Case: Raja Jagadambika Pratap Narain Singh of Ayodhya, Dist. Faizabad, U.P Vs. Deputy Commissioner (Assessing Authority) Faizabad

2. The appellant was a talukedar of an estate consisting of several villages in the districts of Faizabad, Gonda, Sultanpur, Barabanki and Lucknow. On July 1, 1952 the major part of the estate belonging to the appellant vested in the State of Uttar Pradesh by virtue of a notification issued under the U.P. Zamindari Abolition and Land Reforms Act. What remained with the appellant were parts of some villages within the municipal limits of Faizabad and Gonda3. During the years 1360, 1361 and 1363 Fasli the appellant realised arrears of rent in respect of that part of his estate which had ceased to belong to him. The arrears represented the rent due to the appellant for the year 1359 and prior to that. The appellant was assessed in respect of the arrears of rent received during the relevant previous years 1360, 1361 and 1363 corresponding to the assessment years 1361, 1362 and 1364 Fasli. The appellant went up in appeal against the assessment orders. The Commissioner allowed the appeals and directed the assessing authority to make fresh assessments. During the pendency of the assessment proceedings subsequent to the remand order the appellant raised objection before the assessing authority to the effect that as he had been divested with effect from July 1, 1952 of the land in respect of the agricultural income from which he was being assessed, he could not be deemed to be person in respect of that land. This objection was rejected by the assessing authority. The appellant thereupon challenged his liability to be assessed in respect of the agricultural income for the years 1360, 1361 and 1363 by means of a petition under Article 226 of the Constitution before the High Court4. The petition was referred to a Full Bench in view of the conflict of views expressed by Division Benches of the High Court. The Full Bench as mentioned earlier held that the appellant was liable to be assessed to agriculturalx for the income derived by the appellant even though the land in respect of which the income was realised by the appellant had vested in the State Government. The petition filed by the appellant was consequently dismissed.

Reasoning: 10. The explanation inserted (sic) by the amending Act of 1953 does not, in our opinion, lend any assistance to the appellant. The explanation sought to clarify the doubt which had arisen as to the liability of a person to assessment of agricultural incomes under the Act, in case such a person while owning or holding property in the previous year had subsequently ceased to own or hold that property subsequently. It was declared by the explanation that the words "owning or holding property" in the definition of the person contained in clause (11) of Section 2 of the Act should be deemed never to have required such a person to continue to own or hold the property in the year for which the tax was to be charged. The explanation is an enabling provision and the effect of it is that even if a person ceased to own or hold property in the year for which the tax is to be charged he would still liable provided other conditions are fulfilled11. Reliance has been placed by Mr. Manchanda upon the case of Nalinikant Ambalal Mody v. S.A.L. Narayan Row, C.I.T., Bombay City I (61 ITR 428   : 1966 Supp I SCR 295 : AIR 1967 SC 193  ) with a view to show that liability to pay tax is subject to the provisions of the statute. The above dictum cannot be of much assistance to the appellant in this case because the liability for payment of tax in respect of his total agricultural income which is sought to be fastened upon the appellant is in accordance with the provisions of the Act.