2026 (3) TMI 393

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....2], does not appear to be in conformity with the law laid down by the Constitution Bench of the Hon'ble Supreme Court in the case of Karimtharuvi Tea Estate Ltd. vs. State of Kerala, reported in AIR 1966 SC 1385. 3. The issue to be decided is whether Section 8B of the Assam Agricultural Income Tax (Amendment) Act, 2009 (hereinafter referred to as the "Act"), which was notified in the Assam Gazette Notification dated 12.02.2009 and was deemed to come into force with effect from 01.04.2009, intended to tax the agricultural income of the previous financial year, i.e. 2008-2009. 4. The stand of the writ petitioner is that as the amended Section 8B of the Amended Act came into effect on 01.04.2009, i.e for the financial year 2009-2010, the assessment year for that financial year 2009-2010 would be the year 2010-2011. As per the petitioner, this was in tune with the judgment of the Supreme Court in Karimtharuvi Tea Estate Ltd. (supra). However, the decision of the Division Bench of this Court in M/s Kanoi Estates Private Limited (supra) was not in conformity with the decision of the Supreme Court, as it held that the financial year pursuant to the inclusion of Section 8B of the Ame....

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....o in section 115 JB of the Income Tax Act, 1961, sixty percent of such book profit shall be deemed to be the agricultural income for the purpose of levy of agricultural income tax under this Act of such assessee and the assessee shall be liable to pay agricultural income tax at the rate of ten percent of such agricultural income." 8. As can be seen from the issue formulated by this Court, we have to see whether the Amended Act which came into effect on 01.04.2009, has made the assessment year to be w.e.f. 2009-2010 or 2010-2011, in which case the financial year would be 2008-2009 or 2009-2010 respectively. 9. In the case of Karimtharuvi Tea Estate Ltd. (supra), the Supreme Court in paragraph-8 has held as follows : "8. Now, it is well settled that the Income Tax Act, as it stands amended on the first day of April of any financial year must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force." 10. A reading of the above paragraph-8 shows that it is in two pa....

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....ted only the assessment year of 1940-41, because the amendment did not come into force till the 1st of April, 1940. That means that the old law applied to every assessment year up to and including Assessment year 1939-40" 13. The Supreme Court in Karimtharuvi Tea Estate Ltd. (supra) thus held that the decision in CIT vs. I.S. Lines (supra) is the authority for the proposition that though the subject of the charge is the income of the previous year, the law to be applied is that in force in the assessment year, unless otherwise stated or implied. 14. In the case of Shree Choudhary Transport Company Vs. Income Tax Officer reported in (2021) 13 SCC 401, one of the 4(four) issues that had to be decided was whether sub-clause (i-a) of section 40(a) of the Act, as inserted by the Finance (No.2), 2004 with effect from 01/05/2005, was applicable only from the Financial Year 2005-2006 and hence, not applicable to the Financial Year 2004-2005; and, at any rate, whole of the rigour of the provision cannot be applied to the case. The Supreme Court in the above case held that in Income Tax matters, the law to apply is that in force in the Assessment Year in question, unless stated otherwi....

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....d proviso. The first question to be answered is whether these dates are to apply to the accounting year or the year of assessment. They must be held to apply to the assessment year, because in income-tax matters the law to be applied is the law in force in the assessment year unless otherwise stated or implied. The first datum line therefore affected only the assessment year of 1940-41, because the amendment did not come into force till the 1st of April 1940. That means that the old law applied to every assessment year up to and including the assessment year 1939-40." This decision is authority for the proposition that though the subject of the charge is the income of the previous year, the law to be applied is that in force in assessment year, unless otherwise stated or implied. The facts of the said decision are different and distinguishable and the High Court was clearly in error in applying that decision to the facts of the present case ." 16. In the case of CIT Bombay vs. Scindia Steam Navigation Co. Ltd, the Supreme Court has held that the amendment of an Act which is effective from a date later than the 1st of April of the assessment year does not apply ....