Patna High Court
Province Of Bihar vs Mahant Haribhajan Das Of Andhari. on 1 April, 1942
Equivalent citations: [1942]10ITR399(PATNA), AIR 1942 PATNA 267
JUDGMENT
.
HARRIES, C. J. - This is a reference under Section 25, sub-section (2) of the Bihar Agricultural Income-tax Act made by the Board of Agricultural Income-tax, Bihar. The assessee is a mahant of an asthal in the Darbhanga District, who was assessed to agricultural income-tax for the year 1345 and 1346F. on Rs. 6,228-9-0 and Rs. 6, 106-8-0 respectively. Before the Agricultural Income-tax Officer, the mahant claimed that the income was exempt from taxation under Section 8 of the Bihar Agricultural Income-tax Act, but that officer held that he was liable to taxation on the amounts stated for the years in question. The assessee appealed to the Assistant Commissioner, but his appeal was dismissed. He then moved the Commissioner, who declined to interfere with the assessment of the Agricultural Income-tax authorities. The assessee then applied in revision to the Board of Agricultural Income-tax, but that tribunal held that revision did not lie. The Board was also asked to state a case on two points :
" (1) Whether he (that is the mahant) is exempted form payment of agricultural income-tax under Section 38 of the Act.
(2) Whether if he is not altogether exempted, the assessment for the year 1345 F. which was made under Section 26 of the Act was valid."
The Board of Agricultural Income-tax declined to refer the second question to this Court but held that the first question did involves a question of law and accordingly made a reference to the this Court on this point only.
After consideration of the case as stated by the Board of Agricultural Income-tax, the Court is wholly unable to give any opinion on the question raised, and the case must go back to the Board for a further statement of the case as provided under Section 25 (5) of the Bihar Agricultural Income-tax Act.
The question involved is whether the income of the mahant is exempted form taxation. This income is admittedly agricultural and is taxable under the Act unless it is exempted under Section 8 of the Act. Section 8 of the Bihar Agricultural Income-tax Act is these terms :
" (1) Where the assessee is a trustee and the trust under which he holds is trust created before the commencement of this Act, for public purposes of a charitable or religious nature, any income applied, or finally set apart for application, to any public purpose of a charitable or religious nature in accordance with the terms of the trust subject to which he holds the property from which such agricultural income is derived, shall not be included in the total agricultural income of such assessee.
(2) In this section purposes of a charitable nature include relief of the poor, education, medical relief and advancement of any other object of general public utility."
Before an answer can be given to the question referred to this court by the Board, findings are necessary on a number of question of both fact and law, and it must be remembered that this Court, in dealing with such references, is not a Court, which can find facts. It must accept the finding of fact of the authority stating the case always provided there is evidence to support such findings. In the present case, the Board must find the necessary fats as to the nature of the property held by the mahant and the purposes for which it is held. The section only exempts income from a trust created before the commencement of the Act which is for public purpose of a charitable or religious nature. In the present case, as stated, there is no finding on any of these matters. The Board must find further whether the income of this property or any part thereof is applied for religious or charitable purposes, and if a part only is so applied what is the precise amount. In short, all relevant facts must be found which will support a finding whether the land is held in trust for public purposes of a charitable or religious nature and whether the income therefrom or any part thereof is applied to such objects. Only when such facts are found can an answer be given to the question which has been referred to the Court, namely, whether the mahant is exempted from payment of agricultural income-tax under Section 8 of the Act.
In the statement of the case made by the Board there are no findings of any kind, and the Board merely states that the question involves a point of law and thereupon refers it to this Court. The case stated consists of a brief history of the proceedings before the various tribunals with a reference to the resolution of the Board dealing with the application made to it to state a case. Nowhere does the Board state its view of the facts or its findings on the evidence on the record. Further, the Board expresses no opinion on the question of law raised.
I feel compelled to state that the cases stated by the Board of Agricultural Income-tax up to the present time have been far from satisfactory. I appreciate that the Bihar Agricultural Income-tax Act is a new statute and the Board of Agricultural Income-tax a new body under it. This task of stating cases under Section 25 of the Act is new, and I think it only right that this Court should state what is required from the Board in a reference of this kind. The relevant provision of law is Section 25, sub-sections (1) and (2) of the Bihar Agricultural Income-tax Act, which are in these terms :
" (1) If, in the course of any assessment under this Act or any or any proceeding in connexion therewith other than a proceeding under Chapter VI, a question of law arises, the Board may, either of its own motion or on reference from any agricultural income-tax authority subordinate to it, drawn up a statement of the case and refer it with its own opinion thereon to the High Court.
(2) Within 60 days of the date on which he is served with notice of an order under Section 22 or of an order under Section 24 enhancing an assessment or otherwise prejudicial to him, or of a decision by a board of referees under Section 23, the assessee in respect of whom the order or decision was passed may, by application accompanied by a fee of one hundred rupees or such lesser sum as may be prescribed, require the Board to refer to the High Court any question of law arising out of such order or decision, and the Board, shall, within sixty days of the receipt of such application, drawn up a statement of the case and refer it with its own opinion thereon to the High Court......"
Sub-section (3) of the section provides that if the Board refuses to state a case this Court may call upon it in a proper case to do so.
It will be seen from these provisions that the Board must draw up a statement of the case and refer it with its own opinion thereon to the High Court. Not only must the Board state the case but it is directed also to give its own opinion thereof. In the present case the Board has not stated the facts of the case and has expressed no opinion whatsoever on point of law involved.
The necessity of finding the facts in a case stated by an income-tax authority was stressed in Shiva Prasad Singh v. Emperor. At page 81 Dawson Miller, C. J., observed :
"We desire to take this opportunity of stating for the guidance of the Income-tax Commissioner in future that whilst it is quite proper for him to state his opinion upon the question involved it is his first duty to state clearly and fully the material facts admitted or proved in evidence before him. To adopt any other course must in most cases result in embarrassment and uncertainty when the matter comes before the Court for its decision, the Court being bound by the findings of fact arrived at."
The matter is dealt with by Rankin, C. J., in Gangasagar Ananda Mohan Saha v. Commissioner of Income-tax, Bengal, at p. 2, in these terms :
"I desire to pint out that in these cases it is the duty of the Commissioner of Income-tax to find all the relevant facts. When a case stated comes before the Court, the Court expects to find all such facts stated in the letter of reference as would enable the Court to decide the question referred to it. It is quite true that the Commissioner of Income-tax is required also to give his opinion. He is not merely required to state the questions of law and give his opinion; he is required above all things to state the facts upon which the questions of law must be decided. I trust, therefore, that when this matter comes before the Court again there will be such findings of fact as will enable the Court to apply the law."
In stating a case care must also be taken to set out clearly what are the findings of fact and what are the conclusions of law based on such facts. The two should not be confused, for it must always be remembered that this court is bound by the findings of fact but not by the conclusions of law which may be based on such facts. In Lysaght v. Commissioners of Inland Revenue, Lord Sumner observed :
"It is certainly much to be wished that the Commissioner should be scrupulously careful to say that they "find" a conclusion of fact, arrived at from other facts found, or if they only mean to apply the law as they understand it to be and not to draw any conclusion of fact, should say that they hold so and so in accordance with what they conceive to be the law, for a debate on the meaning of a case stated is an unsatisfactory prelude to a debate on the general law applicable."
In Great Western Railway Co. v. Bater, Lord Atkinson dealt with the same question in these words :
"............ the Commissioners.......... have in this case adopted a mode of framing the case they have state which is, I think, both objectionable and embarrassing. Their determinations of questions of pure fact are not to be disturbed, any more than are the findings of a jury unless it should appear that there was no evidence before them upon which they, as reasonable men, could come to the conclusion to which they have come; and this, even though the Court of review would on the evidence have come to a conclusion entirely different from theirs. With their rulings upon question of law it is entirely different. The Court of review is quite entitled, indeed I think, bound, to overrule their decisions if they think them erroneous. What I have many times in this house protested against is the attempt to secure for a finding on a mixed question of law and fact the unassailability which belongs only to a finding on questions of pure fact. This is sought to be effected by styling the finding on a mixed question of law and fact a finding of fact. What is the proper construction of a statute, or of any other printed or written document, is a question of law............ It is essential, therefore, that the Commissioners should, when stating a case, clearly set forth the conclusions of law at which they have arrived, and separate and distinct from these the conclusions of fact at which they arrived. This is the proper and convenient course of follow. Any other only leads to embarrassment."
As I have already stated, the case as stated does not permit this court to express any opinion on the question raised, and in my view this case must go back to the Board of Agricultural Income-tax for a further statement of the case in accordance with the provisions of Section 25, sub-section (5), of the Bihar Agricultural Income-tax Act. I would, therefore, send the case back for a further statement to be made in accordance with law.
FAZL ALI, J.-I agree MANOHAR LALL, J.-I agree.
Case remanded.