TaxTMI 
TaxTMI 
1961 (7) TMI 4
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....two accounting years under protest. According to him, the Income-tax Act, 1357 Fasli, was ultra vires the legislature. For the account year 1356 Fasli, corresponding to the assessment year, 1357 Fasli, the appellant had urged that the Act could not affect the income of that year, because it came into force only from Azur 1, 1357 Fasli. The appellant also claimed to deduct certain expenses (details of which will be given later) under section 14(5)(a) and (b) of the Act. These were the three matters on which the Income-tax Appellate Tribunal framed the following three questions for the decision of the High Court : " 1. Whether the Hyderabad Income-tax Act is ultra vires in so far as it seems to levy a tax on jagirs and samasthans ? 2. Whether the provision relating to the taxation of income of 1356F in the Hyderabad Income-tax Act is intra vires ? 3. Whether the sum of Rs. 14,390 and Rs. 38,079 or a part thereof could be allowed as revenue deduction under section 14(5)(a) or 14(5)(b) of the Hyderabad Income-tax Act ? " As stated already, all the three questions were answered by the High Court against the appellant. He obtained special leave from this court on three separate p....
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....nd on the nature of their sovereignty. Two such cases of this court considered the legislative powers of His Exalted Highness the Nizam, and in those cases, it was held that the legislative power of the Nizam was not subject to any limitations or control of any kind whatever. The first of these cases, Ameer-un-Nissa Begum v. Mahboob Begum dealt with a Firman issued by His Exalted Highness the Nizam, and in dealing with his powers, in general, and his legislative powers, in particular, it was observed by this court as follows : "It cannot be disputed that prior to the integration of Hyderabad State with the Indian Union an the coining into force of the Indian Constitution, the Nizam of Hyderabad enjoyed uncontrolled sovereign powers. He was the supreme legislature, the supreme judiciary and the supreme head of the executive, and there were no constitutional limitations upon his authority to act in any of these capacities. The 'Firman' were expressions of the sovereign will of the Nizam and they were binding in the same way as any other law ;---nay, they would override all other laws which were in conflict with them. So long as a particular 'Firman' held the field, that alone would....
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.... himself. The Nizam could withhold his assent to a law contrary to the Ain if he chose ; but once he assented to it, the law derived its vitality, not from the act of the Legislative Assembly but from the act of the Nizam. It could not be questioned any more than a Firman issued by the Nizam. The Income-tax Act must, therefore, be regarded as binding upon those affected by its terms, and the question whether it could be introduced in the Legislative Assembly hardly arises. It must be regarded as a law emanating from His Exalted Highness the Nizam, the supreme legislator in the State, whose laws promulgated in any manner were binding upon the subject : see Madhaorao Phalke v. State of Madhya Bharat. The first question was thus answered correctly by the High Court. It remains to consider the third question. In the assessment year 1357 Fasli, a sum of Rs. 14,390 was claimed as expenses under section 14(5)(a) or section 14(5)(b) of the Hyderabad Income-tax Act. A sum of Rs. 38,079 was similarly claimed for the assessment year 1358 Fasli. The sum of Rs. 14,390 has been shown in the assessment year as spent on account of " domestic servants, drummers and other paraphernalia ", which ....
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....r on works of public welfare. (b) Such necessary expenditure as the assessee may incur under any law, (c) Five per cent. of the income chargeable to tax towards necessary expenses." The Tribunal, however, pointed out that the English text published by Government Press, Hyderabad, was slightly different. It reads as follows : " 14. (5) The income from land revenue paid to jagirdar by the occupier of non-khalsa land for its use or possession, the income that arises from renting of trees for extraction of sendhi or toddy, the income from Abkari rentals and the income which under the provisions of section 2(4) is deemed to be 'non-agricultural' income, all such incomes, profits and gains shall be computed after making the following allowances, namely : (a) all such expenditure, not being in the nature of capital, private or personal expenditure, incurred by the assessee in connection with land or its inhabitants for administration or on works of general improvement and benefit ; (b) any compulsory expenditure incurred by such assessee under any law in force ; (c) in respect of compulsory expenditure five per cent. of the income subjected to tax." A literal translation o....