1968 PLP 944 (PTD)

"(1) 'Whether the lands in question can be aid to be `karam ozhivu' or tax‑free lands in view of the fact that quit rent and royalty are payable in respect of the lands under the settlement patta? (2) If the lands in question arc to be regarded as tax‑free lands whether the agricultural income derived from such lauds should be excluded in computing the total agricultural income of a person under the Travancore‑Cochin Agricultural Income-tax Act, 1950?" The Travancore‑Cochin Agricultural Income‑tax Act, 1950, is a post-‑Constitution enactment. It was published in the Gazette dated the 6th June 1950, and was brought into force on the 1st April 1951. Article 366 (1) of the Constitution defines "agricultural income" as meaning "agricultural income as defined for the purposes of the enactments relating to Indian income‑tax." According to section 2(1) (a) of the Indian Income‑tax Act, 1922, "agricultural income" means "any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land revenue in the taxable territories or subject to a local rate assessed and collected by officers of the Government as such." Section 2 (1) (a) of the Travancore‑Cochin Agricultural Income‑tax Act, 1950, only says that "agricultural income" means "any rent or revenue derived from land which is used for agricultural purposes." The words "and is either assessed to land revenue in the taxable territories or subject to a local rate assessed and collected by officers of the Government as such" are not embodied in that definition. In Kunhammad Haji v. Agricultural Income‑tax Officer (1960 K L J 517) this Court considered the principles of interpretation applicable to such a definition and said : "Judge in the light of the principles mentioned above, we must hold that the words, `and is either assessed to land revenue in the taxable territories or subject to a local rate assessed and collected by officers of the Government as such, in section 2(1) (a) of the Indian Income‑tax Act, 1922, are implicit in the definition of `agricultural income' in sec tion 2(a) (1) of the Agricultural Income‑tax Act, 1950, and that the Act is not ultra vires the powers of the State Legislature." In view of the above decision with which we are in agreement, it must follow that any rent or revenue derived by the assessee from land which is used for agricultural purposes will be liable to agricultural income‑tax under the Travancore‑Cochin Agricultural Income‑tax Act, 1950, only if such land is either assessed to land revenue in the taxable 'territories or is subject to a local rate assessed and collected by officers of the Government as such. It is not contended that the lands of the assessee are subject to any local rate assessed and collected by officers of the Government as such. The only contention of the Department is that they are assessed to land revenue and as a result the rent or revenue derived by the assessee should be considered as agricul tural income and taxed on that basis.

6. All the lands are covered by a Royal Grant of Kumbhom 994 M. E. The concluding portion of the Grant, which alone is material, reads as follows: "Ulpade nilam 1083 parakkum alit chernna parambukalkum kulangalkum melphalavum kizhphalavum koodi 8820 para nellu paattathinulla vasteuvum . . . . . . karamozhvaittu daanadi krayavikrayangalku yogyatayai naamum nammude anantaravaru kaalangalilum Nanchappayyanum Nanchappayyante putra pautra vamsa paaramparyattil ullavarakkuyum aachandrarkam santati Brahmaswamai anubhavichhu kollathakka vannam urudipoorva daanamaittu kalpichhu naam teettum tannu." "Karam ozhivaittu` means free of taxes and "santati hrahma swom," a perpetual lease granted to a Brahmin for services rendered or to be rendered. What exactly is the meaning of the words "assessed to land revenue" in section 2(1) (a) of the Indian Income‑tax Act, 1922? Do they signify an enforceable liability to pay land revenue? In view of Srish Chandra Sen v. Commissioner of Income-tax ((1961) 41 I T R 340) we propose to proceed on the basis that they do. In that case the land concerned was acquired by the Government of Bengal under the provisions of the Land Acquisition Act of 1857 and then conveyed to the municipal authority of the town of Calcutta in 1870 "for ever discharged from all Government land revenue or any payment or charge in the nature thereof" after obtaining a sum of Rs. 7,728‑13‑8 as the capitalised value of the land revenue. The Supreme Court said: "In fact, no demand or payment or charge in the nature of land revenue could ever be made on it. In view of this, it is, in our judgment, quite satisfactorily established that this land was not assessed to land revenue and the income from it did not fall within section 2(1) (a) of the Income‑tax Act." The Royal Grant of Kumbhom 994 M. E. and the freedom from taxation granted therein were followed by an "Avak asapatram" issued by the State on the 30th September 1907. Paragraph 2 of that 'document shows that a new liability was imposed for the payment of an annual quit rent of Rs. 117‑2‑11 and an annual "Tirumulkazcha" of Rs. 25‑8‑

7. The Cochin State Manual (page 316) and the Cochin Land Revenue Manual (page 3) show that the "Tirumulkazhcha" imposed by 'the State is a royalty cess at the uniform rate of 6 pies on every rupee of the normal land revenue on every holding irrespective of the tenure concerned. We take the view that "Tirumulkazhcha" is an item of land revenue and in view of the liability to pay the same the lands should be considered as assessed to land revenue. Black's Law Dictionary and Ramanatha Aiyar's Law Lexicon define "cess" as an assessment or tax. In this view it is unnecessary to decide whether the quit rent of Rs. 117‑2‑11 can also be characterised as an item of land revenue. That question is not considered in this judgment and is left open for future determination. It follows that the first of the two questions referred has to be answered‑without any reference to the quit rent mentioned therein‑in the negative and against the assessee and that the second does not arise for consideration. We answer the reference accordingly; but in the circumstances of the case without any order as to costs. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be forwarded to the Agricultural Income‑tax Appellate Tribunal, Trivandrum, as required by subsection (6) of section 60 of the Travancore‑Cochin Agricultural Income‑tax Act, 1950. Questions answered accordingly.