Supreme Court Upholds Board's Decision on Agricultural Income Computation

The Supreme Court upheld the denial by the Board of Revenue of two brothers' request to vary their method of computing agricultural income under the U. P. Agricultural Income-tax Act. The Court ruled that the proviso to section 6(1) restricted the variation to one year only, emphasizing the need for Board permission for any changes post-exercise of the option. The Court found the Board had properly applied its discretion and rejected arguments of discrimination, affirming the constitutional validity of the proviso under Article 14. The Court dismissed the appeals and writ petitions, upholding the decisions of the High Court and the Board of Revenue.

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Issues:
Interpretation of proviso to sub-section (1) of section 6 - Whether restriction on varying method of computation applies to one year only or multiple years.
Application of mind by Board of Revenue in refusing permission to vary method of computation.
Constitutional validity of proviso to sub-section (1) of section 6 under Article 14 of the Constitution.

Analysis:

The Supreme Court heard two appeals and connected writ petitions concerning the interpretation of the proviso to sub-section (1) of section 6 of the U. P. Agricultural Income-tax Act. The appellants, two brothers holding agricultural lands, sought to change their method of computing agricultural income from gross proceeds of sale to a multiple method but were denied permission by the Board of Revenue. The High Court upheld the denial, leading to the appeals. The main issue was whether the proviso restricted the variation in the method of computation to one year only. The Court agreed with the High Court's interpretation that once the option was exercised, no variation could be made without the Board's permission, rejecting the appellants' argument for a limited restriction to one year. The Court emphasized the unqualified language of the proviso and its alignment with the scheme of the Act, emphasizing the absence of a right to vary the method post-return filing.

Regarding the application of mind by the Board of Revenue, the Court found that the Board had considered the relevant factors before refusing permission to the appellants. The Court noted that the Senior Member's approval of the note indicated a thoughtful decision-making process, dismissing the contention that the Board failed to apply its mind. The Court highlighted that the discretion vested in the Board was not per se discriminatory, as sufficient guidance was provided in the Act for the exercise of discretion under the proviso. The Court cited previous judgments to support that discretionary power does not equate to discriminatory power and emphasized the need for reasonableness in the Board's decision-making process.

Lastly, the Court addressed the constitutional validity of the proviso under Article 14 of the Constitution. It rejected the argument that the proviso lacked principles for guidance, leading to potential discriminatory application. The Court held that the provisions of section 6 itself provided adequate guidance for the Board's discretion, requiring a reasonable consideration of relevant factors. The Court declined the appellants' request to adduce additional evidence regarding other cases where the Board had permitted variation, stating that they were not sitting in appeal over the Board. Ultimately, the Court dismissed the appeals and writ petitions, affirming the decisions of the High Court and the Board of Revenue.

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