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Judgment
D. Biswas, J.
By this common judgment, Civil Rule No. 4594 of 1994 ; Civil Rule No. 4596 of 1994 and Civil Rule No. 4598 of 1994 are proposed to be disposed of together as they involve a commonuestion of law.
I have heard Dr. A.K. Saraf, learned senior counsel for the petitioner-company, and Mr. A.K. Goswami, learned state counsel.
In these petitions, the notice dated 6-10-1994 (annexure III), issued by the Agricultural Income Tax Officer, Assam, has been challenged. By the aforesaid notice, the Agricultural Income Tax Officer, Assam, directed the petitioner-firm to submit the details of the allowances statewise computing the same with reference to the statewise export turnover and further re uired the firm to show cause as to why the 60 per cent. deduction allowed will not be added to the agricultural income for the assessment period between 1984-85 and 1988-89. The petition is also for a declaration that rule 5 of the Assam Agricultural Income Tax Rules, 1939, is ultra vires the Act and that the reassessment proposed is also barred by limitation. The notice reads as follows :
"During the assessment proceeding of your company under the Assam Agricultural Income Tax Act, 1939, for the assessment year 1984-85, 1985-86, 1986-87, 1987-88 and 1988-89 your income was assessed to tax without disallowing the deduction u/s 80HHC which was allowed to you in the central assessment before application of rule 8 of the Income Tax Rules. Further, this deduction was allowed without reference to the statewise export turnover. Hence, you are re uired to submit the details of the allowance statewise computing the same with reference to the statewise export turnover. Further, as deduction u/s 80HHC is not allowable before application of rule 8 of the Income Tax Rules, you are re uired to show cause on 21-10-1994, as to why the 60 per cent. of the deduction allowed will not be added to the agricultural income."
It would appear from section 30 of the Act of 1939 that within a period of eight years from the end of the assessment year, the Superintendent of Taxes or the Agricultural Income Tax Officer may issue a notice containing all or any of the re uirements as specified in sub-section (2) of section 19 and may proceed to assess or reassess escaped income under the provisions of the Act. It may be mentioned here that the words "assessment year" have been substituted with effect from 1-4-1989, by the Assam Act No. VI of 1989. Going by the amended provision, I find that the period of eight years from the end of the relevant assessment year expired on 31-3-1993, and 31-3-1994, for the assessment years 1984-85 and 1985-86, respectively. Hence, the notice to the extent it relates to the assessment years 1984-85 and 1985-86 are ex facie barred. Reassessment of escaped income, if any, for the aforesaid two assessment years is not permissible because of delay in issuing the notice.
That apart, Dr. Sarafuestioned the vires of the provisions incorporated in rule 5 of the Rules of 1939 enabling the State Officers for recomputation of agricultural income from tea grown and manufactured in Assam. A detailed discussion of this issue seems to be redundant because the Supreme Court in a recent judgment in Assam Co. Ltd. v. State of Assam AIR 2001 SC 1325, dealt with the sameuestion and declared the proviso to rule 5 of the Rules as ultra vires the State Act to the extent it empowers the State officers to recompute the agricultural income already computed by the Central Officers under the Income Tax Act. It would, therefore, be relevant to reproduce the relevant excerpts from the aforesaid judgment. Theuote (pages 570 and 574-575) :
"The income from cultivation, manufacture and sale of tea being a composite income is exigible to both Income Tax under the Income Tax Act, 1961, and the Assam Agricultural Income Tax Act, 1939.
In this context, being aggrieved by the decision of the Agricultural Income Tax Officer of the State of Assam (State Officer) who refused to accept the computation of agricultural income made by the Income Tax Officer (Central Officer) under the Income Tax Act, 1961 (Central Act), for the purpose of the levy of Assam agricultural Income Tax for the relevant assessment years, assessee-appellants approached the High Court of Gauhati by way of writ petitionsuestioning the authority of the State Officer to recompute the agricultural income already assessed by the Central Officers under the Central Act, and for conse uential reliefs. Their contentions being rejected both by the learned Single Judge and the Division Bench of the High Court of Gauhat Assam Company Ltd. and Another Vs. State of Assam and Others, these appeals/petitions have been preferred . . .
Even u/s 50, we do not see any provision which specifically authorises the State Government to make any such rules in the nature of the proviso to rule 5 of the State Rules. It is an established principle that the power to make rules under an Act is derived from the enabling provision found in such Act. Therefore, it is fundamental that a delegate on whom such power is conferred has to act within the limits of the authority conferred by the Act and it cannot enlarge the scope of the Act. A delegate cannot override the Act either by exceeding the authority or by making provision which is inconsistent with the Act. Any rule made in exercise of such delegated power has to be in consonance with the provisions of the Act, and if the rule goes beyond what the Act contemplates, the rule becomes in excess of the power delegated under the Act, and if it does any of the above, the rule becomes ultra vires the Act. We have already noticed that none of the provisions of the Act has contemplated any power to be vested in the State Officers to recompute the agricultural income from tea while the proviso to rule 5 of the Rules in specific terms empowers the State Officers to recompute the agricultural income from tea different from that which is computed by the Central Officers under the Central Act. Thus, it is seen that this rule is not only made beyond the rule-making power of the state u/s 50 of the Act but also runs counter to the object of the Act itself, and enlarges the scope of the Act. The same also suffers from the other vices pointed out by us hereinabove, hence such a rule, in our opinion, is ultra vires of the Act. Therefore, the proviso to rule 5 of the State Rules to the extent it empowers the State Officers to recompute the agricultural income already computed by the Central Officers is ultra vires the State Act . . .
In our opinion, if while examining the papers produced or liable to be produced before the taxing authorities administering the Income Tax Act, 1961, as contemplated under the proviso to section 49, the state authorities are of the opinion that the Central Assessing Authority has not made a proper assessment of the agricultural income of the assessee, as re uired under the Central Act, then it is always open to the state authorities to invoke the jurisdiction of the appellate or revisional authorities under Chapter XX(E) of the Central Act and if they succeed in any such attempt they can always recompute the agricultural income as contemplated u/s 20D of the State Act. Therefore, the above apprehension is baseless and we notice it is only for this limited purpose that the proviso to section 49 of the Act is incorporated by the State Legislature.
Having come to the conclusion that the proviso to rule 5 of the rules to the extent stated hereinabove, is ultra vires the State Act, we are of the opinion that it is not necessary for us to go into the largeruestion of constitutional validity of the provisions of the State Act on theuestion of repugnancy which was argued on the basis of the presumption that the State Act has made provisions which run counter to the constitutional provisions and the provisions of the Central Act."
The above observation and the decision of the Supreme Court set at rest the controversy with regard to the validity of rule 5. The relief granted by the Supreme Court in that case if extended would meet the ends of justice here as well.
In the result, the writ petitions are disposed of and the notice dated 6-10-1994, to the extent it relates to assessment years 1984-85 and 1985-86 is set aside. The Agricultural Income Tax Officer is directed to reassess the agricultural income of the petitioners for the assessment years 1986-87 to 1988-89 within the limits of the computation of agricultural income from tea made by the Central Officers, subject to their right to seek relief under Chapter XX(E) of the Income Tax Act.