- (1.) The present set of appeals are concerned with the validity of an explanation added retrospectively to Section 26(4) of the Karnataka Agricultural Income Tax Act (hereinafter referred to as 'Act').
(2.) On facts, the present appeals are concerned with the assessment of agricultural income received by a firm after it is dissolved insofar as the income of the firm pertains to actual cash receipts after the firm is dissolved but relating to income earned prior to dissolution.
(3.) Section 26 of the Act reads as follows: - "26. Assessment in case of discontinued company, firm or association - (1) where agricultural income is received by a company, firm or association of persons and the business through which such income is received is discontinued in any year, an assessment may be made in that year on the basis of the agricultural income received during the period between the end of the previous year and the date of the such discontinuance, in addition to the assessment, if any, made on the basis of the agricultural income received in the previous year. (2) Any person discontinuing any such business shall give to the Agricultural Income-tax officer notice of such discontinuance within thirty days thereof and where any person fails to give the notice required by this sub-section, such officer may direct that a sum shall be recovered from him by way of penalty not exceeding the amount of agricultural income-tax subsequently assessed on him in respect of any agricultural income of the company, firm or association of persons up to the date of the discontinuance of the business. (3) Where an assessment is to be made under sub-section (1), the Agricultural Income-tax officer may service on the person whose agricultural income is to be assessed, or, in the case of a firm on any person who was a member of such firm at the time of the discontinuance or, in the case of a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 18 and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section." ;