Agricultural income aggregation for tax rates upheld; Finance Act did not expand the charging provision.

Agricultural income could be aggregated with non-agricultural income only for fixing the applicable tax rate, while remaining outside taxable total income; the charging provision under the Income-tax Act stayed confined to total income, and the Finance Act was treated as prescribing the rate structure rather than enlarging the charge. The challenge that the Finance Act expanded the scope of taxation therefore failed, and rate-based aggregation of agricultural income was upheld.

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Issues: Whether agricultural income could be aggregated with non-agricultural income for determining the rate of tax and whether the Finance Act enlarged the scope of the charging provision.

Analysis: The assessment treated the assessee's agricultural income as relevant only for rate purposes and not as part of taxable total income. The statutory scheme under the Income-tax Act, 1961 and the annual Finance Act was understood to permit agricultural income to be taken into account for fixing the applicable rate without bringing it to tax as such. The charging provision remained confined to total income, while the Finance Act operated to prescribe the rate structure.

Conclusion: The aggregation for rate purposes was upheld and the challenge to the Finance Act as enlarging the charging section failed, against the assessee.

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