Gurtu, J. - (1.) The following questions have been referred to us by the Board of Agricultural Income -Tax Uttar Pradesh, for decision: (1) Whether the payment of Rs. 4,754 in respect of Jagir Land of Raja of Jagmanpur is land revenue within the meaning of S. 2(1)(a) of the Agricultural Income -Tax Act. (b) Whether this payment is any case a cess. (2) Whether the Jagir land held by Raja of Jagmanpur and Rampur is subject to cess assessed and collected by an officer of the Provincial Government within the meaning of S. 2(1)(a) of the said Act. These questions have been referred because a controversy has arisen as to whether the two Rajas are liable to pay agricultural income -tax under the Agricultural Income -Tax Act. By virtue of S. 2(1)(a) of the Agricultural Income -Tax Act, agricultural income -tax is chargeable in respect of any rent or revenue derived from land which is used for agricultural purposes and is either assessed to land revenue in the United Provinces or is subject to local rate or cess assessed and collected by an officer of the Provincial Government. The question is whether the land of the Raja of Jagmanpur is assessed to land revenue in the U.P., and in the case of both the Rajas whether their land is subject to a local rate or cess assessed and collected by an officer of the Provincial Government. The Board of Agricultural Income -Tax has held that the Rajas are not liable, because neither are assessed to cess collected as aforesaid, nor is the Raja of Jagmanpur assessed to land revenue. In regard to whether the land is assessed to cess as aforesaid, the view of the Board of Agricultural Income -Tax that it is not, rests upon the language of a Resolution passed in 1872 by his Honour the Lieutenant Governor of the North Western Provinces, which was forwarded to the Board of Revenue, North Western Provinces, for information and guidance and also for communication to the Rajas.
(2.) A copy of that resolution is on the record of the Raja of Rampura's case for the year 1355 Fasli. Paragraphs 5, 6, 7 and 13 are relevant and run as follows: 5. With regard to assessment all these three estates were exempted from village measurement by order of 1st July 1853. Under these orders the amount of annual income of these estates cannot be ascertained by ordinary papers and the local cesses cannot be levied in the manner as is provided in the law. 6. Looking to the aforesaid circumstances and also taking the dignity and honour obtained by the said Raises into consideration the object of his Honour the Lieut. Governor is to maintain the honours, rights and powers granted to these Raises so long as they may continue to observe their duties and functions honestly and judiciously as is proper to their great honours and powers, granted to them by the Government. With the exception of certain matters relating to judicial powers this duty related to general administration such as village, police "repairs of roads etc. As cesses are realised for every such expenses this conclusion is therefore drawn that it is out of justice to realise cesses also from these Jagirs and also to insist on them to appoint officials for the discharge and performance of this arrangement. 7. No cess shall however be realised from these Jagirs but the Commissioners will see that the following conditions dependent on this remission be fully carried into execution. They are that the works of those districts for which cesses are utilised should be sufficient in Jagir estates in the like manner as they are found in other districts. (13) Be it known that this resolution has been recorded simply with a view to decide whether these Jagirs are exempted or not from payment of cesses at the rate of Rs. 10 per cent and if they are exempted what points, are essential for them to be observed in lieu thereof and also that these Rajas may get the rules for suppression of infanticide in force in their estates. But this resolution is not applicable to the (status) and powers of these Jagirdars and it will not affect them.
(3.) The learned Commissioner of Agricultural Income Tax had construed the above paragraphs as imposing a cess on the Jagirdars out exempting them from payment in cash. He had held that maintenance of roads, schools; etc. by the Jagirdars amounted to payment of cesses in kind. The Board of Agricultural Income -Tax found itself unable to agree with that view and pointed out that what S. 2(1)(a) requires is that the land should have been actually assessed to cess and the cess should also have been collected by an officer of the Provincial Government. The Board was of the view that what the resolution quoted above showed was that the Jagirdars would have been liable to be assessed to cess if they had not undertaken to maintain roads, schools, etc & that liability for assessment must be distinguished from actual assessment. The Board further pointed out -that the mere liability to be assessed to cess could not mean that cess had been assessed within the meaning of S, 2(1)(a). It was also pointed out by the Board that the word "collected" was of importance and that it was not even enough that the land should be assessed to cess. But what was further required was that cess should also have been collected and further that collection should have been by an officer of the State of Uttar Pradesh. We are in entire agreement with the view of the Board of Agricultural Income Tax. It is evident that the resolution has exempted the Rajas of Jagmanpur and Rampura from cess. The reason for that exemption no doubt was that they were already spending money on those very purposes which would be the beneficiaries of cess if assessed. But there can be no doubt about it that there was a clear exemption from cess granted by the resolution, and that the Commissioner was directed to see that the benefits which the Rajas were already conferring at their instance & expense, because of which cess had been remitted, were continued. There is nothing to suggest that by this resolution a service cess, it one may so call it, was substituted for a money cess. We are therefore in full agreement on this point with the Board of Agricultural Income -Tax and we answer the Second Question in the negative.;