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10. Now, Sections 3 and 5 of the Act appear in Chap. I, which is headed " taxable income." Section 5 as stated above enumerates the classes of income chargeable to income-tax the " (IV) " class being "income derived from business." Chap, IV of the Act headed " Liability in special cases' contains a group of sections which provide that in the case of minors, lunatics, etc., or persons whose properties are managed by others such as the Court of Wards, Administrator-General, etc. the income-tax would be levied and recoverable from the guardian, trustee, the Court of Wards, etc., as the case may be. There is no doubt that Section 31 and 32 are "machinery" sections. Then comes Section 33 (1). the latter part of which lays down that a non-resident person shall be chargeable to income-tax in the name of the agent of any such person, and such agent shall be deemed to be for the purposes of the Act, the assessee in respect of such income-tax. This part of Section 33(1) therefore also is a "machinery" section.

11. The question is whether the first part of the section is also a machinery section or a charging section. As already pointed out Section 3 provides that income not only accruing, arising or received in British India, but also income which under the provisions of the Act is "deemed to accrue or arise or to be received in British India" is taxable income. The first part of Section 33 (1) lays down that income arising or accruing to a person residing out of British India whether directly or indirectly through or from any business connexion in British India shall be deemed to be income accruing or arising within British India. Taking the language literally, it seems that income accruing or arising to a non-resident person in certain cases though not actually accruing or arising within British India, shall be deemed to be income accruing or arising within British India and reading Section 33 (1) together with Sections 3 and 5 such income is liable to tax. This no doubt would extend far beyond what is recognized in England or had been recognized in British India previous to Act VII of 1918, as the territorial limit of taxation of income derived from business.

30. The principal is chargeable with tax upon income from " business," and unless the expression " business connexion " in Section 33 (1) was used in the same sense as "business" in Section 5, the principal cannot be charged, and a fortiori the agent cannot be charged with the tax. The section accordingly, even as a machinery section, would be useless.

31. The English Finance Act (No. 2) of 1915, Section 31 (2) uses the words " through or from any branch, factorship, agency, receivership or management" and the comprehensive expression " business connexion" was probably used in the Indian Act to cover all those words.

32. Then it is pointed out that the word " property" in Section 42 (1) (which was not in the previous Act VII of 1918) indicates the section could not but be a " machinery " section. It is contended that the profits of "property " in British India must accrue or arise in British India and the fact that the profits of " property" also shall in some cases be deemed to be profits accruing or arising in British India indicates that the section was merely intended to provide for the method in which the tax was to be realized.