Decided on July 06,1966



Somnath Iyer, J. - (1.)WE are concerned in this reference which is made by the Commissioner of Agricultural Income-tax under section 55 of the Mysore Agricultural Income-tax Act, 1957, as it stood before its amendment, with an assessment of agricultural income for the assessment year 1957-58.
(2.)A notice was issued to the assessee on July 15, 1958, under section 18(2) after the expiry of the relevant financial year, but the assessee did, however, produce his return before the assessment was made. The Agricultural Income-tax Officer made an assessment thereafter under section 19(3). That assessment was affirmed by the Deputy Commissioner in appeal, and under section 55(2), as it then stood, the assessee applied to the Commissioner for a reference to this court of the questions of law arising out of the order made by the Deputy Commissioner, and the Commissioner made a reference accordingly. But, by an order of his court made on July 15, 1963, the Commissioner was directed to make a proper reference, and in obedience to that order we have now before us a statement of the case prepared by the Commissioner.
It appears from the statement of the case that, in the year 1956, there was a partition between the assessee, his wife, Indirabai, and his son, and that at that partition there was an allotment of a property to the wife. The assessee who was assessed as an individual contended that the income of that property should be excluded from his income. But the Agricultural Income-tax Officer and the Deputy Commissioner were of the view that the allotment of the property to the wife was a transfer otherwise than for adequate consideration or in connection with an agreement to live apart within the meaning of section 11(2)(a)(iii) of the Agricultural Income-tax Act, and that the income therefrom should be regarded as the income of the assessee.

The other ground on which the assessee resisted the assessment was that the notice under section 18(2) issued by the Agricultural Income-tax Officer for the production of the return was served after the expiry of the relevant financial year. Although the Income-tax Officer said nothing about it, the Deputy Commissioner was of the view that the provision for service of notice contained in section 18(2) was an enabling provision and that the service of notice after the expiry of the financial year had therefore no relevance.

(3.)THE two questions referred to us read :
"1. Whether the lands allotted to Smt. Indira Bai, the wife of the assessee, at the time of the partition of the properties between the assessee and his son amounted to a transfer of assets directly or indirectly within the meaning of section 11(2)(iii) of the Act ?

2. Whether the notice issued in this case on July 15, 1958, and served on July 31, 1958, is illegal and as such the assessment based on such notice is liable to be quashed ?"

We shall first address ourselves to the first question, which, it should be mentioned, is not accurately framed. The statutory provision mentioned is section 11(2)(iii), which should be 11(2)(a)(iii), which reads :

"In computing the total agricultural income of the an individual, there shall be included -

(a) so much of the agricultural income of a wife or minor child of an individual as arises directly or indirectly - .....

(iii) from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with and agreement to live apart."

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