Case: Mahanth Ramswaroop Das Vs. The State Of Bihar

2. 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 hereinafter to the High Court under S. 28(3) of the Act as arising out of its order.

Reasoning: 6. 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 taxBut this contention was never raised before the taxing authorises and no such question has been referred to this court. The character of the income was accepted to be agricultural 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.