Person’  mean,% any individual or  association               of individuals, owning or holding property for               himself  or for any other, or partly  for  his               own benefit and partly for another, either  as               owner,  trustee,  receiver,  common   manager,               administrator  or executor or in any  capacity               recognised  by law, and includes an  undivided               Hindu family, firm or company." In our view, there is no substance in the contention  raised by  the appellant.  The liability to pay tax is  charged  on the agricultural income of every person.  The income  though collected  by the Receiver was the income of the  appellant. By  s. 13, in addition to the owner, the Receiver is  to  be deemed  to be an assessee.  But the fact that  the  Receiver may,  because  he held the property from  which  income  was derived in the year of account, be deemed to be an  assessee and  liable  to pay tax, does not absolve the  appellant  on whose behalf the income was received from the obligation  to pay  agricultural income-tax.  Section 13 merely provides  a machinery  for  recovery  of  tax, and  is  not  a  charging section.   When  property  is  in  the  possession  of   the Receiver,  common  manager  or  administrator,  the   taxing authorities may, but are not bound to, treat such persons as assessees  and  recover  tax.  The  taxing  authorities  may always  proceed against the owner of the income  and  assess the tax against him.  The definition in the connotation  of" person  " undoubtedly included a receiver,  trustee,  common manager,  administrator or executor, and by such  inclusion, it  is open to the taxing authorities to assess tax  against any  such  persons; but on that account, the income  in  the hand of the owner is not exempt from liability to assessment of tax. Counsel for the appellant urged that the income received  by the appellant from the Receiver did not retain its character of agricultural income and therefore also the appellant  was not  liable  to  pay  agricultural  income-tax.   But   this contention  was never raised before the  taxing  authorities and  no such question has been referred to this court.   The character of the income was accepted to be agricultural 409 income  in the hands of the appellant and the only  question which was sought to be referred and raised before the  Board of  Agricultural Income-tax was one as to the  liability  of the appellant to be assessed to agricultural income-tax  for the year in question. In that view of the case, the appeal fails and is  dismissed with costs. Appeal dismissed.