- (1.) The appellant, Venugopala Varma Rajah is the present Rajah of the Venugunad Swaroopan in Palghat District, Kerala State. He is the Karnavan of his Tarwad. He will be hereinafter referred to as the assessee. The predecessor of the appellant as the then Kernavan of the family submitted the return for the assessment year 1959-60 under the Kerala agricultural Income-tax Act (which will hereinafter be referred to as the Act) showing a gross income of Rs. 1,21,912/- and a net income of Rs. 84,065/-60 P. That represented the income from the properties held by him under the family Karar dated May 29, 1909. The Agricultural Income-tax Officer overruling the objection of the assessee included in the income returned, the income of the properties which had been put in possession of the junior members of the family under the aforementioned karar of 1909. The net income so computed was Rupees 2,32,957/- and a tax of Rupees 1,30,672/35 P. was imposed. In appeal the Appellate Authority excluded from the taxable income the income of the properties allotted to the "Rani Group" but sustained the addition of the income of the properties allotted for the enjoyment of the male members. Aggrieved by the order of the Appellate Authority, the assessee took up the matter in second appeal to the Appellate Tribunal of the Agricultural Income-tax. The Tribunal rejected the contention of the assessee and dismissed the appeal. Thereafter at the instance of the assessee, it stated a case under Section 60 (1) of the Act and submitted to the High Court for its opinion three questions of law namely: "(1). Whether the finding of the Tribunal that the family Karar of 1909 does not constitute a diversion of family income to the various allottees thereunder is correct (2) Whether the finding of the a Tribunal that the provisions of sub-section (1) of Section 9 of the Act are applicable only to cases of diversion of income and not otherwise is correct (3) Whether the finding of the Tribunal that the provisions of sub-sec (1) S. 9 of the Act are not applicable to the facts of this case is correct
(2.) Questions Nos. 2 and 3, in our opinion do not bring out the import of Section 9 (1) correctly but it is not necessary to go into the aspect as our decision covers the real point in issue.
(3.) The Reference originally came up for hearing before a Division Bench but as the questions arising for decision were considered to be of importance, the same was referred to a Full Bench of three judges. The High Court by its judgement dated August 16, 1967, reported in AIR 1968 Ker 133 (FB), answered Questions Nos. 1 and 2 against the assessee. It did not answer the third question as it was of the view that answer to that question was unnecessary in view of its findings on Questions Nos. 1 and 2. Thereafter this appeal was brought by certificate.;