M.C.DESAI,C.J. - (1.) THIS is a case referred under S. 24(4) of the Uttar Pradesh Agrl. IT Act by the Revision Board at the assessee's instance, the question requiring this Court's answer being : "Whether on the facts and having regard to the provisions of S. 25 of the Act, the Board could on the 15th October, 1952, direct a fresh assessment to be made ?"
(2.) THE facts as they appear from the statement are as follows : The gross agricultural income of the assessee is of more than one lakh of rupees and the Collector and not the Sub -divisional Officer is his assessing authority : vide S. 14. Sec. 15(3) lays down that "in the case of any person whose total agricultural income is, in the opinion of the assessing authority, such amount as to render such person liable to payment of agricultural income -tax in any years, he may be served in that year a notice in the prescribed form requiring such person to furnish within such period, not being less than thirty days as may be specified in the notice, a return in the proscribed form....... setting forth ...... his total agricultural income during the previsous years." If the assessing authority is satisfied that a return made under S. 15 is correct and complete it is to assess the agricultural income of the assessee and determine the tax payable by the person. If it finds the return to be incorrect or incomplete it should serve on the person a notice requiring him to attend its office or to produce evidence on a certain date and then it should pass an assessment order assessing the agriculature income and determining the tax payable by the person. If the person fails to make a return or fails to comply with the notice issued under sub -s. (2) or to produce evidence under sub - s. (3) of S. 16 it is required to make the assessment to the best of its judgment. This is the gist of s. 16. There is some difficulty in giving effect to the provisions of S. 16(3) and 14(2). Who is an assessing authority depends upon the gross income but what is the gross income can be determined only when it is assessed under S. 16 after the issue of a notice under S. 15(3). The notice under S. 15(3) is required to be issued by the assessing authority; it is not understood how, before it is known what the gross agricultural income of the assessee is going to be, it can be said whether a Sub -Divisional Officer is the assessing authority or the Collector and how without its being determined at this stage who is going to be the assessing authority a notice can be issued at all. However, in this case a notice under S. 15(3) was issued by a Sub -Divisional officer for the asst. year 1356 Fasli. He found that the gross income of the assessee was of more than one lakh and still assessed him on May 14, 1949, though on the net amount of Rs. 72,000 and odd. On December 23, 1949, the Collector issued a notice contemplated by S. 25 to the assessee stating that some income of his had remained unassessed. This provision reads as follows : "25. If for any reason any agricultural income.... has escaped assessment for any year.... the assessing authority may, at any time within one year of that year, serve on the person liable.... a notice..... and may upon service of such notice proceed to assess or reassess such income, and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under S. 15(3) and (3B)." The assessee contested the notice and the Collector assessed him on June 9, 1950, on a certain additional income. He appealed to the CIT against the assessment order and on March 5, 1952, the CIT allowed the appeal, held that the assessment orders passed by the Collector on June 9, 1950, and by the Sub -Divisional Officer on May 14, 1949, were without jurisdiction, set them aside and ordered that the "whole case shall be reopened by the Collector and fresh assessment of the whole of the income for 1355 F. shall be made by the Collector after giving a notice to the assessee and after giving reasonable opportunity for production of evidence, if any, as required by S. 16(2) and according to the provisions of law." The assessee went up in revision against this order and on October 15, 1952, the Revision Board held that the CIT had no jurisdiction to set aside the assessment order passed by the Sub -Divisional Officer on May 14, 1949, and that since it was without jurisdiction and the fact that it was so was brought to its notice, it should in exercise of its revisional jurisdiction set it aside, while maintaining the order passed by the CIT, itself set aside the Sub -Divisional Officer's assessment order as being without jurisdiction and directed that "fresh assessment will be made according to law." Since the Board passed the order more than six years after the end of the assessment year the question arose whether it could be passed at all or not.
(3.) IN the connected case three questions have been referred to this Court by the Revision Board, they being : "I. Whether having regard to the provisions of S. 25 of the Agrl. IT Act, 1948, the Revision Board was entitled in law to entertain a revision application and direct fresh assessment thereon after the lapse of more than one year from the end of the asst. year (1356 Fasli which corresponds to the period July 1, 1948, to June 30, 1949) ? 2. Whether the applicant is entitled to set off losses determined under S. 6(2)(b) against income arrived at under S. 5 of the Act ? 3. Whether on the facts of the case 60per cent of the income from shade trees of the tea garden for the period April 15, 1948, to June 30, 1949, could be assessed as the applicant's income ?" In question No, 3 "June 30, 1949," is obviously is mistake for June 30, 1948; the question before the Board was regarding income for the year ending June 30, 1948, and it had nothing to do with the period of July 1, 1948, to June 30, 1948. The question, therefore, will be answered in respect of the period April 15, 1948, to June 30, 1948, only. The facts giving rise to them are as follows : The gross income of the assessee is of more than one lakh of rupees. On July 22, 1949, the Collector passed an assessment order on certain income for the asst. year 1356 Fasli ending on June 30, 1949. The State made an application to him subsequently alleging that some income had escaped assessment and praying for proceedings under S. 25. The Collector rejected the application. The State applied in revision to the Board against the assessment order dated July 22, 1949, and the revision application was allowed by the Board on September 18, 1951, and it passed the following order : "The result is that the application is allowed, the assessment order is set aside and the case is remained for fresh assessment in the light of the observations made above." ;