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Issues: Whether arrears of agricultural income-tax due from the lessee could be recovered from the landowner under section 23 of the Agricultural Income-tax Act, 1950, on the footing that the lessee's surrender of the land amounted to a transfer of his interest in favour of the landowner.
Analysis: Section 23 applies only where the person in receipt of agricultural income has transferred his interest in the land to another person, so that the transferee may be assessed or made liable in the circumstances contemplated by the provision. A surrender by a tenant ordinarily operates only as an extinguishment of the tenant's rights and a merger of the lesser estate in the greater estate of the landlord. It does not create any transfer of interest from the tenant to the landlord. On that legal characterisation, the lessee's surrender of possession to the landowner did not attract section 23, and the landowner could not be proceeded against for the lessee's arrears through revenue recovery.
Conclusion: The recovery proceedings against the landowner were not sustainable under section 23 of the Agricultural Income-tax Act, 1950, and the challenge by the revenue failed.
Ratio Decidendi: Surrender by a tenant is not a transfer of interest to the landlord; it merely extinguishes the tenant's estate and therefore cannot attract a statutory provision making a transferee liable for the transferor's tax arrears.
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