RAJENDRA NARAYAN BHANJA DEO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee for the year of assessment was a nobleman of this province. His estate is now included in the province of Orissa. He was assessed under the Income-tax Act to pay tax on an income of Rs. 1,35,619. Out of this income the dispute between the assessee and the department is concerned with an aggregate sum of Rs. 21,171 comprised in four items of sir income, that is to say, income which is derived from his Rajaship over the estate, the four items being : in respect of fisheries Rs. 18,249, market rights Rs. 592, rights of ferry Rs. 1,884 and in respect of income derived from the sale of bones and hides Rs. 445. He claims to hold his estate by virtue of a Treaty engagement entered into by his ancestor in the year 1803 with the British Government of that day. It was entered into at a time when the British were first engaged in subjugating Orissa. THEre is some reason to doubt the historical accuracy of the claim made by the assessee and a considerable part of the decision of the Commissioner of Income Tax is occupied with a partial refutation of that claim. To my mind to decide that question of historical accuracy is no part of our duty, because for the decision of this case the claim made by the assessee in respect of the alleged treaty rights and privileges acquired by him may be assumed, whether the claim be sound or not. By the treaty in question the Raja of that day entered into obligations with the Government of the day by which he assumed certain specified duties towards the East India Company, then the Sovereign power of the country, and am ongst other duties he undertook to pay to the Government an annual tribute of 84,840 Kahnus of Corees which was subsequently translated into Government currency at the rate of 20,408 Sicca Rupees per annum. On the part of the East India Company the engagement, it is said, was that :

(2.) THE assessment has been made upon the items of income amongst others which I have set forth, under Section 6 of the Income Tax Act as income from other sources. It is conceded and rightly conceded on his behalf that but for the historical claim to exemption made on his behalf the income in question of considered with relation to the Income Tax Act alone is certainly taxable. Fur thermore it is conceded, and also properly conceded, that there is nothing in the Income Tax Act which excludes from taxation the income in question. THE argument on behalf of the assessee in confined solely to this very simple point. It is pointed out that in the Income Tax Act there is no express reference to the Raja or to any one of the specific class to which he belongs and there is no repeal of the Treaty relating to him which has statutory force. It is urged therefore that inasmuch as there is no specific repeal of the contractual or, it I may say so, that statutory relationship between himself and the Government it follows that eit her the Income Tax Act in its general terms cannot in the absence of such repeal, be held to apply to him or on the other hand that t he Act, in imposing upon him a taxation which it was solemnly agreed should not be imposed upon him, is ultra vires.

(3.) I would answer this question in the negative and the assessee having failed, must pay ten gold mohurs by way of costs in addition to the Rs. 100 which he has deposited.