Composition under agricultural income-tax law bars regular assessment until valid revocation of the permission is made.

A valid composition order under section 67 of the Mysore Agricultural Income-tax Act, 1957 kept the assessee outside the ordinary return and assessment machinery for the relevant year. Because no valid order revoking or setting aside that composition was shown, a notice issued to rectify an alleged mistake did not terminate the subsisting permission, and the assessing officer lacked jurisdiction to make a regular assessment. The assessment order also did not record any revocation of composition. The impugned assessment and demand notice were therefore quashed, and the assessee succeeded.

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Issues: Whether a regular assessment to agricultural income-tax could be made while an order granting composition of tax under section 67 of the Mysore Agricultural Income-tax Act, 1957 remained unrevoked.

Analysis: Permission to compound tax under section 67, once validly granted, continued for the year for which it was granted and, by the express terms of sub-section (4) and sub-section (6), the ordinary requirements of return, assessment and matters incidental thereto did not apply to the grantee. The record disclosed no valid order revoking or setting aside the composition order. A notice issued to rectify a supposed mistake did not by itself annul the subsisting composition order, and the assessment order itself did not state that the composition had been revoked. In the absence of a valid revocation, the officer lacked authority to proceed with regular assessment.

Conclusion: The regular assessment was jurisdiction while the composition order remained operative, and the impugned assessment and demand notice were liable to be quashed in favour of the assessee.

Final Conclusion: The subsisting composition order excluded the assessee from regular assessment proceedings, so the writ petition succeeded and the assessment action could not stand.

Ratio Decidendi: Where a statute makes compounding permission operative for the relevant year and expressly excludes regular assessment while that permission remains in force, the assessing authority cannot make a regular assessment unless the composition order is first validly revoked or set aside.

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