Appeal No 118 of 1955
Appeal from the judgment and order dated May 26 1954 of the PEPSU High Court in Misc
Case No 31 of 1953
G N Joshi and R H Dhebar for the appellant
The respondent did not appear
May 17
The Judgment of the Court was delivered by 149 1162 KAPUR J
This is an appeal under certificate of the Pepsu High Court and the question for decision relates to the applicability of the Indian Incometax Act 1922 to the erstwhile Pepsu area in the years of assessment 1948 49 and 1949 50
The assessee company the respondent before us was incorporated in the Patiala State and had its registered office at Surajpur in Pepsu
For the year of assessment 1948 49 the company failed to deduct from out of the remuneration paid to its managing agents who were non residents the income tax and the supertax which it under the law was required to do
It also paid to its auditors auditing fees and from out of this sum also it did not deduct the income tax and super tax under the provisions of the Patiala Incometax Act
The two sums in dispute were Rs 59787 1 0 and Rs 581 40 respectively
For the assessment year 1949 50 also the assessee company failed to make the deduction from the remuneration paid to its managing agents and the income tax deductible was Rs 52484 14 0 and super tax Rs 21611 6 0
The Income tax Officer took action against the assessee company under sections 183A and 187 of the Patiala Income tax Act and consequently issued two demand notices for the amounts above mentioned
Against this order of the Income tax Officer the assessee company took an appeal to the Appellate Assistant Commissioner who reduced the amount demanded but did not decide the question whether the assessee company was bound to make the deductions or not
The assessee company then appealed to the Income tax Appellate Tribunal and it held that under section 187 of the Patiala Incometax Act no order was required to be passed by the Income tax Officer and that no appeal lay to the Appellate Assistant Commissioner against the order under section 183A as there was no provision for it under the Patiala Income tax Act
Before the Tribunal it was contended that at the time when the appeals were decided by the Appellate Assistant Commissioner the Patiala Income tax Act had ceased to be in force and therefore the appeals were sustainable under the provisions of the Indian Income tax Act which had been 1163 extended to all Part B States by section 13 of the Indian Finance Act of 1950 XXV of 1950 but this contention was repelled and the Tribunal held that the only remedy for the assessee company was to take a revision under section 33 of the Patiala Income tax Act to the Commissioner
The Tribunal at the request of the assessee company referred the following three questions for the opinion of the High Court 1Whether the appeals before the Appellate Assistant Commissioner fell to be decided in accordance with the provisions of the Patiala Income tax Act or the Indian Income tax Act  2Whether the appeals before the Appellate Tribunal fell to be decided in accordance with the provisions of the Patiala Income tax Act or the Indian Income tax Act  3Whether on the assumption that the assessee company was not bound to deduct tax its appeals before the Appellate Assistant Commissioner were competent in law  The High Court decided that in regard to the assessment year 1948 49 the law applicable was the Patiala Income tax Act and therefore no appeal Jay to the Appellate Assistant Commissioner but in regard to the assessment year 1949 50 the Indian law became applicable and therefore the order of the Income tax Officer was appealable
The Revenue have come up in appeal under a certificate of the High Court and the submission is that to the assessment year 1949 50 also the Patiala Income tax Act applied and not the Indian Income tax Act and therefore the order of the Incometax Officer was not appealable
In order to resolve the controversy reference may be made to certain provisions of the Indian Income tax Act 1922 and the Finance Act of 1950
Section 13 of the Finance Act provides section 13  If immediately before the Ist day of April 1950 there is in force in any Part B State other than Jammu and Kashmir or in Manipura Tripura or Vindya Pradesh or in the merged territory of Cooch Behar any law relating to income tax or super tax or tax on profits of business that law shall cease to have effect except 1164 for the purpose of the levy assessment and collection of income tax and super tax in respect of any period not included in the previous year for the purpose of assessment under the Indian Income tax Act 1922 for the year ending on the 31st day of March 1951 or
for any subsequent year or as the case maybe the levy assessment and collection of tax on profits of business for any chargeable accounting period ending on or before the 31st day of March 1949   Section 13 of the Finance Act of 1950 shows that the Indian Income tax Act became applicable to the assessees residing in any Part B State as from the assessment years 1950 51 or the accounting year 1949 50
The provisions of section 214A of the Indian Income tax Act 1922 show that the Act became applicable to Part B States as from April 1 1950
The relevant provisions of this section are S214A  taxable territories  means d as respects any period after the 31st day of March 1950 and before the 13th day of April 1950 the territory of India excluding the State of Jammu and Kashmir and the Patiala and East Punjab States Union
Provided that the  taxable territories  shall be deemed to include b the whole of the territory of India excluding the State of Jammu and Kashmir i       ii as respects any period after the 31st day of March 1950for any of the purposes of this Act and iii as respects any period included in the previous year for the purpose of making any assessment of the year ending on the 31st day of March 1951 or for any subsequent year It will be noticed that the language used in section 214A proviso b iii is the same as the language under section 13 of the Finance Act of 1950
The effect of the Finance
Act of 1950 is that as regards assessment for the year ending March 31 1951 the Indian Income tax Act 1165 would be applicable accounting year being the year ending March 31 1950 and for any assessment year previous to that the Patiala Income tax Act would be applicable
The effect of section 214A proviso b ii  iii is that taxable territories would comprise the whole of India excluding the State of Jammu and Kashmir as respects any period included in the previous year for the purpose of making an assessment for the year ending March 31 1951 ie for the assessment year 1950 51 or the accounting year 1949 50
The application of the Indian Income tax Act as a result of section 13 of the Finance Act of 1950 was decided in The Union of India V Madan Gopal Kabra 1 which was a case from Rajasthan where there was no income tax in the previous year but the assessee was sought to be assessed for the year 1950 51 under the Indian Income tax Act
It was held that under sub cl
1 of cl
b of the proviso to section 214A the whole of the territory of India including Rajasthan would be deemed  taxable territory  for the purpose of section 4A of the Indian Income tax Act  as respects any period  meaning any period before or after March 31 1950 and the assessee was therefore  liable to income tax
Patanjali Sastri CJ who delivered the judgment of the court said  A close reading of that provision will show that it saves the operation of the State law only in respect of 1948 49 or any earlier period which is the period not included in the previous year 1949 50 for the purposes of assessment for the year 1950 51
In other words there remained no State law of income tax in operation in any Part B State in the year 1949 50 This passage from the judgment supports the contention of the appellant that as regards income of the accounting year 1949 50 or the year of assessment 1950 51 no State law of income tax was operative in any Part B State
It appears that the error which has crept in the judgment of the High Court has been due to misreading the year 1949 50 as being assessment year and not accounting year
In another case D B Madhavakri shnaiah vs The Income Tax Officer 1 1   552
2  150 1166 section 13 of the Finance Act of 1950 was similarly interpreted
Therefore both for the assessment years 1948 49 and 1949 50 the law applicable would be the Patiala Income tax law and not the Indian Income tax Act and consequently no appeal against the order of the  Income tax Officer was competent
The answers to the questions would be as followsQuestions Nos 1  2 The Patiala Income tax Act was in operation and no appeals lay
Question No 3 In the negative
The appeal is therefore allowed but as the respondent I company has not appeared and contested the appeal there will be no order as to costs in this court
Appeal allowed
APPENDIX Reference to the memory of Shri N Chandrasekhara Aiyar Ex Judge of the Supreme Court of India by the Judges and members of the Bar of the Supreme Court of India assembled at a meeting on April 1 1957
Shri section R DAS Chief Justice of India
Solicitor General it is with a heavy heart that I mention to you and the members of the Bar the passing away of Nagapudi Chandrasekhara Aiyar who was an esteemed colleague and a very dear friend
The melancholy news reached me yesterday evening
Nagapudi Chandrasekhara Aiyar was born on January 25 1888
He was educated at Conjeevaram Tirupati and Madras and was a student of the Christian College and the Madras Law College
During his college days he was a keen sportsman interested chiefly in Cricket
This interest in sport he kept up even after he became a District Judge
After a brilliant academic career he was enrolled as a vakil of the Madras High Court in 1910
He worked in the chambers of Dr C P Ramaswami Aiyar whom he used to refer to as his master and for whom he had very high regard
He picked up an extensive practice on the Original Side of the Madras High Court
In July 1927 he became the City Civil Judge and in December of the same year he was appointed as a District and Sessions Judge
He was raised to the Madras High Court Bench in July 1941 and worked there as a Judge until January 25 1948
The State utilised his mature experience in different spheres
He was appointed as a member of the All India Industrial Tribunal Bank Disputes
He was later appointed as a member of the Indo Pakistan Boundary Disputes Tribunal
Shortly thereafter he was appointed a Judge of this Court and was sworn in on September 23 1950
Immediately after his retirement from this Court on January 24 1953 he was chosen as the Chairman of the Delimitation Commission
Towards the end of his term in this Court he fell ill very 151 1168 seriously
He responded to medical treatment and the devoted nursing of his good wife brought him round
That illness however had undermined his otherwise robust health and had left him weak
But undaunted by his physical ailments and in a true spirit of service he moved about from place to place all over India and successfully completed the work of the Commission
Just at that time Chief Justice Mukherjea fell ill and on his advice Nagapudi Chandrasekhara Aiyar was called upon by the President to assist this Court as an ad hoe Judge
This burden he cheerfully accepted and efficiently discharged to the satisfaction of all concerned
Even after this he had to undertake as Chairman further work of delimitation consequent upon the re organisation of the States
Nagapudi Chandrasekhara Aiyar was well grounded in legal principles
To his legal acumen he added his deep insight into human nature and psychology and a robust common sense
On all intricate legal problems presented before the Court he brought to bear a mental freshness which often contributed to their solution
The judgments written and delivered by him which will be found reported in the Law Reports will bear testimony to his legal learning and human sympathies
In his behaviour towards the members of the Bar he was always kind and considerate
Towards his colleagues he was systematically courteous
Nagapudi Chandrasekhara Aiyar s interest in life was not confined to law or within the cloistered compound of a court of law
While he was a sound lawyer and a learned Judge he was also a man of great erudition in Sanskrit and English literature
He was on the one hand the editor of the latest edition of Mayne s Hindu Law he was on the other hand the author of  Anjaneya  which he had dedicated to his master and of Valmiki Ramayana
For those of us who came into close contact with him his ready quotations from our ancient scriptures and literary works of our classical poets were indeed a matter of joy
The Convocation addresses delivered by him were thoughtful and incisive 1169 Nagapudi Chandrasekhara Aiyar above all was a warm hearted man a man of genial temperament and a very friendly person
His bubbling cheerfulness and refreshing sense of humor inevitably dispelled dullness and he had the kindly knack of putting everybody at ease
He was a lively conversationalist full of sparkling humor and cheerful bon homie
Those of us who had the privilege of coming close to him will always miss the glow and the warmth of his kind friendliness
The passing away of an erstwhile esteemed colleague and a friend certainly brings to one s mind a sense of loss and sadness
We remember with gratitude the consideration courtesy and kindness that we always received from him
We request you to convey to his companion in life our sense of admiration for the constant care and devoted attention which she daily bestowed on him and our heartfelt sympathy for her in her dark and dismal day of sorrow
We pray with her for the peace of his soul
Shri C K DAPHTARY Solicitor General of India
My Lord the news of the passing away of Shri Chandra
sekhara Aiyar has come to most of us as an unexpected shock
After his miraculous and seemingly complete recovery from illness a few years ago it was hoped that he would be spared for many years to come to continue his distinguished services to the State
When he came to the Supreme Court Bench he had behind him a record of work in the High Court and in other fields of public life and had won that admiration which is the just due of one who reaches the highest rung of the judicial hierarchy
When he left he had won also respect and confidence by his forthright and robust dealing with problems uncluttered by oversubtlety
He won too affection by his hearty good fellowship and kindliness which embraced all alike senior junior and beginner
By his death the law has lost a notable personality and the state a citizen of outstanding quality who laboured in its service and had death not snatched him away would have continued to render valuable service
1170 One behalf of the Bar and myself I associate myself with the expression of regret and the tribute to Shri Chandrasekhara Aiyar s memory which your Lordship the Chief Justice has so feelingly expressed
Reference to the memory of late Justice  Shri P Govinda Menon Judge of the Supreme Court of India by the Judges and members of the Bar of the Supreme Court of India assembled at a meeting on October 17 1957
Shri section R DAS Chief Justice of India
Additional Solicitor General and Mr Vice President of the Supreme Court Bar Association we have met here again under the shadow of death
All of you must have read in the papers of the sudden demise of Mr Justice P Govinda Menon
When I was with him yesterday afternoon I never thought that his end was so near
P Govinda Menon was born in September 1896
He received his early education in Ganpat High School then in the Zamorin s College Kozhikode and then in the Presidency College and the Law College in Madras
He was enrolled as an Advocate in September 1920 and joined the Madras Bar and practised before the High Court
In December 1940 he was appointed Crown Prosecutor
He proceeded to Japan in April 1946 as the Indian representative before the International Military Tribunal for the Far East at Tokyo
He acted as the Chief Indian Prosecutor from April to September 1946
He  was elevated to the Bench of the Madras High Court in 1947 and was there just over nine years before he was elevated to this Court in August 1956
As a practitioner at the Bar as Crown Prosecutor and as a Judge P Govinda Menon acquitted himself with remarkable success
His suavity of manners and his sweet and amiable disposition endeared him to the members of the Bar and to the Judges
He had a wide circle of friends both at the Bar and outside the Bar
As a Judge of the Madras High Court he presided over almost all the divisions of the Court and had to deal with various typos of cases civil and 1171 criminal
His work as Crown Prosecutor brought him valuable experience and insight into human nature and helped him to acquire a firm grasp of the principles of criminal law and jurisprudence
While upholding the dignity and the majesty of the law he had the capacity and courage of tempering justice with mercy
He did not permit mere technicalities or senseless formalities to stand in the way of dispensing justice
He also heard and disposed of heavy civil appeals and revisions
He had a deep knowledge of Hindu Law and in particular the Marumakattayam and Aliyasantana branches of it
Indeed the chapters on those subjects in the latest edition of Mayne s Hindu Law were written by him
He was generally helpful to the members of the Bar and in particular to the junior section of it who always would appear before him and make their submissions without fear or nervousness
He was a man of studious habits and took interest in literary and cultural subjects
When he came to this Court he brought with him his mature judicial experience and learning and his sense of justice and fairplay
My colleagues and I who sat with him in Court had his assistance and advice in dealing with matters coming up for decision before us He was uniformly courteous lo the members of the Bar as well as to his colleagues on the Bench
He was a conscientious worker which is exemplified by the fact that although he felt definitely out of sorts for about a week before his death he did not take rest lest the work in Court should be dis located and his colleagues and the members of the Bar engaged in the part heard cases should be inconvenienced
Although I assured him that all arrangements had been made for carrying on the Court work he kept on worrying for he did not feel at ease in his mind
It was certainly a strain which I am afraid told upon his health
My colleagues and 1 therefore mourn the passing away of a sound lawyer a good Judge a loyal friend and a conscientious worker  We shall be grateful if you will convey through his son who fortunately was at his bedside at the time of his 1172 death our sincerest condolences to the members of the bereaved family
Shri H N SANYAL Additional Solicitor General of India
My Lords the Indian Bar most respectfully associates itself with what has fallen from Your Lordship
It expresses profound sympathy for the members of the family of Mr Justice Menon
It expresses its deepest sorrow and grief at the sudden death of Mr Justice Menon
In 1920 he became an Advocate of the Bar at Madras and within a short time he became one of its leading members
In 1940 he was appointed Crown Prosecutor in Madras
His name is remembered and will always be remembered that he acted with utmost fairness in conducting cases
In 1946 he went to Tokyo on behalf of India
There he discharged his duties with great ability
He became a Judge in 1947 and within a short time he made himself very popular and won the respect and admiration of the profession
Thereafter he came here as a Judge of the Supreme Court
He had been here only for a short time but in this short time he had made a tremendous impression on the members of the Indian Bar by his unfailing courtesy and his keen desire of doing justice
My Lords Mr Justice Menon was equipped with all the qualities which are essential for the discharge of the great judicial duties of the highest Tribunal in India
In these days when criticisms are so often made I feel it is my duty to point out that here was a Judge who died in harness and never spared himself in spite of illness for one day and up to the last moment when it was physically impossible for him to discharge the heavy duties of his office he attended the Court and gave his very best for the sacred cause that is to say the administration of justice
On behalf of the Indian Bar I am offering our condolence and heart felt sym pathy to the members of his family to his friends and to everyone near and dear to him
Shri N C CHATTERJEE Vice President Supreme Court Bar Association
My Lords on behalf of the members of the Supreme Court Bar Association it is my duty to voice the sentiments and feelings of the 1173 members of the Supreme Court Bar on this solemn occasion
The unexpected and sudden demise of a great and good Judge is a great loss to this Court
It  is also a great loss to the State and to the Nation
The Country has been deprived by the cruel hand of death of the services of an eminent and upright Judge who maintained a very high reputation as a Judge of one of the most important High Courts of India and also a Judge of this august Tribunal
As members of the legal profession we look upon an independent Judiciary as a symbol of sovereignty
If there is one bulwark that guards the freedom of the average citizen it is the Courts of Justice
We are pledged to a strict adherence of the Rule of Law and in these days when the work of the Judiciary is not properly appreciated it gives us some comfort to remember that there are men like Mr Justice Govinda Menon in India who sacrificed his health and life and fell a victim to the sacred cause of Law and Justice
Those of us who had the privilege of enjoying his friendship should remember with gratitude that he was much greater as a man
Unostentatious gentle and kind hearted he won the affection of all who came into contact with him
I am happy to bear testimony to his kindness sympathy and consideration for myself and for many of my colleagues of the Bar
A few years back when I had the privilege of associating myself with an important Bar function in South India I discovered that Mr Justice Menon s courtesy sweet temper and amiable disposition had endeared himself not only to his colleagues on the Bench but also to the members of the Bar
I am happy to say that he maintained the same reputation as a Judge
of this Court
The Law Reports of Madras bear eloquent testimony to his erudition his clear mind and his keen sense of justice
Those of us who had the privilege to appear in his Court would bear testimony to his grasp of principles and the quiet and courteous attention he has bestowed on the cases argued before him
His 1174 judgments were not mere collections of precedents but he dealt with principles with clarity and precision
The highest tribute that I would like to pay to his memory to day is that the juniormost member of the Bar never felt uneasy for a single moment before him
On behalf of the Supreme Court Bar we offer our sincere condolences to the members of the bereaved family
We mourn his death and we pay our homage and tribute of appreciation and affection to the memory of this great Judge and this great gentleman
May his soul rest in peace


Summary:
The respondent was a company incorporated in the former Patiala State with its registered office in the territory of Pepsu a Part B State
For the assessment years 1948 49 and 1949 50 in respect of the amounts of income tax and super tax which it failed to deduct from out of the remuneration paid to its managing agents the Income tax Officer took action under the provisions of section 18 of the Patiala Income tax Act
The Act did not provide for an appeal against the orders of the Income tax Officer under that section and the question for determination was whether an appeal lay under the provisions of the Indian Income tax Act 1922 which was extended to all Part B States with effect from April 1 1950 by section 13 of the Finance Act 1950 and section 214A of the Indian Income tax Act 1922 Held that the result of the extension of the Indian Income tax Act 1922 to Part B States was that that Act was applicable to the assessment years 1950 51 and subsequent years and that for the assessment years 1948 49 and 1949 50 the law applicable was the Patiala Income tax Act
Accordingly an appeal against the order of the Income tax Officer in question was not competent
The Union of India vs Madan Gopal Kabra  and D R Madhavakyishnaiah vs The Income Tax Officer   followed