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Judgment
R.P. Sethi, C.J.-Aggrieved by the order of the respondent dated 17-7-1992 the appellants herein filed a petition for quashing the aforesaid orders on the ground of it being contrary to the provisions of the law applicable to the case. The respondent-authority vide its order had rejected the applications filed by the appellants under Section 66(1) of the Karnataka Agricultural Income-tax Act (hereinafter called ''the Act'') seeking benefit of composition. It was submitted that the income of the firm was different from the income of the appellants. It was further contended that the firm was constituted only for the purposes of the management of the estate and pooling the income thereafter. The learned Single Judge dismissed the writ petitions holding that: "if admittedly the firm carries on the management of the estate and pools the income, it cannot be said that the view taken by the authorities is incorrect".
It is submitted that appellants 1 and 2 are sisters and appellants 3 to 6 are their children. Appellants 1 and 2 owned certain coffee growing lands which they had inherited from their father. Subsequently, under a registered gift deed executed in May 1972, the appellant 1 gifted away 20% each in her estate to her two daughters viz., appellants 3 and 4. Similarly, the appellant 2 also under registered gift deed of the even date gifted away 20% each in favour of her daughter and son, appellants 5 and 6. It is contended that ever since the date of gift deeds the parties had been in enjoyment of the properties as tenants in common. It was contended that for the efficient management of their lands the appellants had entered into a partnership deed on 20-6-1972. The capital of the firm was Rs. 3.00 lakhs which was contributed by the appellants in the manner and to the extent as detailed in the petition. The partnership was alleged to be meant for management of the business of the firm, sharing of profits and losses. The firm was claimed to be not owning any agricultural land. The returns were submitted to the respondent-authorities ever since the year 1972 which had been assessing each partner on the basis of the total income derived from the lands and in proportion to the shares held by them. The Act is stated to have been amended in the year 1985. Section 66 was incorporated by amendment which provided for composition of agricultural income-tax by persons whose total extent of land under plantation crop did not exceed 25 acres. For the accounting year 1985-86 and assessment year 1986-87 the appellants submitted their application in Form No. 23 as provided under Rule 32 of Karnataka Agricultural Income-tax Rules within the prescribed time. As no order was passed on the application of the appellants praying for composition, they filed Writ Petition Nos. 16813 to 16818 of 1991 in this Court, which were allowed on 5-12-1991 with direction to respondents to decide the matter after affording opportunities to appellants to file objections. Notices were thereafter served on appellants on 6-3-1992 which were replied on 17-3-1992. However, the applications for composition filed by the appellants were rejected by the respondent-authority vide the orders impugned in the writ petition.
The learned Counsel appearing for the appellants has submitted that the order of the respondent-authority was void and contrary to the directions of this Court issued in Writ Petition Nos. 16813 to 16818 of 1991. It is submitted that the firm of the appellants was for a specified purpose and its individual partners being the owners of the land to the extent not exceeding 25 acres each were entitled to the benefit of Section 66 of the Act.
From the record it appears that after the judgment of this Court in Writ Petition Nos. 16813 to 16818 of 1991 decided on 5-12-1991 the respondent issued an endorsement to the appellants herein stating therein:
"For the previous year ended 31-3-1986 i.e., for the assessment year 1986-87 assessment have already been concluded in the status of registered firm vide order in GIR 483 (718) 1986-87, dated 8-7-1987 and the firm M/s. Rippon Valley Estate, Somwarpet has been assessed to a net loss of Rs. 88,818.89 and this net loss has been apportioned amongst all the partners of the firm in their respective profit and loss sharing ratio. As such there is no assessment pending for the previous year ended 31-3-1986 i.e., for the assessment year 1986-87. Further please note that the firm M/s. Rippon Valley Estate in which one of the partners has been dissolved vide partition deed dated 24-2-1987. Your application filed in Form No. 23 for the assessment year 1987-88 onwards have already been compounded vide this office order dated 25-9-1987. As per the order of High Court of Karnataka in Writ Petition Nos. 16813 to 16818 of 1990-91 no composition applications have been pending in this office for the assessment year 1986-87. As you know that as per the provisions of Section 26(4) of the Act after dissolution of the firm the dissolved erstwhile registered firm i.e., M/s. Rippon Valley Estate has been assessed separately for the assessment year 1987-88 and 1988-89 in respect of the coffee supplimentaries received by erstwhile firm for the crop season 1986-87 and earlier seasons".
The appellants were afforded opportunities to file objections or submit explanation with respect to proposed action. They were further afforded opportunity of being heard. The appellants thereafter submitted their detailed objections which were considered by the Authority before passing the order which was impugned in the writ petition. Section 66 of the Act was inserted vide Act 23 of 1985. It provides that:
"Where the total extent of land under plantation crop held by any person does not exceed twenty-five acres and where the whole of such extent is used for deriving agricultural income by growing coffee either exclusively or interplanted with banana, coconut, cardamom, pepper or orange, such person may apply to the prescribed officer for permission to compound the agricultural income-tax payable by him and to pay in lieu thereof a lumpsum at the rate specified in sub-section (2).
In order to avail of the benefit of Section 66 the assessee was under an obligation to show that the extent of land owned by it was not more than the prescribed limit. "Person" for the purposes of aforesaid section has been defined under Section 2(p) of the Act as under:
"Person" means any individual or association of individuals owing or holding property for himself or for any other, or partly for his own benefit and partly for another, either as owner, trustee, receiver, common manager, administrator or executor or in any capacity recognised by law, and includes an undivided Hindu Mitakshara family and Aliyasanthana family or branch, a Marumakkattayam tarward or Tavazhi possessing separate properties, or a Nambudri or other family to which the rule of impartibility applies, a firm or a company, an association of individuals, whether incorporated or not, and any institution capable of holding property".
After perusal of the whole record the respondent-authority came to the conclusion that the individual assessees had failed to prove that they were owning or holding any land under plantation crop in their individual capacity and as partner in M/s. Rippon Valley Estate, the holding exceeded 25 acres, they were not entitled to the benefit of Section 66 of the Act. After considering their previous records, the deed of partnership and the deed of partition, the respondent-authority came to the provisional conclusion for rejection of the application on the following grounds:
"6. Considering all the above aspects from Sl. No. 1/5 M/s. Rippon Valley Estate has been assessed as Registered firm for the previous year ended 31-3-1986 i.e., assessment year 1986-87 vide order in GIR No. 483/(718) of 1986-87, dated 8-7-1988 under Section 19(3) of KAIT Act and a separate order under Section 29 of KAIT Act has been passed vide order dated 8-7-1987 and registration of the firm has been renewed. As you were one of the partners in that firm, you have been assessed already for the previous year ended 31-3-1986 i.e., for assessment year 1986-87.
As being one of the partners during the accounting year 1985-86 i.e., assessment year 1986-87 you have already been assessed under the Act such being the case, once again you cannot be assessed separately under Section 66 of KAIT Act, 1957 and compounding the application filed by you, cannot be accounted.
It is pertinent to quote the provisions of Section 66 of KAIT Act "where the total extent of land under the plantation crop held by any person does not exceed 25 acres such person may apply to the prescribed officer for permission to compound the A.I.T. payable by him and so pay in lieu thereof a lumpsum of the rate specified in sub-section (2)".
It has been confirmed that you were not at all owning any land under plantation crop in your individual capacity apart from share of property in the firm M/s. Rippon Valley Estate during the previous year ended 31-3-1986 i.e., for assessment year 1986-87. Further, the assessment of the firm M/s. Rippon Valley Estate is already been concluded vide order in GIR 483(718) of 1986-87, dated 8-7-1987 under Section 19(3) of KAIT Act for the assessment year 1986-87 in which you were one of the partners. There cannot be two assessments under the Act for the same person. In view of these facts, the application filed by you on 1-4-1987 for the composition of the agricultural income-tax for previous year ended on 31-3-1986 i.e., for the assessment year 1986-87 is proposed to be rejected".
After hearing the objections filed by the appellants and dealing with each one of such objections the respondent-authority held that in terms of the registration granted to the firm and renewal of registration made from time to time it was the firm which was owning and holding the property as person and not its individual partners who are the appellants.
The plea raised by the learned Counsel that the appellants were tenants in common and entitled to composition within the meaning of Section 66 is apparently afterthought and without any substance. The appellants were on facts held to have been filing the returns on behalf of the firm and not in their individual capacity as has been argued before us. The reliance of the learned Counsel on Keshav Laxman v State of Mysore, 1966(2) Mys. L.J. 280 and Puttamma and Others v Agricultural Income Tax Officer, Bangalore and Another, 1980(1) Kar. L.J. 293 and on Writ Petition No. 521 of 1964 is misplaced.
There is no illegality or error of jurisdiction either in the order of the learned Single Judge or of the respondent-authority requiring our interference in these appeals. The appeals are accordingly dismissed but without any order as to costs.