Implied request to remit cheques by post made delivery to the post office receipt of income in taxable territories.

Where payment was stipulated by cheque and the surrounding circumstances showed an implied request to remit the cheques by post, delivery to the post office was treated as delivery to the assessee's agent. The Court held that receipt of the cheques at the place of posting amounted in law to receipt of income within the taxable territories under section 4(1)(a) of the Indian Income-tax Act, 1922. The absence of an express request was immaterial because an implied request could arise from the contract and ordinary business practice. On that basis, the cheque amounts were taxable as income received in the taxable territories.

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Issues: Whether, on the facts of the contracts and the surrounding circumstances, the despatch of cheques by post from Delhi at the request of the payer could be treated as receipt of income by the assessee within the taxable territories under section 4(1)(a) of the Indian Income-tax Act, 1922.

Analysis: The contractual mode of payment was by cheque, the seller was at Baroda, and the Government was in Delhi. The Court held that although there was no express request by the assessee to send the cheques by post, the circumstances and ordinary course of business necessarily implied such a request. In such a situation, the post office became the agent of the assessee for receipt of the payment, and the receipt of the cheques by post amounted in law to receipt of income at the place of posting. The distinction sought to be drawn from the absence of express words was rejected because the principle was that an implied request may arise from the contract and surrounding circumstances.

Conclusion: The cheques were received by the assessee in the taxable territories by reason of the implied request to send them by post, and the amounts were liable to tax.

Final Conclusion: The appeals failed because the Tribunal's view that the cheque payments constituted receipt of taxable income within the taxable territories was upheld.

Ratio Decidendi: Where payment by cheque is stipulated and the surrounding circumstances show an implied request to transmit the cheque by post, delivery to the post office is delivery to the addressee's agent, so the payment is received when posted for transmission.

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