S. K. Das, J. - (1.) The Champaran Cane Concern, appe1lant before us, was assessed to agricultural income-tax under the Bihar Agricultural Income-tax Act (Bihar Act 32 of 1948), referred to as the Act in this judgment, by the Agricultural Income-tax Officer Motihari for three years 1356F. 1357F. and 1358F corresponding to 1948-49, 1950-51 and 1951-52 respectively. It was assessed as a partnership firm for all the three years, though the assessee claimed that it was a co-ownership concern belonging to two persons, Padampat Singhania having Rs. 0-40 share and Lala Bishundayal Jhunjhunwala having Rs. 0-12-0 share. The concern, it was stated, carried on agricultural operations in six farms consisting of a little over Ac. 2,000-00 of land out of which about Ac.1,600-00 were purchased jointly by Padampat Singhania and Bishundayal Jhunjhunwala and Ac. 483-00 were purchased in the name of a mill, namely, Motilil Padampat Sugar Mill of which the aforesaid two persons were the owners. Later on by a resolution of the mill - company, the farms were separated from the mill and the lands in their entirety were cultivated by the concern. As nothing now depends upon the distinction between the lands purchased in the name of the mill and those acquired otherwise, we shall ignore the distinction for the purpose of these cases.
(2.) The assessee claimed that the concern was a co-ownership concern belonging to the two persons above named in the shares already indicated, and as they were residents of Uttar Pradesh at a very long distance from the farms in Champaran, they appointed one S.K Kanodia as common manager for facility of cultivation and management. This common manager looked after and managed the agricultural operations during the years in question. The further case of the assessee was that the lands were undivided between the two co-owners and the total net profits arising out of the joint cultivation were divided between the two co-owners. On these statements the assessee pleaded that S. 13 of the Act applied and the common manager should have been assessed in respect of the agricultural income-tax payable by each of the two co-owners in respect of their shares only. This plea of the assessee was rejected by the Income-tax Officer. Appeals were then preferred against the assessments made to the Deputy Commissioner of Agricultural Income-tax. These appeals were dismissed with certain modifications with which we are not now concerned. Then, three applications in revisions were filed to the Board of Revenue. The Board reduced the assessment under schedule C but did not accept the plea of the assessee that the assessments should have been made under S. 13 of the Act. The assessee then moved the Board of Revenue for making a reference to the High Court on the following question of law which it stated arose out of the order of the Board: "Whether on the facts and circumstances of the case the common manager is to be assessed under S. 13 of the Bihar Agricultural Income-tax Act (Bihar Act 32 of 1948) in respect of the agricultural income payable by each of the partners -
(3.) The High Court of Patna was then moved under S. 28 (3) of the Act, and it called for a reference from the Board on a differently worded question which expressed the real issue between the parties: "Whether in the facts and circumstances of the case the common manager should be assessed under Section 13 of the Bihar Agricultural Income-tax Act in respect of the agricultural income-tax payable by the persons jointly liable - The question framed by the High Court did not assume that the co-owners of the concern were partners thereof. Strangely enough when the Board submitted a statement of the case in pursuance of the order of the High Court, it again reverted to the old form of the question. The High Court, however, took the question to be the one which it had asked the Board to refer to it and on that footing answered it against the assessee. The High Court said that the question whether the assessee was a co-ownership concern or a partnership firm was a question of fact, and even otherwise, there were facts and circumstances from which it was open to the taxing authorities to come to the conclusion that the firm was a partnership firm. On this footing the High Court answered the question against the assessee. ;