KARNATAKA AGRICULTURAL INCOME-TAX ACT, 1957

22 of 1957

17th June, 1957

An Act to consolidate and amend the laws providing for the levy of a tax on agricultural income in the State of Karnataka. WHEREAS it is expedient to consolidate and amend the laws providing for the levy of a tax on agricultural income in the State of Karnataka; Be it enacted by the Karnataka State Legislature in the Eighth Year of the Republic of India as follows :

CHAPTER 1 Preliminary

Section1 Short title, extent and commencement

(1) This Act may be called the Karnataka Agricultural Income-tax Act, 1957.

(2) It extends to the whole of the State of Karnataka.

(3) This section shall come into force at once, and the remaining sections of this Act shall come into force 33. w.e.f. 1-10-1957. on such date as the State Government may by notification in the Official Gazette appoint.

Section2 Definitions

(1) In this Act, unless the context otherwise requires,

(a) "Agricultural income" means 44. Sub-clause (1) substituted by Act No. 14 of 1983, s.3(1), shall be deemed to have come into force w.e.f. 1-12-1982. [

(1) any rent or revenue derived from land situated in the State of Karnataka and used for growingplantation crops;

(2) any income derived from such land by

(i) agriculture, or

(ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received him fit to be taken to market, or

(iii) the sale by cultivator or receiver of rent-in-kind of the produce raised or received by him in respect of which no process has been performed other than a process of the nature described in paragraph (ii);

(3) any income derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator, or the receiver of rent-in-kind, of any land with respect to which, or the produce of which, any operation mentioned in paragraphs (ii) and (iii) of sub-clause (2) is carried on:

Provided that the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator or the receiver of the rent-in-kind by reason of his connection with the land requires as a dwelling house or as a store-house or other out-building;

Explanation. Income derived from any building means the receipts by way of rent from the building or portion thereof let out for rent.

(b) "Agricultural income-tax" means the tax payable 11. Substituted for the words "under this Act" by Act No. 31 of 1962, s. 2( 1) and shall be deemed to have come into force w.e.f. 1-4-1962. [under Section 3;]

(c) 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. ["Assistant Commissioner of Agricultural Income-tax"] means a person appointed to be an 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] under Section 17; 44. Clause (cc) inserted by Act No. 29 of 1963, s. 2(1), w.e.f. 1-1-1964. [

(cc) "Appellate Tribunal" means the Tribunal appointed under Section 4 of the Kamataka Sales Tax Act, 1957 (Karnataka Act 25 of 1957);

(d) "Assessee" means a person by whom agricultural income-tax is payable; 55. Clause (d-1) inserted by Act No. 29 of 1976, s. 5(2) and shall be deemed to have come into force w.e.f. 1-4-1975. [

(d1) 66. Substituted for the expression "Assistant Agricultural Income-tax Officer" by Act No. 5 of 1993, s.5, w.e.f. 4-2-1993. ["Agricultural Income-tax Officer"] means a person appointed to be an 77. Substituted for the expression "Assistant Agricultural Income-tax Officer" by Act No. 5 of 1993, s.5, w.e.f. 4-2-1993. [Agricultural Income-tax Officer] under Section 17;

88. Clause (dd) inserted by Act No. 29 of 1963, s. 2(2) and relettered as clause (d-2) by Act No. 29 of 1976, s. 5(2) and shall be deemed to have come into force w.e.f. 1-4-1975. [(d2)] 99. Substituted for the expression "Assistant Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. ["Deputy Commissioner"] means a person appointed to be an 1010. Substituted for the expression "Assistant Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Deputy Commissioner] of Agricultural Income-tax under Section 17;

(e)1111. Clause (e) with explanations omitted by Act No. 29 of 1976, s. 5(3) and shall be deemed to have come into force w.e.f. 1-4-1975. [x x x x x];

Explanation 1.[x x x x x]

Explanation 2.[x x x x x]

(f) "Commissioner" means a person appointed to be the Commissioner of Agricultural Income-tax under Section 17;

(g) "Company" means a company as defined in the Companies Act, 1956 (Central Act 1 of 1956) and includes any foreign association, whether incorporated or not, which the State Government may, by general or special order, declare to be a company for the purposes of this Act;

(h)11. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. ["Joint Commissioner"] means a person appointed to be a 22. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Joint Commissioner] of Agricultural Income-tax under Section 17;

(i) "Dividend" includes

(i) any distribution by a company of accumulated profits, whether capitalized or not, if such distribution entails the release by the company to its shareholders of all or any part of the assets of the company;

(ii) any distribution by a company of debentures or debenture stock to the extent to which the company possesses accumulated profits, whether capitalised or not;

(iii) any distribution made to the shareholders of a company out of accumulated profits, of the company on the liquidation of the compan:

Provided that only the accumulated profits so distributed which arose during the six previous years of the company preceding the date of liquidation shall be so included; and

(iv) any distribution by a company on the reduction of its capital to the extent to which the company possesses accumulated profits whether such accumulated profits have been capitalised or not:

Provided that "dividend" does not include a distribution in respect of any share issued for full cash consideration which is not entitled in the event of liquidation to participate in the surplus assets, when such distribution is made in accordance with sub-clause (iii) or (iv);

Explanation. The words "accumulated profits" wherever they occur in this clause shall not include "capital profit";

33. Clause (j) omitted by Act No. 14 of 1983, s. 3(2) and shall be deemed to have come into force w.e.f. 1-4-1975. [(j) "Earned agricultural income" x x x x x

(k) "Financial year" means the year beginning on the 1st April and ending on the 31st March next following;

(l) "Firm", "partner" and "partnership" have the same meanings, respectively, as in the Indian Partnership Act, 1932 (Central Act IX of 1932) but the expression "partner" shall include any person who being a minor has been admitted to the benefits of partnership;

(m) "Hindu undivided family" includes a family governed by, (i) the Coorg customary law or usage; or (ii) the Madras Nambudri Act, 1932 (Madras Act XXI of 1933); 11. Clause (m1) inserted by Act No. 14 of 1983, s. 3(3) and shall be deemed to have come into force w.e.f. 1-12-1982. [

(m1) 22. Substituted for the expression "Joint Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. ["Additional Commissioner"] means a person appointed to be the 33. Substituted for the expression "Joint Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Additional Commissioner] of Agricultural Income-tax under Section 17;

(n) "Landlord" means any individual who receives rent for land either in cash or kind from a tenant;

(o) "Marumakkattayam tarwad or tavazhi" means a tarwad or tavazhi governed by the Madras Marumakkattayam Act, 1932 (Madras Act XXII of 1933), or the Mapilla Marumakkattayam Act, 1939 (Madras Act XVII of 1939), and in the case of tavazhi possessing separate properties, the provisions of this Act shall apply as if the tavazhi were a tarwad;

(p) "Person" means any individual or association of individuals, owing or holding property for himself or for any other, or partly for his own benefit and partly for another, either as owner, trustee, receiver, common manager, administrator or executor or in any capacity recognised by law, and includes an undivided Hindu Mitakshara family, an Aliyasanthana family or branch, a Marumakkattayam tarwad or a tavazhi possessing separate properties, or a Nambudri or other family to which the rule of impartibility applies, a firm or company, an association of individuals, whether a recipient of income from a firm or association of persons which is dissolved or which has discontinued the business through which agricultural income is received and any institution capable of holding property.

(q) "Plantation crop" means cardamom, coffee, linaloe, orange, pepper, rubber or tea; 11. Explanation inserted by Act No. 8 of 1989, s. 4(1) and shall be and shall be deemed to have been come into force w.e.f. 1-4-1982. [

Explanation. For the purpose of this clause "Plantation crop" shall not include pepper and cardamom grown as subsidiary crops in land used for growing non-plantation crops like Arecanuts and Coconuts;

22. Clause (r) omitted by Act No. 29 of 1976, s. 5(4) and shall be deemed to have come into force w.e.f. 1-4-1975. [(r) "Prescribed" x x x x x;

33. Clause (s) substituted by Act No. 16 of 1988, s. 2, w.e.f. 1-4-1989. [(s) "Previous year" save as otherwise provided in this clause, means the financial year immediately preceding the assessment year:

Provided that in the case of the source of agricultural income newly coming into existence, in the said financial year, the previous year shall be the period beginning with the date on which the source of agricultural income newly comes into existence and ending with the said financial year:

Provided further that "Previous year", in relation to the assessment year commencing on the 1st day of April, 1989, means the period which begins with the date immediately following the last date of previous year relevant to the assessment year commencing on the 1st day of April, 1988, and ends on the 31st day of March, 1989: 44. Third proviso substituted by Act No. 19 of 1989, s. 2, w.e.f. 1-4- 1989. [

Provided also that where the previous year in relation to the assessment year commencing on the first day of April, 1989, referred to in the second proviso exceeds a period of twelve months, the provisions of this Act shall apply subject to the modifications specified in the rules in Schedule A;

(t) "Principal officer" used with reference to any Company or association means:

(i) the secretary, treasurer, manager or agent of the company or association, or

(ii) any person connected with the company or association upon whom the 55. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] has served notice of his intention of treating him as principal officer thereof;

(u) "Registered firm" means a firm registered under the provisions of Section 29;

66. Clause (v) shall be and shall always be deemed to have been substituted by Act No. 25 of 1962, s. 2. [(v) "State" or "State of Karnataka" means the State of Karnataka comprising the territories specified in clauses (a), (b), (c), (d) and

(e) of sub-section (1) of Section 7 of the States Reorganisation Act, 1956 (Central Act 37 of 1956);] 11. Clause (vi) inserted by Act No. 29 of 1976, s. 5(5) and omitted by Act No. 14 of 1983, s. 3(4) and shall be deemed to have come into force w.e.f. 1-12-1982.

[(vi) "Special crop" x x x x x;]

22. Clause (vv) inserted by Act No. 31 of 1962, s. 2(2) and omitted by Act No. 29 of 1976, s. 5(6) and shall he deemed to have come into force w.e.f. 1-4-1975. [(vv) "Super-tax" x x x x x;]

(w) "Total agricultural income" means the aggregate of all agricultural income derived by a person from land situated in the State of Karnataka whether received by him within or without the State computed in accordance with the provisions of Section 5 and includes all income of the description specified in Section 11 and all receipts of the description specified in clause (a), (c) and (d) of Section 12 and any sum which is exempt from tax 33. Substituted for the words, brackets, letters and figures "under clause (e) or clause (g) of Section 12" by Act No. 29 of 1976, s. 5(7) and shall be deemed to have come into force w.e.f. 1-4-1975. [under Section 5-A or under clause (g) of Section 12] or under Section 13;]

(2) The Mysore General Clauses Act, 1899 (Mysore Act III of 1899) shall apply for the interpretation of this Act as it applies for the interpretation of a Karnataka Act.

Held: Since petitioners and carried on agricultural operations in order to harvest and realise the income, the said income was agricultural income within Section 2(1)(a), (2) of the Act. Since petitioners had carried on agricultural operations they were entitled to earned income relief under Section 13 of the Act. Karachi A.S. v Commissioner of Agricultural Income-tax, ILR 1978 Kar. 554 : (1978)1 Kar. LJ. 217. S. 2(1)(a) and (2) Coffee estates Sale of rosewood shade trees If income liable to tax. Govinda Bhat and Venkataswami, JJ. In order to constitute agricultural income two conditions have to be satisfied, viz., (i) the land must be used for growing all or any of the commercial crops and (ii) the income should be derived from such land by agriculture. Unless both the conditions are satisfied, the receipts do not constitute agricultural income. Assessee owned coffee estates, part of the lands was jungle land (described as abandoned coffee area) which was not cultivated under any crop. Assessee sold rosewood timber from both the jungle land and cultivated land. The trees were more than 150 years old and the coffee estates were opened within 100 years. The trees were not found in regular rows. (Shade trees when planted are planted in a systematic manner). The income-tax authorities found that the trees were planted by human agency on the view that rosewood trees are not native to Indian soil but have been imported from Brazil and that they must have been planted after the estates were opened. Held: (1) That the income from sale of timber of rosewood trees from jungle land cannot be regarded as agricultural income, since the condition that the land must be actually used for agricultural purposes in the accounting year had not been satisfied. (2) The finding that the rosewood trees were not of spontaneous growth would ordinarily be a question of fact. But the question was one on which the jurisdiction of the authorities under the Act depended. This being a jurisdictional fact the High Court was entitled to examine the material on the basis of which the inference was drawn. (3) That rosewood was not a native of India was erroneous. (4) The proper inference to be drawn was that the trees were in existence even before the estates were opened and there was no material at all for the Agricultural Income-tax Officer and Commissioner to hold that the trees were planted by human agency. (5) If the trees were of spontaneous growth and were retained as shade trees, the receipt from the sale of timber of such trees would not constitute agricultural income, as the income was not derived from such land by agriculture. (6) Shade trees were absolutely essential for protection of coffee bushes and rosewood was one of the trees recommended therefor. (7) Shade trees in a coffee estate are part of the fixed assets and hence proceeds of sale of timber of shade trees were capital receipts and not taxable as income, irrespective of whether they were planted or were of spontaneous growth. (8) That the assessee received the proceeds of sale not in one lump sum in one year but in the course of more than one year was immaterial, for determining its nature. Consolidated Coffee Estates (1943) Limited v Commissioner of Agricultural Income-tax, Mysore, 76 ITR 29. Ss. 2(l)(a) and 3 Land converted to non-agricultural purpose Raising crops on Income, if liable to tax - Constitution, Article 366 Income-tax Act, 1961. Govinda Bhat C.J. and Venkatachaliah, J. Income derived by employing the land for agricultural purposes, although the land is allowed to be converted into non-agricultural allowed to be convicted into non-agricultural purposes, is chargeable to tax under Section 3 of the Agricultural Income-tax Act, where the assessee has not produced any material to show that the land was revenue free in fact or in law. 41 ITR 340 (SC), rel. on. Hiranyakeshi Sahakare Sakhare Karkhana Niyamit, Sankeshwar v State of Karnataka, ILR 1976 Kar. 1140 : (1976)1 Kar. L.J. 238. Ss. 2(l)(a) and 10(2)(a) Income of minor son When taken into account Agricultural Income What is taxable. Hegde and Mir Iqbal Husain, JJ. Where land is said to be in the ownership of the assessee's minor son, the Income-tax Officer has first to see whether the land in question had been transferred directly or indirectly in the name of the minor by the assessee otherwise than for adequate consideration. If he comes to the conclusion that it has been so done, then he could take into consideration the income of that land in determining the total income of the assessee. If on the other hand he comes to the conclusion that the land belongs to the minor son and is not in any manner hit by Section 11(2), then the provision that has to be applied is Section 10(2)(b). It is only income derived from land which is used for growing all or any of the commercial crops that comes within the ambit of "agricultural income". The Income-tax Officer must take the predominant characteristic of the land the income of which is taken into consideration. The fact that in that land some other crops are subsidiarily grown either as a measure of interspacing or for the purpose of giving rest to the soil is not relevant. Where both commercial and non-commercial crops are grown and a consolidated rent is fixed, the Income-tax Officer has to apportion the rent between the portion used for commercial crops and the portion used for non- commercial crops. Kallappa v Agricultural Income-tax Officer, Belgaum, 1962 Mys. L.J. Jr. 75. Ss. 2(1)(e), (q), 66 and 67 Land used for growing commercial crops other than plantation crops in Section 66 Meaning of. Somnath Iyer and Ahmed AH Khan, JJ. Petitioner grew pepper and cardamom in his land in addition to areca. Areca was a commercial crop and pepper and cardamom were plantation crops. The main crop was areca and pepper and cardamom crops were subsidiary crops. Held: The land was used for growing commercial crops within Section 66 and composition could be sought under Section 67 in respect of the agricultural income derived from such land. The fact that he also grew subsidiary crops like pepper and cardamom, would not disentitle assessee to composition. In the context of the purpose and scheme of Sections 66 and 67, it must be held that the land is used for the purpose to which the section refers, when it is mainly or primarily used for that purpose although subsidiary use of the land was also made. In respect of such a land, classification could be made under Section 66 and composition could be sought under Section 67. The amendment made to the definition of 'plantation crop' with effect from April1,1963, makes no difference to the question whether the land on which subsidiary crops such as pepper and cardamom are grown and the main crop grown is areca, is or is not within the second class in Part II. Venkataraman Annayya Hegde v Agricultural Income-tax Officer, Sirsi, 64 ITR 555 : 1966 Kar. LJ. 99 : (1966)2 Mys. LJ. 327. S. 2(1)(p) Association of Persons Inference. Srinivasa lyengar and Rama Jois, JJ. The assessees were two brothers, their mother and sister had purchased lands in their individual names and they were being enjoyed and cultivated separately and separate khatha and ledger accounts had been maintained for supply of sugarcane and areca, and purchase of manure etc., was also in the individual names. They had taken a joint agricultural loan to meet the consideration payable for the purchase of the property and for raising crops and purchasing a tractor which was registered in the name of one only. Held, the mere fact of the loan being taken jointly by four persons would not ipso facto lead to the conclusion that acquisition of properties would be also the persons jointly; and would not also lead to an inference that it must be managed by them all as a joint property. This would not outweigh the other material facts which clearly indicated that the properties were held and enjoyed separately by four persons. 80 ITR 173 (SC), foll. Bhagirathi Bai v Commissioner of Agricultural Income-tax, 1980(1) Kar. L.J. 290 (DB). Section 2(l)(p) "Person" Definition of It covers individual, association of individuals, whether incorporated or not, Hindu undivided family, etc., any institution capable of holding property Where co-owners hold property jointly though share of each is stated, benefit of levy of tax on share of each, in absence of actual division of property, cannot be given, and they are to be assessed as one unit as association of persons. HELD: The facts of the case show that, the property is owned by the co-owners as the property was jointly purchased and though shares are stated, there is no actual division. Agricultural income-tax is tax on the total agricultural income of the previous year of every person as defined in Section 2(l)(p) of Act. Therefore, the benefit of levy of tax on the shares of each is not available. Therefore, the status of tenants-in-common continues to be that of Association of Persons. Therefore, making assessment of the petitioner as association of persons is not unlawful or illegal and it is in accordance with the provisions of the Act. M/s. Palanjee Estate, Chettalli Post, Kodagu District v Additional Commissioner of Commercial Taxes, Mysore Zone, Mysore and Others, 1998(45) Kar. LJ. 129A (HC) (DB). Ss. 2(l)(p), 3(3) and 10(l)(a) Legatees under Will Management by common manager Assessment. Somnath Iyer and Ahmed All Khan, JJ. The testator under the Will divided his properties into 10 shares. To his two sons he gave 21/2 shares each, to his wife and two daughters one share each and the remaining two shares he disposed of for charity. There was a direction in the Will that the properties shall be managed in a particular way and that so long as that management continued, the income from the properties should be divided into ten equal shares. Out of that income the two sons became entitled to two shares each, the testator's wife and two daughters became entitled to a share each, his two sons-in-law became entitled to a half share each, one share had to be applied for charity and the remaining one share had to be the source of a reserve fund to be utilised for the expenses of management. After the death of the testator, one of the sons of the testator was, under an agreement between the legatees, appointed manager to manage the properties. Held: That the income in the hands of the legatees was assessable as income derived by tenants in common under Section 3(3) of the Act or the income of each one of the persons should be assessed under Section 10(l)(a). The legatees were not assessable as an association of individuals under Section 2(l)(p). The legatees, on the death of the testator, became tenants-in-common and it did not make any difference that a share was given for charitable purposes nor that bequests of the part of the income were made to the sons-in-law. Sections 3(3) and 10(l)(a) are special provisions and if the assessment falls under either of them no further question whether the income is derived by an association of individuals could arise. 59 ITR 728 foll. R.T.N. Punja v Commissioner of Agricultural Income-tax, 1966 Kar. L.J. 85 : 63 ITR 442 : (1966)2 Mys. L.J. 275. Ss. 2(l)(s) and (w) and 3(1) Taxability Requisites. Somnath Iyer and Mir Iqbal Husain, JJ. The taluk of Mudhol originally formed part of the State of Bombay and became part of the new State of Mysore on and from November 1, 1956. The Karnataka Agricultural Income-tax Act came into force on October 1, 1957. Petitioner who owned lands in the taluk was required to file a return of agricultural income for the assessment year 1957-58; and the previous year was April 1, 1956 to March 31, 1957. Held, (1) Section 2(l)(w) and Section 3 require that during the entire period constituting the previous year of the assessee, the land forming the source of his agricultural income should have been situate in the State of Karnataka. (2) Under Section 2(l)(s), (w) and Section 3(1) what was taxable was the income derived by the assessee during the entire period of twelve months. If part of that income was not taxable, there being no total agricultural income taxable under the Act, no part of that entire income was taxable either. 28 ITR 386, foll. H.H. Bhairao Rao Maloji Rao Ghorpade v Agricultural Income-tax Officer, Bagalkot, 46 ITR 778 : 1962 Mys. L.J. 406. Ss. 2(l)(w) and 3(1) amended by Mysore Act 25 of 1962 Land in Belgaum District Assessment of income for 1956-57 Appeal from 1962 Mys. L.J. 406 J.C. Shah, S.M. Sikri and V. Ramaswami, JJ. The effect of the retrospective amendment in the definition of State or State of Mysore made by Amending Act 25 of 1962, is that agricultural income derived from lands situated in Belgaum, Bijapur, Dharwar and Kanara Districts is liable to tax under the principal Act as amended. Whether the Act contemplates assessing income arising during the previous year 1956-57? Whether the Act in assessing that income is inira vires? Order of High Court in W.P. No. 224 of 1959, dated 6-9-1961 and 30-10-1961 set aside. State of Karnataka H.H. Bhairao Malojirao Ghorpade, C.A. Nos. 1176 to 1178 and 1180 of 1965, dated 3-5-1967.

CHAPTER 2 Charge of Agricultural Income-tax

Section3 Charge of Agricultural Income-tax

(1) Agricultural Income-tax at the rate or rates specified in 11. The words "Part I of omitted by Act No. 14 of 1983, s. 4(1) and shall be deemed to have come into force w.e.f. 1-12-1982. [x x x x x] the Schedule to this Act shall be charged for each financial year commencing from the first April 1957 in accordance with and subject to the provisions of the Act, on the total agricultural income of the previous year of every person. 22. Proviso inserted by Act No. 10 of 1987, s. 2, w.e.f. 1-4-1987.

[Provided that where by virtue of any provision of this Act, agricultural income-tax is to be charged in respect of the income of a period other than the previous year, agricultural income-tax shall be charged accordingly]

(2) Where there is included in the total agricultural income of an assessee any income exempted from agricultural income-tax by or under the provisions of this Act, the agricultural income-tax payable by the assessee shall be an amount bearing to the total amount of the agricultural income-tax which would have been payable on the total agricultural income had no part of it been exempted, the same proportion as the unexempted portion of the total agricultural income bears to the total agricultural income.

33. Sub-section (3) omitted by Act No. 14 of 1983, s. 4(2) and shall be deemed to have come into force w.e.f. 1-12-1982.

[(3) x x x x x.]

S.3 Retroactive operation of the section Act is applicable for assessment year 1957-58 Hence company can forward loss under proviso to Section 15. M/s. Ugar Sugar Works Limited v State of Karnataka, 1985(2) Kar. L.J. 53 (DB). Ss. 3, 5(k), 7, 15 and 55 Accounts accepted Allowable deduction If can be reduced or spread over Scope of revisional powers. Sadasivayya and Honniah, JJ. Where the method of accounting regularly employed by the assessee was the cash basis method, and it was not the case of the tax authorities that the agricultural income cannot properly be deducted from the method of accounting regularly employed by the assessee, the agricultural income must be deduced in accordance with the method of accounting and no resort to the proviso to Section 7 of the Act can be had by the officer. In computing the agricultural income, the tax authorities have to give deduction in the accounting year for admissible expenditure. There is no provision in the Act or the Rules which authorises the authorities to spread over a number of years the expenditure incurred in the accounting year and for which the assessee is entitled to deduction under Section 5(k) of the Act. The benefit given to the assessee to carry forward loss and set it off in the following years would be impaired by such unauthorised apportionment. The powers of revision by the High Court under Section 55 of the Act are wide enough to either reverse, affirm or amend the order against which the revision is preferred. A.C, Shive Gowda v State of Mysore, 1966(1) Mys. L.J. 488 : 1966 Kar. L.J. 35. Ss. 3 and 7 Mysore Act, 1955, Section 64 Coffee Planter Compounding for one year Assessment next year Coffee dividend If can be included. Hegde and Mir Iqbal Husain, jj. The marketing of coffee was controlled by the Coffee Act. The growers had to deliver their produce to the Board and were entitled to receive "dividends" representing the price of coffee delivered to the Board and this was received in driblets spread over two or three years. Assessee owned coffee plantations in Old Mysore area and maintained their accounts according to the mercantile system. For the assessment year 1957-58, they compounded their tax liability under Section 64 of the old Mysore Act of 1955. For the next assessment year they submitted a return on the basis of the estimated value of their coffee marketed during the previous year and did not include the dividends received in the previous year. Held, that the dividends received in the previous year in respect of coffee delivered to the Board in prior years cannot be considered for the purpose of agricultural income-tax as their agricultural income of the year in which their dividends were received. In view of the composition under Section 64 of the previous Act, the State had no right to claim a tax in respect of the income derived in the years to which the composition related. If the assessee maintains accounts in accordance with the mercantile system his cash receipts in respect of prior years' dealings are irrelevant, in determining the facts for the assessment year. Narasimhiah Setty v Income-tax Officer, Chickmagalur, 55 ITR 619. Ss. 3 and 37 Income liable to charge Rectification of mistake. Hegde and Ahmed AH Khan, JJ. Section 3 of the Karnataka Act 22 of 1957 imposes a charge on all agricultural income accruing on or after 1-10-1957. To the extent that Section 3 covers, the operation of the Coorg Agricultural Income-tax Act is excluded. Section 37 empowers the Commissioner to correct any mistake which is apparent from the records of revision. Cotacadu and Jeynacadu Estates, Sunticoppa v Commissioner of Agricultural Income-tax, 47 ITR 958 : ILR 1962 Mys. 640 : 1962 My. L.J. 920. Ss. 3(1) and 69 Assessment year 1957-58 Old Mysore area Assessment under 1957 Act. Hegde and Ahmed Ali Khan,JJ/. Income which arose in the old Mysore area for the assessment year 1957-58 (accounting year ending March 31, 1957) is liable to tax under the 1957 Mysore Act, though that Act came into force in October, 1957. There is no conflict between Section 3(1) and Section 69 which deals with repeal and savings. Section 69 is a general section which will have to be read subject to the special Section 3(1). Mallikarjunappa v Agricultural Income-tax Officer, Chickmagalur, 52 ITR 778. Ss. 3(2), 12(e) and (g) and 53-C Super-tax assessment Exemption applicable. Govinda Bhat and Jagannatha Shetty, JJ. The provisions of Section 3(2) and Section 12 apply to the assessment of super-tax under' Chapter VII-A. Provisions relating to exemption and grant of rebate on the sums exempted are provisions relating to assessment. Therefore an assessee is entitled to rebate on income-tax as well as super-tax on the life insurance premia paid and donations made, under Section 3(2) read with Section 12(e) and (g). K.S. Estaran v State of Karnataka, 1971 Kar. L.J. 9 : (1971)2 Mys. L.J. 239. Section 3(3) As amended by Act No. 14 of 1983 Tenants-in-common Return for previous year ending 31-3-1982 filed in July 1983, declaring status as change of law effected on 1-12-1983 deleting Section 3(3) of Act and dispensing with assessment in status of "tenants-in-common" and altered position in law made applicable retrospectively to previous year ending 31-3-1982 Assessing Authority proceeding to assess assessee in status as "association of persons" without affording him opportunity to file revised return and to declare his status in light of change in law Authority cannot suo motu determine status of assessee in absence of assessee's declaration regarding his status and assessment made on basis of such presumed status of assessee is liable to be set aside. HELD: Petitioner had filed its return before 31st of July, 1983. Section 3(3) was deleted by Act No. 14 of 1983 on 1-12-1983 retrospectively making it applicable to the previous year ending 31st March, 1982. At the time when the petitioner filed its returns in the status of tenants-in-common the same was perfectly in order and he could not have imagined that the law would be changed retrospectively. Once the law was changed retrospectively an opportunity in all fairness should have been granted to the petitioner to file a fresh return declaring the status in which he wanted himself to be subjected to. Thereafter it was for the Assessing Authority to arrive at its own conclusion in the given facts and circumstances of the case. The earlier return filed by the petitioner because of the retrospective amendment of the law by Act No. 14 of 1983 could not be treated as a return filed as tenants-in-common. Without a declaration by the petitioner of its status by filing a fresh return, the authorities under the Act could not proceed to determine the status of the return as association of persons specially so because the incidence of tax on association of persons would be more as it is treated as a single unit whereas in tenants in common the incidence of tax was on the individual assessee. ... In spite of request made by the assessee he was not permitted to file the fresh return, which amounts to denial of opportunity to file the fresh return in the changed circumstances because of the retrospective amendment of law by the legislature at a later date. The status of the petitioner could not be changed unilaterally by converting the status of tenants-in-common to that of association of persons. K.A. Chinnappa and Another v State of Karnataka, 1999(46) Kar. L.J. 364 (HC) (DB). S. 3(3) Legatees of separate shares under a Will are assessable as tenants-in-common under and not as association of persons. R.T.N. Punja v Commissioner of Agricultural Income-tax, (1966)2 Mys. L.J. 275. Ss. 3(3) and 10(l)(a) Coheirs Management through common manager Assessment. Srinivasa lyengar, J. The petitioners were heirs of one R who died and had definite shares in the properties. For convenience they had appointed a manager to manage the property and that the profits from the properties were being divided equally. Held, the income of each individual would be brought to tax in the hands of the manager, but only to the extent to which the owner of the property would have been liable. Even on the basis that the petitioners were tenants-in-common the provisions of Section 3(3) of the Act would be attracted and the tax would be assessed at the rate applicable to the agricultural income of each tenant-in-common. In a case of tenants-in-common where a manager is appointed, the tax would have to be assessed on a combined reading of Section 3(3) and Section 10(l)(a) of the Act. Hence to proceed on the basis that the entire income from all the lands managed by the power of attorney holder should be the basis for the purposes of assessment and or composition, is erroneous. Puttamma and Others v Agricultural Income-tax Officer, Bangalore and Another, 1980(1) Kar. L.J. 293. S. 3(3) and Sch. Part I Tenants-in-common Assessment. Govinda Bhat and Venkataswami, JJ. Where under a partition in a HUF, Schedule F properties were not divided by metes and bounds, but the rights of the four brothers was defined as equal and the total extent of areca garden was 13.27 acres and by virtue of the proviso to Part I of the Schedule to the Act income from 5 acres or less or areca garden was not chargeable to tax. Held: (1) F Schedule properties did not remain as family properties but as properties of four brothers, petitioner and his three brothers as tenants-in-common, and petitioner could not be assessed in the status of a HUF. The assessment should be under Section 3(3) of the Act. (2) As the areca garden had not been divided by metes and bounds, petitioner who had a one fourth share therein cannot say that he derives income from 3.31 acres only; but derived income from 3.27 acres, though his share was 1/4th. Petitioner cannot hence claim his share fell below taxable limits under Part I, Schedule P. Cheradappa Pai v Agricultural Income-tax Officer, Puttur, 77 ITR 313. S. 3(3) and Sch. Part I, proviso Members of Joint Hindu family partitioning and holding property as tenants in common Assessment. Govinda Bhat and Venkataswami, JJ. All the properties of the joint-family except areca gardens were partitioned by metes and bounds. As the areca gardens had been granted on long-term leases, they were not divided by metes and bounds but were allotted to the petitioner and his three brothers each being entitled to a fourth share. The total extent of the areca gardens was 13.27 acres. Held: (1) There was a complete partition and not partial partition; the areca gardens did not remain as family properties but became the properties of the four allottees as tenants in common and they should be assessed under Section 3(3) of the Act as tenants-in-common and not in the status of an undivided family. (2) Since the areca gardens had not been divided by metes and bounds, petitioner cannot say that he derived his agricultural income from 3.31 acres only; he derived his income from the 13.27 acres though his interest was 1/4th. Hence he cannot claim that his share if partitioned by metes and bounds would fall below the taxable limit of 5 acres within the proviso to Part I of the Sch. P. Cheradappa Pai v Agricultural Income-tax Officer, Puttur, AIR 1970 Mys. 168 : (1970)1 Mys. L.J. 260.

Section4 Application of the Act

Save as hereinafter provided, this Act shall apply to all agricultural income derived 11. The words "from land situated" omitted by Act No. 14 of 1983, s. 5 and shall be deemed to have come into force w.e.f. 1-12-1982. [x x x x x] in the State of Karnataka by any person whether resident in the State or not.

Section5 Computation of agricultural income

22. Section 5 renumbered as sub-section (1) by Act No. 29 of 1976, s. 6 and shall be deemed to have come into force w.e.f. 1-4-1975. [(1)] The agricultural income of a person shall be computed after making the following deductions, namely:

(a) any sums paid in the previous year on account of

(i) land revenue, local rates and cesses and municipal taxes in respect of the land from which the agricultural income is derived; and

(ii) any excise duty or tax as may be prescribed in respect of the agricultural produce from such land;

(b) any rent paid in the previous year to the landlord, or superior landlord as the case may be, in respect of the land from which the agricultural income is derived;

(c) any expenses incurred in the previous year on the maintenance of any irrigation or protective work constructed for the benefit of the land from which the agricultural income is derived;

(d) any expenses incurred in the previous year, on repairs, in respect of any capital asset which was purchased or constructed for the benefit of the land from which the agricultural income is derived;

(e) in respect of depreciation of buildings, machinery, plant, fencing materials, hose pipes and furniture which are the property of the assessee and which are required for the purpose of deriving the agricultural income, a sum equivalent to such percentage on the written down value thereof as may in any case or class of cases be prescribed and where the buildings have been newly erected, or the machinery or plant being new has been installed, a further sum subject to such conditions as may be prescribed:

Provided that

(1) the prescribed particulars have been duly furnished;

(2) where full effect cannot be given to any such allowance in any year owing to there being no agricultural income chargeable for that year, or owing to the agricultural income chargeable being less than the allowance, then subject to the provisions of the second proviso to Section 15, the allowance or part of the allowance to with effect has not been given, as the case may be, shall be added to the amount of the allowance or depreciation for the following year and deemed to be part 6f that allowance, or if there is no such allowance for that year, be deemed to be the allowance for the next year, and so on for succeeding years; and

(3) the aggregate of all such allowances made under this Act shall, in no case, exceed the original cost to the assessee of the buildings, machinery, plant, or furniture as the case may be;

[Explanation. For the purpose of this clause the property acquired by the assessee on hire purchase basis shall be deemed to be the property of the assessee;]

(f) in respect of any such building, machinery or plant which has been sold or discarded or demolished or destroyed, the amount by which the written down value thereof exceed the amount for which the building, machinery or plant, as the case may be, is actually sold for its scrap value:

Provided that such amount is actually written off in the books of the assessee:

Provided further that where the amount for which any such building, machinery or plant is sold, whether during the continuance of the agricultural operations or after the cessation thereof, exceeds the written down value, so much of the excess as does not exceed the difference between the original cost and the written down value shall be deemed to be profits of the previous year in which the sale took place:

Provided further that for the purposes of this clause, the original cost of a building, the written down value of which is determined in accordance with the Explanation to this section, shall be deemed to be the written down value so determined as at the date of its being brought into use for the purposes of deriving the agricultural income;

(g) any interest paid in the previous year on any amount borrowed and actually spent on any capital expenditure incurred for the benefit of the land from which the agricultural income is derived; 11. Proviso inserted by Act No. 23 of 1985, s. 2(1)(b) and shall be deemed to have come into force w.e.f 1-4-1985.

[Provided that the interest allowable under clauses (g), (h) and (i) shall be the actual interest paid on such loans or the amount calculated at the rate of interest charged by the scheduled banks on such loans whichever is less:] 22. Second proviso inserted by Act No. 7 of 1997, w.e.f. 1-4-1997

[Provided that any interest paid in the previous year on any amount borrowed and actually spent on any capital expenditure of purchase of motor car.

(a) in case of an assessee where the total extent of land under plantation crop is less than fifty acres, such interest shall be restricted to purchase of one motor car; and

(b) in case of other assessees, to purchase of two motor cars.]

(h) where the land from which the agricultural income is derived is subject to a mortgage or other capital charge, any interest paid in the previous year in respect of such mortgage or charge; 33. Proviso substituted by Act No. 23 of 1985, s. 2(l)(b) and shall be deemed to have come into force w.e.f. 1-4-1985.

[Provided that the interest allowable under clauses (g), (h) and (i) shall be the actual interest paid on such loans or the amount calculated at the rate of interest charged by the scheduled banks on such loans whichever is less;]

(i) any interest paid in the previous year on any debt, whether secured or not, incurred for the purpose of acquiring the land from which the agricultural income is derived: 11. Proviso substituted by Act No. 23 of 1985, s. 2(lXb) and shall be deemed to have come into force w.e.f. 1-4-1985.

[Provided that the interest allowable under clauses (g), (h) and (i) shall be the actual interest paid on such loans or the amount calculated at the rate of interest charged by the scheduled banks on such loans whichever is less;]

(j) any interest paid in the previous year on any amount borrowed and actually spent on the land on which the agricultural income is derived:

Provided that the need for borrowing was bona fide having regard to the assets of the assessee at the time: 22. Proviso substituted by Act No. 23 of 1985, s. 2(lXc) and shall be deemed to have come into force w.e.f. 1-4-1985.

[Provided further that the interest allowable under this clause shall be the actual interest paid on such loan or the amount calculated at the rate of interest charged by the scheduled banks on such loan whichever is less;]

(k) any expenditure (not being in the nature of capital expenditure) laid out or expended in the previous year wholly and exclusively for the purpose of deriving the agricultural income; 33. Proviso substituted by Act No. 28 of 1964, s. 2(1) and shall be deemed to have come into force w.e.f 1-4-1964.

[Provided that the following amounts shall not be deemed to be expenditure laid out or expended for the purpose of deriving the agricultural income,

(i) in the case of any firm, any payment of interest, salary, bonus, commission or remuneration made by the firm to any partner of the firm;

(ii) in the case of any company, any expenditure which results directly or indirectly in the provision of any remuneration or benefit or amenity to a director or to a person who has a substantial interest in the company or to a relative of the director or of such person, as the case may be, if in the opinion of the 44. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] any such expenditure is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom;]

55. Item (iii) shall be and shall be deemed always to have been inserted by Act No. 14 of 1983, s. 6(1). [(iii) any sum paid on account of wealth tax under the Wealth Tax Act, 1957 (Central Act XXVII of 1957);] 11. Explanation inserted by Act No. 23 of 1985, s. 2(1)(d) and shall be deemed to have come into force w.e.f. 1-4-1985.

[Explanation. For the removal of doubts it is hereby declared that deductions under this clause shall not include deductions, specifically provided for or allowed under other clauses of this section or rules made under this section;]

(l) such other deductions as may be prescribed generally or in particular cases;

(m) in the case of agricultural income under the head rent or revenue derived from land referred to in sub-clause (1) of clause (a) of Section 2,

(i) any expenses actually incurred in the previous year in the collection of agricultural income;

(ii) any expenses incurred in the previous year on repairs in respect of any capital asset used in connection with the collection of rents due in respect of the land from which the agricultural income is derived;

(n) in the case of agricultural income referred to in sub-clause (2) of clause (a) of Section 2

(i) the expenses other than capital expenditure incurred in the previous year of raising the crop from which agricultural income is derived and of transporting such crop to market, including the maintenance of agricultural implements and cattle required for such cultivation and transport or both;

(ii) the cost incurred in the previous year in the purchase or replacement of cattle or implements, which are necessary for cultivation, to such extent as may be prescribed, less the amount realised by sale of the cattle or implements replaced or their estimated value;

(iii) any sum paid in the previous year in order to effect an insurance against loss or damage of crops or property from which the agricultural income is derived:

Provided that any amount received in respect of such insurance in any year shall be deemed to be agricultural income for the purposes of this Act, and shall be liable to agricultural income-tax after deducting the portion thereof, if any, which has been assessed to income-tax under the 22. Substituted for the words, figures and brackets "Indian Income-tax Act, 1922 (Central Act XI of 1922) by Act No. 29 of 1976, s. 6(i)(b) and shall be deemed to have come into force w.e.f. 1-4-1975. [Income-tax Act, 1961 (Central Act 43 of 1961);]

(iv) any expenses incurred in the previous year on the maintenance of any capital asset if such maintenance is required for the purpose of deriving the agricultural income;

Provided that no deduction shall be made under this section if it has already been made in the assessment under the 11. Substituted for the words, figures and brackets "Indian Income-tax Act, 1922 (Central Act XI of 1922) by Act No. 29 of 1976, s. 6(i)(b). [Income-tax Act, 1961 (Central Act 43 of 1961).] 22. Explanation substituted by Act No. 29 of 1976, s. 6(i)(c) and shall be deemed to have come into force w.e.f. 1-4-1975.

[Explanation 33. Explanation shall be and shall be deemed to have been renumbered as Explanation 1 by Act No. 29 of 1963, s. 3(2), w.e.f. 1-4-1963. [1.] For the purposes of this sub-section 44. Inserted by Act No. 28 of 1964, s. 2(2)(i) and shall be deemed to have come inlo force w.e.f. 1-4-1964. ["building" includes all structures constructed with a view to provide amenities to workers as defined in the Plantations Labour Act, 1951 (Central Act 69 of 1951), employed in plantations] for the purpose of deriving the agricultural income; 55. Inserted by Act No. 28 of 1964, s. 2(2)(ii) and shall be deemed to have come into force w.e.f. I -4-1964. ["relative" in relation to an individual means the husband, wife, brother or sister or any lineal ascendant or descendant, of that individual] "written down value" means

(i) in the case of assets acquired in the previous year the actual cost to the assessee; and

(ii) in the case of assets acquired before the previous year, the actual cost to the assessee less such sum as may be prescribed.]

66. Explanation 2 shall be and shall be deemed to have been added by Act No. 29 of 1963, s. 3(2), w.e.f. 1-4-1963. [Explanation 2. Nothing contained in this section shall be deemed to entitle a person deriving agricultural income to the deduction of any expenditure laid out or expended for the cultivation, upkeep or maintenance of immature plants (other than tea plants) from which no agricultural income has been derived during the previous year:] 77. Proviso inserted by Act No. 28 of 1964, s. 2(3) and shall be deemed to have come into force w.e.f. 1-4-1964.

[Provided that if in any year expenditure in incurred exclusive on new cultivation of land for growing areca, cardamom, coconut, coffee, orange or rubber plants and also on maintenance of immature plants of areca, cardamom, coconut, coffee, orange or rubber, ten per cent of such expenditure may be deducted from the agricultural income of such person.]

Provided 88. The word "further" inserted by Act No. 28 of 1964, s. 2(3) and shall be deemed to have come into force w.e.f. 1-4-1964. [further] that if in any year any expenditure is incurred for replanting of cardamom, coffee, orange or rubber plants in any plantation or of areca plants in any areca garden, such expenditure not exceeding the amount necessary for replanting two and a half per cent of the acreage of plantation held by the person concerned in the case of coffee or rubber plants;

Provided further that if the replanting expenditure allowance under the preceding proviso is not incurred in one year, the allowance for the year or years may be carried forward for a period of three years in the case of areca, coffee, orange and rubber and one year in the case of cardamom, beyond the year of assessment.]

11. Sub-section (2) inserted by Act No. 29 of 1976, s. 6(ii) and shall be deemed to have come into force w.e.f. 1-4-1975. [(2)(a) Nothing contained in sub-section (1) shall be deemed to entitle a person deriving agricultural income, to the deduction of any expenditure laid out or expended, for the cultivation, upkeep or maintenance of immature plants (other than tea plants) from which no agricultural income has been derived during the previous year.

(b) Notwithstanding anything contained in clause (a),

(i) if in any year expenditure is incurred by a person exclusively on new cultivation of land for growing 22. The word "areca" omitted by Act No. 18 of 1994, s. 7(1)(i), w.e.f. 1-4-1994. [x x x x x] cardamom, 33. The word "coconut" omitted by Act No. 18 of 1994, s. 7(1)(i), w.e.f. 1-4-1994. [x x x x x] coffee, orange or rubber plants and also on maintenance of immature plants of 44. The word "areca" omitted by Act No. 18 of 1994, s. 7(1)(i), w.e.f. 1-4-1994. [x x x x x] cardamom, 55. The word "coconut" omitted by Act No. 18 of 1994, s. 7(1)(i), w.e.f. 1-4-1994. [x x x x x] coffee, orange or rubber, ten per cent of such expenditure may be deducted from the agricultural income of such person;

(ii) if in any year expenditure is incurred by a person for replanting of cardamom, coffee, orange or rubber plants in any plantation, 66. The words "or of areca plants in any areca garden" omitted by Act No. 18 of 1994, s. 7(1)(ii)(a), w.e.f. 1-4-1994. [x x x x x] such expenditure not exceeding the amount necessary for replanting

(a) two and half per cent of the acreage of plantation held by the person concerned in the case of coffee or rubber plants;

(b) one and two-thirds per cent of the acreage of 77. The words "garden or" omitted by Act No. 18 of 1994, s. 7(1)(ii)(b), w.e.f. I -4-1994. [x x x x x] plantation held by the person concerned in the case of 88. The words "areca or" omitted by Act No. 18 of 1994, s. 7(1)(ii)(b), w.e.f. 1-4-1994. [x x x x x] orange plants; and

(c) eight and one-third per cent of the acreage of plantation held by the person concerned in the case of cardamom plants, may be deducted from the agricultural income of such person:

Provided that if the replanting expenditure allowance under item (ii) is not incurred in one year, the allowance for the year or years may be carried forward for a period of three years in the case of 11. The word "areca" omitted by Act No. 18 of 1994, s. 7( 1 )(ii)(c). w.e.f. 1 -4-1994. [x x x x x] coffee, orange and rubber and one year in the case of cardamom, beyond the year of assessment;

22. Item (iii) substituted by Act No. 23 of 1985, s. 2(2) and shall be deemed to have come into force w.e.f. 1-4-1985.

[(iii) a person deriving agricultural income from land on which coffee is grown may, in lieu of the deductions referred to in items (i) and (ii), at his option exercised in writing, deduct from his agricultural income a sum of 33. Substituted for the words "twenty-five rupees for every fifty kilograms of coffee produced and delivered by them to the Coffee Board" by Act No. 18 of 1994, s. 7(l)(iii)(a), w.e.f. 1-4-1994. [nine hundred rupees for every standard ton of coffee produced by him] subject to a maximum of fifteen per cent of the 44. Substituted for the words "average total of agricultural income" by Act No. 18 of 1994, s. 7(l)(iii)(b) and shall be and shall be deemed to have come into force w.e.f. 1-4-1985. [average total agricultural income] during the previous year and three years immediately preceding it towards expenditure for new cultivation, replanting and maintenance of immature plants and if the said expenditure is not incurred in that year the same may be carried forward for a period of five years beyond the year of assessment and any such sum which is spent for purpose other than those specified above or which remains unspent for five years shall be treated as income of the year succeeding the fifth year:

Provided that subject to the conditions and restrictions specified in this clause, where the coffee produced and delivered by him to the Coffee Board is in excess of six hundred kilograms per acre, he may deduct from his agricultural income a sum of thirty rupees for every fifty kilograms of coffee produced and delivered to the Coffee Board:

Provided further that the option once exercised shall be final and the said expenditure allowance shall be calculated on the same basis for purposes of future assessments:]

Provided also that if at any time during the said period of five years, there is a change of ownership of such land either by sale or otherwise, the amount referred to in item (iii) and remaining unspent on the date of such change of ownership shall be treated as income of the transferor for the year in which such change of ownership takes place.

Explanation 11. The Explanation renumbered as Explanation I by Act No. 18 of 1994, s. 7( I Xiii)(c), w.e.f. 1 -4-1994. [I.] For the removal of doubts it is hereby declared that where deduction is allowed under this clause, no further deduction shall be allowed towards expenditure for filing the vacancies of diseased or dead plants in a coffee plantation.]

22. Explanation II inserted by Act No. 18 of 1994, s. 7(l)(iii)(c), w.e.f. 1-4-1994.

[Explanation II. For the purpose of item (iii) of this clause, "standard ton" coffee produced shall be arrived at in the following manner: One standard ton of coffee is equal to

(i) 1,225 Kilograms of uncured Arabica Parchment or

(ii) 1,904 Kilograms of uncured Arabica Cherry or

(iii) 1,194 Kilograms of uncured Robusta Parchment or

(iv) 1,962 Kilograms of uncured Robusta Cherry or

(v) 2,430 Kilograms of uncured Liberia Coffee or

(vi) 2,373 Kilograms of uncured Excelsia Coffee.]

33. Sub-section (3) inserted by Act No. 23 of 1985, s. 2(3) and shall be deemed to have come into force w.e.f. 1-4-1985.

[(3)

(1) In respect of a machinery or plant specified by the State Government by Notification in the Official Gazette which is owned by the assessee and is wholly used for the purpose of deriving agricultural income by him, there shall be allowed a deduction, in respect of the previous year, in which the machinery or plant is first put to use of a sum by way of investment allowance equal to ten per cent of the actual cost to the assessee of the machinery or plant:

Provided that

(a) the machinery or plant is a new machinery or plant acquired by the assessee;

(b) the particulars specified in the notification by the State Government have been duly furnished by the assessee: Provided further that no deduction shall be allowed under this sub-section in respect of

(a) any machinery or plant installed in any office premises or any residential accommodation including any accommodation in the nature of a Guest House;

(b) any office appliances or road transport vehicles other than the tractors.

(2) If the machinery or plant in respect of which investment allowance is made under clause (1) of this sub-section is sold or otherwise transferred by the assessee to any person at any time before the expiry of five years from the end of the previous year in which it was first put to use whether during the continuation of agricultural operation or after the cessation thereof, the investment allowance made in respect of such machinery or plant shall be treated as the income of the assessee for the previous year in which such machinery or plant is sold or otheiwise transferred.]

Section5A Exemption in respect of insurance premia, contribution to provident fund etc.

11. Section 5-A inserted by Act No. 29 of 1976, s. 7 and again substituted by Act No. 23 of 1985, s. 3 and shall be deemed to have come into force w.e.f. 1-4-1985.

(1) From the total agricultural income of the assessee computed under Section 5, there shall be deducted, in accordance with and subject to the provisions of this section, an amount calculated with reference to the aggregate of the sums specified in sub-section (2), at the following rates, namely:

(a)

Where such aggregate does not exceed Rs. 6,000.

The whole of such aggregate.

(b)

 Where such aggregate exceeds Rs. 6,000 but does not exceed Rs. 12,000.

 Rs. 6,000 plus 50 per cent of the amount by which such aggregate exceeds Rs. 6,000.

(c)

Where such aggregate exceeds Rs. 12,000.

Rs. 9,000 plus 40 per cent of the amount by which such aggregate exceeds Rs. 12,000.

(2) The sums referred to in sub-section (1) shall be the following, namely:

(a) where the assessee is an individual, any sum paid in the previous year by the assessee out of his agricultural income chargeable to tax,

(i) to effect or to keep in force an insurance on the life of the assessee or on the life of the wife or husband or any child of the assessee; or

(ii) to effect or to keep in force a contract for a deferred annuity on the life of the assessee or on the life of the wife or husband or any child of the assessee; or

(iii) as a contribution to any provident fund to which the Provident Fund Act, 1925 (Central Act 19 of 1925) applies; or

(iv) as a contribution for particpation in the Unit Linked Insurance Plan, 1971 made under Section 19(l)(cc) of the Unit Trust of India Act, 1963 (Cenral Act 52 of 1963); or

(v) any sum deposited in a ten year account of fifteen year account under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959, as amended from time to time; or

11. Sub-clause (vi) of clause (a) substituted by Act No. 6 of 1990, s. 2, w.e.f. 1-4-1990. [(vi) as a subscription to the National Savings Certificate (VI Issue), the National Savings Certificate (VII Issue) and the National Savings Certificate (VIII Issue);]

(b) where the assessee is a Hindu undivided family any sums paid in the previous year by the assessee out of its income chargeable to tax,

(i) to effect or to keep in force an insurance on the life of any member of the family; or

(ii) as a contribution to any pvident fund referred to in sub-clause (iii) of the clause (a) where such contribution is to an account standing in the name of any member of the family; or

(iii) any sums deposited in a ten year account or a fifteen year account under the Post Office Savings Bank (Cumulative Time Deposit) Rules, 1959 as amended from time to time where such sums are deposited in an account standing in the name of any member of the family; or

22. Sub-clause (iv) of clause (b) substituted by Act No. 4 of 1999 and shall be deemed to have been substituted w.e.f. 8-5-1989. [(iv) as a subscription to the National Savings Certificate VI issue, VII issue and VIII issue:] 33. Proviso substituted by Act No. 10 of 1987, s. 3, w.e.f. 1-4-1987.

[Provided that the amount deducted under this sub-section shall not exceed forty thousand rupees:]

Provided further that the provisions of this sub-section shall apply only to so much of any premium or other payments made on a policy other than a contract for a deferred annuity as it is not in excess of ten per cent of the actual sum assured.

Explanation. In calculating any such actual sum no account shall be taken,

(i) of the value of any premiums agreed to be returned; or

(ii) of any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.

(3) Notwithstanding anything in sub-sections (1) and (2), no deduction under this section shall be allowed unless the claim is supported by proof to the effect that the assessee is not liable to tax under the Income-tax Act, 1961 (Central Act 43 of 1961), or that similar deduction under the provisions of the said Act has not been claimed or allowed in respect of the sums on account of which the deduction is claimed.]

Section5B .

11. Section 5-B omitted by Act No 7 of 1997, w.e.t". 1-4-1997. [omited]

Section6 Assessment of income derived from lands partly within the State and partly without

Where agricultural income is derived from land situated partly within the State and partly without the State, agricultural income-tax shall be levied under this Act

(i) where the portion of such income attributable to the lands situated within the State can be determined from the accounts maintained by the assessee, on the portion so determined.

(ii) where the portion of the income so attributable cannot be determined by the method specified in clause (i) on such portion as may be determined in the prescribed manner.

Section7 Method of accounting

Agricultural income shall be computed for the purpose of Sections 5 and 6 in accordance with the method of accounting regularly employed by the assessee:

Provided that, if no method of accounting has been regularly employed by the assessee, or if the method employed is such that, in the opinion of the 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.t". 4-2-1993. [Assistant Commissioner of Agricultural Income-tax], then the agricultural income cannot properly be deduced therefrom, then the computation shall be made upon such basis and in such manner as he may determine:

Provided further that in the case of coffee crop of an assessee, the agricultural income therefrom may be computed on the basis of valuation on points declared by the Indian Coffee Board in respect of such crop.

Section7A 1Accounts to be maintained by certain assessees

Every assessee other than an assessee permitted to pay amount by way of composition under Section 66, shall keep and maintain true and complete accounts and such other records, registers and documents relating to his agricultural activities including activities incidental and ancillary thereto as may be prescribed.]

Section8 Assessment of agricultural income in regard to tea

In the case of cultivation and manufacture to tea, the agricultural income for the purpose of this Act shall be deemed to be that portion of the income from cultivation, manufacture and sale computed under the 22. Substituted for the words, figures and brackets "Indian Income-tax Act, 1922 (Central Act XI of 1922)" by Act No. 29 of 1976, s. 8 and shall be deemed to have come into force w.e.f. 1-4-1975. [Income-tax Act, 1961 (Central Act 43 of 1961)] which is excluded from taxation under that Act as being agricultural income, after deducting from the said portion any allowance authorised by this Act in so far as the same has not been allowed in the computation of the income for the purposes of the 33. Substituted for the words, figures and brackets "Indian Income-tax Act, 1922 (Central Act XI of 1922)" by Act No. 29 of 1976, s. 8 and shall be deemed to have come into force w.e.f. 1-4-1975. [Income-tax Act, 1961 (Central Act 43 of 1961).]

Section9 Assessment of a Hindu Undivided Family

(1) The total agricultural income of a Hindu Undivided Family shall be treated as the income of one individual and assessed as such.

(2) In the case of a Marumakkattayam tarwad or Aliyasantana family, the total agricultural income of the tarwad or family shall be assessed on the karnavan of the tarwad or the manager of the family and treated as the income of one individual for the purpose of levy of agricultural income-tax:

Provided that in cases where properties have been set apart for each lavazhi in the tarwad or branch of the family for maintenance under any family arrangement, the kamavan, manager or other person in management of the tavazhi or branch shall be assessed separately.

(3) In the case of a family governed by the Coorg Customary Law, or a family owning jama properties, where a division for maintenance has taken place tax shall be levied on the income of each share of the family.

Section10 Liability of Court of Wards, Administrator-General, etc

(1)

(a) In the case of agricultural income taxable under this Act, which the Court of Wards, Administrator-General or Official Trustee or any receiver, administrator, executor, trustee, guardian or manager appointed by or under any law or by an order of Court or by written agreement, is entitled to receive on behalf of any person, the tax shall be levied upon and recoverable from the Court of Wards, Administrator- General, official trustee, or from such receiver, administrator, executor, trustee, guardian or manager, as the case may be, in the like manner and to the same amount as it would be leviable upon and recoverable from the person on whose behalf such agricultural income is receivable and all the provisions of this Act shall apply accordingly.

(b) Where the agricultural income received on behalf of any person by the Court of Wards, Administrator-General, official trustee, receiver, administrator, executor, trustee, guardian or manager referred to in clause (a) is part only of the total agricultural income of such person, the agricultural income-tax payable under this Act shall be assessed on the total agricultural income of such person and the amount of tax as so assessed shall be levied upon and recoverable from the Court of Wards, Administrator-General, official trustee, receiver, administrator, executor, trustee, guardian or manger, as the case may be, and from such person rateably according to the portion of the total agricultural income of such person received by the Court of Wards, Administrator-General, official trustee, receiver, administrator, executor, trustee, guardian or manager, as the case may be, and the portion received by such person.

(c) Nothing contained in this sub-section shall prevent either the direct assessment of the person on whose behalf the agricultural income is receivable or the recovery from such person of the tax payable in respect of such income.

(2)(a) Save as provided in sub-section (1), if a person holds land from which agricultural income is derived partly for his own benefit and partly for the benefit of others or wholly for the benefit of others, agricultural income-tax shall be assessed on the total agricultural income derived from such land at the rate which would be applicable if such person had held the land exclusively for his own benefit.

(b) Any person holding such land shall be entitled, before paying to any beneficiary the amount of agricultural income which such beneficiary is entitled to receive, to deduct the amount of agricultural income-tax at the rate at which such income is or will be assessed under clause (a).

Section11 Income from settlement, disposition, etc

(1) All agricultural income arising to any person by virtue of a settlement or disposition, whether revocable or not, and whether effected before or after the commencement of this Act, from assets remaining out of the property of the Settlor or disponer shall be deemed to be the agricultural income of the settlor or disponer, and all agricultural income arising to any person by virtue of a revocable transfer of assets shall be deemed to be the agricultural income of the transferor:

Provided that, for the purposes of this sub-section, a settlement, disposition or transfer shall be deemed to be revocable if it contains any provisions of the re-transfer directly or indirectly of the agricultural income or assets to the settlor, disponer or transferor or in any way gives the settlor, disponer or transferor a right to re-assume power directly or indirectly over the agricultural income or assets:

Provided further that the expression "settlement or disposition" shall, for the purposes of this sub-section, include any disposition, trust, covenant, agreement or arrangement and the expression "settlor or disponer" in relation to a settlement or disposition shall include any person by whom the settlement or disposition was made:

Provided also that this sub-section shall not apply to any agricultural income arising to any person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the life time of the person and from which agricultural income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed on the said agricultural income as and when the power to revoke arises to him.

11. Sub-section (2) substituted by Act No. 14 of 1983, s. 7 and shall be deemed to have come into force w.e.f. 1-12-1982.

[(2) In computing the total agricultural income of any individual, there shall be included all such agricultural income as arises directly or indirectly,

(a) to the spouse of such individual,

(i) from the membership of the spouse in a firm in which such individual is a partner;

(ii) from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideration or in connection with an agreement to live apart;

(b) to a minor child (not being a married daughter) of such individual,

(i) from the admission of the minor to the benefits of partnership in a firm in which such individual is a partner;

(ii) from assets transferred directly or indirectly to the minor child by such individual otherwise than for adequate consideration; and

(c) to any person or association of persons from assets transferred directly or indirectly otherwise than for adequate consideration to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefits of his or her spouse or minor child (not being a married daughter) or both.

22. Explanation renumbered as Explanation (1) by Act No. 38 of 1986, s. 2, w.e.f. 10-10-1986. [Explanation (1)]. For the purpose of clause (a), the individual, in computing whose total income the income referred to in that clause is to be included, shall be the husband or wife whose total income (excluding the income referred to in that clause) is greater, and for the purpose of clause (b), the income of the minor child of the partnership shall be included in the income of that parent whose total income (excluding the income referred to in that clause) is greater, and where any such income is once included in the total income of the either spouse or parent any such income arising in any succeeding year shall not e included in the total income of the other spouse or parent unless the 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assibstant Commissioner of Agricultural 11. Substituted for the expression "Assistant Agricultural Income-tax Officer" by Act No. 5 of 1993, s.5, w.e.f. 4-2-1993. [Agricultural Income-tax Officer], as the case may be, is satisfied, after giving that spouse or parent an opportunity of being heard, that it is necessary so to do.]

22. Explanations (2), (3) and (4) with proviso inserted by Act No. 38 of 1986, s. 2, w.e.f. 10-10-1986. [Explanation (2). For the purposes of clause (a), where the spouse of an individual is a beneficiary under a trust, the income arising to the trustee from the membership of the trustee in a firm in which such individual is a partner shall, to the extent such income is for the immediate or deferred benefit of the spouse of such individual, be deemed to be income arising indirectly to the spouse of such individual from the membership of the spouse in a firm in which such individual is a partner.

Explanation (3). For the purposes of clause (b), where the minor child of an individual is a beneficiary under a trust, the income arising to the trustee from the membership of the trustee in a firm in which such individual is a partner shall, to the extent such income is for the immediate or deferred benefit of the minor child, be deemed to be income arising indirectly to the minor child from the admission of the minor to the benefits of partnership in a firm in which such individual is a partner.

Explanation (4). Where, in the case of an individual being a member of a Hindu undivided family, any property having been the separate property of the individual has been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or throwing it into the common stock of the family or been transferred by the individual, directly or indirectly to the family otherwise than for adequate consideration (the property so converted or transferred being hereunder referred to as the converted property) then, notwithstanding anything contained in any other provision of this Act or in any other law for the time being in force, for the purpose of computation of the total income of the individual under this Act,

(a) the individual shall be deemed to have transferred the converted property, through the family, to the members of the family for being held by them jointly;

(b) the income derived from the converted property or any part thereof shall be deemed to arise to the individual and not to the family;

(c) where the converted property has been the subject-matter of a partition (whether partial or total) amongst the members of the family, the income derived from such converted property as is received by the spouse or minor child on partition shall be deemed to arise to the spouse or minor child from assets transferred indirectly by the individual to the spouse or minor

Provided that the income referred to in clause (b) or clause (c) shall, on being included in the total income of the individual, be excluded from the total income of the family, or, as the case may be, the spouse or minor child of the individual.]

Section12 Exemption from assessment of income-tax

Agricultural income-tax shall not be payable on that part of the total agricultural income of a person which is

(a) any sum which he receives out of the agricultural income of a Hindu undivided family, Marumakkattayam tarwad or aliyasanthana family if he receives such sum as a member of the family or tarwad and tax under this Act has been levied on the agricultural income;

(b) any dividend which he receives as a shareholder out of the agricultural income of a company which has certified that it has paid or will pay the tax under this Act in respect of the agricultural income of such company;

11. Explanation substituted by Act No. 38 of 1986, s. 3(2), w.e.f. 10-10-1986.

[(c) any sum which he receives as his share out of the agricultural income of a firm or association of persons, if the tax under this Act, has been levied on the agricultural income of such firm or association] [x x x x x;]

(d) any sum which he receives out of the agricultural income in respect of which tax under this Act has already been levied under Section 10;

[(e) x x x x x;]

(f) any sum derived from land held under a trust or other legal obligation wholly or partly for public purposes of a charitable or religious nature and actually spent for the said purposes;

[ [(g) any sums paid by such person in the previous years as donations to,

(i) Karnataka Chief Minister's Relief Fund;

(ii) Karnataka Chief Minister's Drought Relief Fund;

(iii) any other fund or institution which, is established for charitable purposes and subject to such restrictions and conditions as may be prescribed is approved by the State Government for the purpose of this section;

(iv) the Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning; and

(v) the Government or any local authority, or institutions as may be approved in this behalf by the State Government to be utilised for the purpose of promoting family planning:] Provided that the institution or fund fulfils the following conditions, namely:

(i) the institution or fund is either constituted as a public charitable trust or is registered under the Karnataka Societies Registration Act, 1960 (Karnataka Act 21 of 1960), or under Section 25 of the Companies Act, 1956 (Central Act 1 of 1956), or is a University established by law, or is any other educational institution recognised by the State Government or by University established by law or affiliated to any University established by law or is an institution financed wholly or in part by the State Government or a local authority, whether owned by the State Government or a local authority;

(ii) the institution or fund is not expressed to be for the benefit of any particular religious community or caste;

(iii) each such sum is not less than two hundred and fifty rupees;

(iv) any other restrictions or conditions as may be prescribed.]

11. Section 12-A inserted by Act No. 14 of 1983, s. 9 and shall be deemed to have come into force w.e.f. 1-12-1982. [Explanation. For the purposes of this section,

(1) "charitable purpose" includes relief to the poor, medical relief and advancement of education or any other object of general public utility not involving the carrying on of any activity for profit so, however, it does not include any purpose the whole or the substantially the whole of which is of a religious nature;

(2) an institution or fund established for the benefit of Scheduled Castes and Scheduled Tribes shall not be deemed to be an institution or fund expressed to be for the benefit of a religious community or caste, within the meaning of clause (ii) of the proviso.]

Section12A Power of State Government to reduce, exempt or remit tax

11. Section 13 omitted by Act No. 29 of 1976, s. 10 and shall be deemed to have come into force w.e.f.1-4-1975. .

(1) The State Government may, if satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette, exempt, remit or reduce, whether prospectively or retrospectively, the tax payable under this Act or the lumpsum referred to in 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [sub-section (1) of Section 66], in such areas, for such crops, during such period and subject to such conditions as may be specified in the notification.

(2) Every notification under sub-section (1) shall be laid, as soon as may be, after it is issued, before each House of the State Legislature while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions and if, before the expiry of the session in which it is so laid or the session immediately following both Houses agree in making any modification in the notification, or both Houses agree that the notification should not be made, it shall, thereafter, have effect only in such modified form or be of no effect, as the case may

Section13 1Exemption of portion of earned agricultural income

x x x x x.]

Section14 Non-residents

(1) In the case of any person residing outside the State, his total agricultural income shall be chargeable to agricultural income-tax either in his name or in the name of his agent and in the latter case, such agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such tax.

(2) Any person employed by or on behalf of a person residing out of the State, or through whom the non-resident person is in receipt of any agricultural income, upon whom the 22. Substituted for the word "further" by Act No. 14 of 1983, s. 10 and shall be deemed to have come into force w.e.f. 1-12-1982. [Assistant Commissioner of Agricultural Income-tax] has caused a notice to be served of his intention of treating him as the agent of the non-resident person shall, for all the purposes of this Act, be deemed to be such agent:

Provided that no person shall be deemed to be the agent of a non-resident person, unless he has had an opportunity of being heard by the 33. Clause (aa) inserted by Act No. 14 of 1983, s. 11 and shall be deemed to have come into force w.e.f.1-12-1982. [Assistant Commissioner of Agricultural Income-tax] as to his liability.

(3) Where a notice under this Act has to be served on a non-resident person, it shall be served in the prescribed manner.

Section15 Carrying forward of loss

Where any person sustains a loss in agricultural income in any year, the loss shall be carried forward to the following year and set off against the agricultural income for that year and if it cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following year and so on, but no loss shall be carried forward for more than six years 44. Substituted for the expression "Joint Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [subject to the condition that the return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed is filed well within the period specified in sub-section (1) of Section 18 or within the such extended time granted by the Assistant Commissioner of Agricultural Income Tax or the Deputy Commissioner of Agricultural Income Tax as the case may be is filed and nothing contained in sub-section (3) of Section 18 shall apply in this regard:]:

Provided that, in the case of loss sustained before the commencement of this Act, this section shall apply only to such loss as was sustained in the previous year immediately before such commencement:

11. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Provided further that no loss, which has not been determined in pursuance of a return filed under Section 18 shall be carried forward and set off under this section:]

Provided 22. Clause (bb) inserted by Act No. 29 of 1963, s. 5(1), w.e.f. 1-4-1964. [also] that where depreciation allowance is also to be carried forward under proviso (2) to clause (e) of Section 5, effect shall first be given to the provisions of this section.

Section16 Certificate in respect of payment of tax by companies

The principal officer of every company shall, at the time of the distribution of dividends, furnish to every person receiving a dividend a certificate to the effect that the company has paid or will pay agricultural income-tax on the profits which are being distributed, and specifying such other particulars as may be prescribed.

CHAPTER 3 Income-tax Authorities

Section17 Income-tax Authorities

(1) There shall be the following classes of income-tax authorities for the purposes of this Act, namely:

(a) Commissioner of Agricultural Income-tax; 33. Substituted for the expression "Assistant Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993.

[(aa) 44. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Additional Commissioner] of Agricultural Income-tax;]

(b) 11. Sub-section (2-B) inserted by Act No. 29 of 1976, s. 11(3) and shall be deemed to have come into force w.e.f. 1-4-1975. [Joint Commissioner] of Agricultural Income-tax; 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993.

[(bb) 33. Substituted for the expression "Assistant Agricultural Income-tax Officer" by Act No. 5 of 1993, s.5, w.e.f. 4-2-1993. [Deputy Commissioner] of Agricultural Income-tax;]

(c) 44. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax;]

55. Substituted for the expression "Assistant Agricultural Income-tax Officer" by Act No. 5 of 1993, s.5, w.e.f. 4-2-1993. [(d) 66. Substituted for the words "the Commissioner" by Act No. 29 of 1963, s. 5(3), w.e.f. 1-4-1964. [Agricultural Income-tax Officers].]

(2) The authorities specified in sub-section (1) shall be appointed by the State Government ana shall exercise such powers ana perform such functions and duties under this Act in respect of such classes of persons or classes of income and in such areas, as the State Government may, by notification in the Official Gazette, direct. [Provided that the [Assistant Commissioner of Agricultural Income-tax] and the [Agricultural Income-tax Officers] shall, subject to the directions issued by the State Government, exercise such powers and perform such functions and duties under the Act in respect of such classes of persons or income and in such areas as the Commissioner may, direct.]

[(2-A) (a) The Commissioner may, by general or special order in writing, direct that the powers conferred on the [Assistant Commissioner of Agricultural Income-tax] by or under this Act, shall, in respect of any specified case or classes of cases or of any specified persons or classes of persons, be exercised by the [Deputy Commissioner] of Agricultural Income-tax. (b) Where an order under clause (a) is issued, then for the purposes of any case or person in respect of which any such order applies, reference in this Act or in any rule made thereunder to the [Assistant Commissioner of Agricultural Income-tax] shall be deemed to be reference to the [Deputy Commissioner] of Agricultural Income-tax.]

11. Section 17-A inserted by Act No. 38 of 1986, s. 4, w.e.f. 10-10-1986.

[(2-B)

(a) The Commissioner may, by general or special order in writing, direct that the powers conferred on the 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] by or under this Act, shall, in respect of any specified case or classes of cases or of any specified persons or classes or persons, be exercised by the 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Agricultural Income-tax Officer;]

(b) Where an order under clause (a) is issued, then for the purpose of any case or person in respect of which or whom any such order applies, reference in this Act or in any rule made thereunder to the 44. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] shall be deemed to be reference to the 55. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Agricultural Income-tax Officer].]

(3) The State Government may, by notification in the Official Gazette, empower any officers other than the authorities specified in sub-section (1) to exercise such powers and perform such functions and duties under this Act in respect of such classes of persons or classes of income and in such areas, as may be specified in the notification.

(4) The authorities specified in sub-section (1) and the officers specified in sub-section (3) shall be deemed to be public servants within the meaning of Section 21 of the Indian Penal Code, 1860 (Central) Act XLV of 1860).

(5) All Officers and persons employed in the execution of this Act shall observe and follow the orders, instructions and directions of 66. Inserted by Act No. 6 of 1995, s. 3(3), w.e.f. 1-4-1995. [the State Government and the Commissioner:]

Provided that no such order, direction or instruction shall be given so as to interfere with the discretion of any appellate authority in the exercise of its appellate functions.

Section17A Powers of Commissioner to transfer cases

11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. . The Commissioner may, by an order in writing, transfer any case or classes of cases, or cases or classes of cases relating to any area or any specified persons or classes of persons, from

(a) an 22. Substituted for the words "serve in that year" by Act No. 29 of 1963, s. 6, w.e.f. 19-10-1963. [Assistant Commissioner of Agricultural Income-tax] to any other 33. Sub-section (2-A) inserted by Act No. 29 of 1976, s. 12(1) and shall be deemed to have come into force w.e.f. 1-4-1975. [Assistant Commissioner of Agricultural Income-tax], or

(b) a 44. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Joint Commissioner] to any other 55. Substituted for the words "ten per cent" by Act No. 18 of 1994, s. 7(3Xi), w.e.f. 1-4-1994. [Joint Commissioner.]]

CHAPTER 4 Return of Income, Assessment, etc.

Section18 Return of income

(1) Every person whose total agricultural income during the previous year exceeded the maximum amount which is not chargeable to agricultural income-tax 66. Proviso substituted by Act No. 10 of 1987, s. 4(1), w.e.f. 1-4-1987. [or every person who holds land under plantation crop the total extent of which is not less than 77. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f4-2-1993. [fifteen acres]] shall furnish to the 88. Second proviso inserted by Act No. 38 of 1986, s. 5, w.e.f. 10-10-1986. [Assistant Commissioner of Agricultural Income-tax] so as to reach him before the 99. Sub-section (2-B) inserted by Act No. 10 of 1987, s. 4(2), W.e.f. 1-4-1987. [expiry of four months from the end of the previous year] a return in the prescribed form and verified in the prescribed manner, setting forth his total agricultural income during the previous year.

[Provided that the return of agricultural income for the previous year ending on or after the 31st March, 1982, but before the date of commencement of the Karnataka Agricultural Income-tax (Amendment) Act, 1983 shall be filed within four months from the date of commencement of the said Act.]

(2) In the case of any person whose total agricultural income is, in the opinion of the 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax], of such amount as to render such person liable to payment of agricultural income-tax for any financial year, he may 22. Sub-section (3-A) inserted by Act No. 18 of 1994, s. 7(3Xii), w.e.f. 1-4-1994. [before the end of the relevant financial year, serve] a notice in the prescribed form requiring such person to furnish within such period not being less than thirty days as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting forth (along with such other particulars as may be provided for in the notice) his total agricultural income during the previous year.

33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993.

[(2-A)

(a) Before any person submits any return under sub-section (1) or sub-section (2), he shall, in the prescribed manner, pay in advance the full amount of tax payable by him on the basis of such return and shall furnish along with the return satisfactory proof of the payment of such tax. After the assessment is made under Section 19 the amount of tax so paid shall be deemed to have been paid towards the tax so assessed and excess amount, if any, paid shall be refunded to such person.

(b) It after the assessment under Section 19 it is found that the tax paid under clause (a) was less than the tax payable by more than twenty-five per cent, the 44. Inserted by Act No. 29 of 1976, s. 12(2) and shall be deemed to have come into force w.e. f. 1 -4-1975. [Assistant Commissioner of Agricultural Income-tax] may direct such person to pay in addition to the tax, by way of penalty, a sum calculated at [twenty-four per cent per annum] of the amount of tax so paid short:

[Provided that in ±he case of a person whose total agricultural income as determined by the [Assistant Commissioner of Agricultural Income-tax] is less than twenty thousand rupees, the penalty imposed shall not exceed one hundred rupees:]] [Provided further that no penalty under this sub-section shall be imposed unless the assessee affected has had a reasonable opportunity of showing cause against such imposition.]

[(2-B) If any person who has not been served with a notice under sub-section (2) has sustained a loss in any previous year and claims that 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] may, in his discretion a return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed, and all the provisions of the Act, shall apply as if it were a return under sub-section (1).]

(3) If any person has not furnished a return within the time allowed by or under sub-section (1) or sub-section (2) or, having furnished a return under any of those sub-sections discovers any omission or wrong statement therein, he may furnish a return or a revised return, as the case may be, at any time before the assessment is made.

22. Substituted for the expression "Agricultural Income- tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [(3-A) Where a return under sub-section (1) or sub-section (2) or sub-section (3) for any assessment year is furnished after the date specified under sub-section (1) or is not furnished then, in cases where the Agricultural Income-tax Officer has not extended the date of furnishing the return under Section 61, the assessee shall be liable to pay in addition to the tax payable, interest at the rate of twenty-four per cent per annum reckoned from the day immediately following the date specified in sub-section (1) to the date of the furnishing the return or where no return has been furnished the date of completion of the assessment, on the amount of the tax payable on the total agricultural income as determined on regular assessment as reduced by the tax paid, if any.]

(4) The 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] may serve on any person who has made a return under sub-section (1) or upon whom a notice has been served under sub-section (2) a notice requiring him, on a date to be therein specified, to produce, or cause to be produced, such accounts or documents as such officer may require 44. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [for the purposes of this Act:]

Provided that such officer shall not require the production of any accounts relating to a period more than three years prior to the previous year.

Section19 Assessment of income

(1) If the 11. Sections 19-A, 19-B, 19-C and 19-D inserted by Act No. 10 of 1987, w.e.f. 1-4-1987. [Assistant Commissioner of Agricultural Income-tax] is satisfied that a return made under Section 18 is correct and complete, he shall, by order in writing, assess the total agricultural income of the assessee and determine the sum payable by him on the basis of such return.

(2) If the 22. Sections 19-A, 19-B and 19-C omitted by Act No. 18 of 1994, s. 7(5), w.e.f. 1-4-1994. [Assistant Commissioner of Agricultural Income-tax] is not satisfied without requiring the presence of the person who made the return or the production of evidence, that the return is correct and complete, he shall serve on the person who made the return a notice requiring him on the date specified therein, either to attend at the office of the 33. Substituted for the words "two years" by Act No. 18 of 1999 [Assistant Commissioner of Agricultural Income-tax] or to produce or to cause to be produced, any evidence on which such person may rely in support of the return.

(3) On the day specified in the notice under sub-section (2) or as soon afterwards as may be, the 44. Proviso inserted by Act No. 7 of 1997, w.e.f. 1-4-1997 [Assistant Commissioner of Agricultural determine the sum payable by the assessee on the basis of such assessmentIncome-tax], after considering such evidence as such person may produce and such other evidence as that officer may require on specified points, shall, by an order in writing assess the total agricultural income of the assessee and determine the sum payable by him on the basis of such assessment.

(4) If any person fails to make a return under sub-section (1) or sub-section (2) of Section 18, as the case may be, or fails to comply with all the terms of a notice issued under sub-section (4) of that section or under sub-section (2) of this section, the [Assistant Commissioner of Agricultural Income-tax] shall make the assessment to the best of his judgment and 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993.

[x x x x x:]

[Proviso x x x x x.]

[Provided further that before making an assessment to the best of his judgment, the [Assistant Commissioner of Agricultural Income-tax] shall give to the assessee a reasonable opportunity of being heard.]

[(5) x x x x x.

(6) x x x x x.]

(7) When in the course of the assessment of the total agricultural income of the assessee it is found that a loss has been sustained which he is entitled to have set off under Section 15, the [Assistant Commissioner of Agricultural Income-tax] shall notify to the assessee by order in writing the amount of the loss as computed by him.

Section19A 12Assessment of registered firm

x x x x x.

Section19B Assessment of unregistered firm

x x x x x.

Section19C Method of computing a partner's share in the income of the firm

x x x x x.]

Section19D Time limit for completion of assessments and re-assessment

(1) No assessment under Sectjpns 19, 19-A, 19-B, and 19-C for any year shall be made after a period of [three years] from the date on which the return under Section 18, for that year is submitted by an assessee. [Provided that the assessment proceedings relating to any year ending before the commencement of the Kamataka Taxation Laws (Amendment) Act, 1997, in respect of which a return under sub-section (1) has been submitted before such commencement, shall be, completed within a period of two years from such commencement.]

(2) In computing the period of limitation for assessment under Sections 19, 19-A, 19-B and 19-C

(a) the time during which the proceedings for assessment in question have been deferred on account of any stay order granted by any Court or any other authority shall be excluded;

(b) the time during which the assessment has been deferred in any case or class of cases by the Commissioner for reasons to be recorded in writing shall be excluded:

Provided that nothing contained in this section limiting the time within which assessment may be made, shall apply to an assessment made on the assessee or any person in consequence of, or to give effect to any finding,

Provided further that nothing in this section shall apply to any assessment proceeding which is pending prior to the commencement of the Karnataka Agricultural Income-tax (Amendment) Act, 1987.

(3) Where an assessment under this section is not concluded within the time specified in sub-section (1), the total and taxable income declared by an assessee in the annual return shall be deemed to have been assessed for that year on the basis of the said return 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f,4-2-1993. [and the provisions of this Act relating to agricultural income escaping assessment, payment, recovery, appeal and revision shall mutatis mutandis apply to such deemed assessment] and the tax so assessed shall be payable by the assessee.]

Section20 Powers to make provisional assessment in advance of regular assessment

(1) The [Assistant Commissioner of Agricultural Income-tax] may, at any time after the receipt of a return made under Section 18, proceed to make in a summary manner, a provisional assessment of the tax payable by the assessee, on the basis of his return and the accounts and documents, if any, accompanying it, after giving due effect to (i) the allowance referred to in paragraph (2) of the proviso to clause (c) of Section 5, and (ii) any loss carried forward under Section 15.

(2) A partner of a firm may be provisionally assessed under sub-section (1) in respect of his share in the firm's income, profits and gains, if its return has been received, although the return of the partner himself may not have been received.

(3) There shall be no right of appeal against a provisional assessment made under sub-section (1).

(4) After a regular assessment has been made under Section 19, any amount paid or deemed to have been paid towards a provisional assessment made under sub-section (1), shall be deemed to have been paid towards the regular assessment, and where the amount paid or deemed to have been paid towards the provisional assessment, exceeds the amount payable under the regular assessment, the excess shall be refunded to the assessee.

(5) Nothing done or suffered by reason or in consequence of any provisional assessment made under this section shall prejudice the determination on the merits of any issue which may arise in the course of the regular assessment under Section 19.

Section21 Cancellation of assessment in certain cases

Where an assessee within one month from the service of a notice of demand issued as hereinafter provided satisfies the 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f,4-2-1993. [Assistant Commissioner of Agricultural Income-tax] that he was prevented by sufficient cause from making the return required by Section 18 or that he did not receive the notice issued under sub-section (2) or sub-section (4) of that Section or sub-section (2) of Section 19 or that he had not a reasonable opportunity to comply, or prevented by sufficient cause from complying with the terms of any such notice, the 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.c.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] shall cancel the assessment and proceed to make a fresh assessment in accordance with the provisions of Section 19.

Section22 Penalty for concealment of income

(1) If the 11. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] or the 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Joint Commissioner] or the Commissioner is satisfied that any person.

(a) has without reasonable cause failed to furnish the return of his total agricultural income which he was required to furnish under sub-section (2) of Section 18; or

(b) has without reasonable cause failed to furnish such return within the time allowed and in the manner required by sub-section (1) of Section 18 or by a notice served under sub-section (2) of that Section; or

(c) has, without reasonable cause, failed to comply with a notice issued under sub-section (4) of Section 18 or under sub-section (2) of Section 19; or

(d) has concealed the particulars of his agricultural income or has deliberately furnished inaccurate particulars of such income;

Provided that:

(a) no penalty shall be imposed under this sub-section upon a person who has failed to furnish a return under sub-section (1) of Section 18, if he proves that he has no income liable to tax;

(b) where a person has failed to comply with a notice under sub-section (2) or sub-section (4) of Section 18 or under sub-section (2) of Section 19 and proves that he has no income liable to tax, the penalty imposable under this sub-section shall not exceed ten rupees;

(c) no penalty shall be imposed under this sub-section upon any person assessable as the agent of any person not resident in the State of Karnataka for failure to furnish the return required under Section 18 unless a notice under sub-section (2) thereof or under Section 35 has been served on him.

(2) No order under sub-section (1) shall be made unless the assessee has been heard or has been given a reasonable opportunity of being heard.

(3) No prosecution for an offence against this Act shall be instituted in respect of the same facts on which a penalty has been imposed under sub-section (1).

(4) If the Commissioner or 11. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Joint Commissioner] makes an order under sub-section (1) he shall forthwith send a copy of the same to the 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] concerned.

Section23 Power to assess individual members of certain associations

(1) Where the 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] is satisfied that any association of individuals other than a Hindu undivided family, and Aliyasanthana family or branch, Marumakkattayam tarwad or tavazhi or a company is under the control of one member thereof, and that such association has been formed or is being used for the purpose of evading or reducing the liability to agricultural income-tax of any member thereof, he may, with the previous approval of the 44. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f4-2-1993. [Joint Commissioner] of Agricultural Income-tax, pass an order that the sum payable as agricultural income-tax, by the association shall not be determined, and thereupon the share of each member in the agricultural income of the association shall be included in his total agricultural income for the purpose of his assessment thereon.

Explanation. (1) A member of an association who owns the whole or the major portion of the capital of the association shall not by reason only of that fact be deemed to control the firm or association.

(2) The 11. Section 26 substituted by Act No. 10 of 1987, s. 7, w.e.f. 1-4-1987. [Joint Commissioner] of Agricultural Income-tax shall not give his approval to any order proposed to be passed by the 22. Inserted by Act No. 7 of 1997, w.e.f. 1-4-1997 [Assistant Commissioner of Agricultural Income-tax], under this section until he has given the firm or association concerned an opportunity of being heard.

(3) Where any member of an association of individuals makes default in the payment of tax on his share of income which has been included in his total agricultural income under the provisions of sub-section (1), such tax may be recovered from the association.

(4) Where the agricultural income-tax is recoverable from an association under this section, a notice of demand shall be served upon it in the prescribed showing the sum so payable, and such association shall be deemed to be the assessee in respect of such sum, for the purposes of Chapter V.

Section24 Tax of deceased person payable by representative

(1) Where a person dies, his executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased person, to the extent to which the estate is capable of meeting the charge of the agricultural income-tax assessed as payable by such person or any agricultural income-tax which would have been payable by him under this Act if he had not died.

(2) Where a person dies before the 1st June in any year or before he is served with a notice under sub-section (2) of Section 18 or under Section 36, as the case may be, his executor, administrator or other legal representative shall, on the serving of the notice under sub-section (2) of Section 18 or under Section 36, as the case may be, comply therewith, and the 33. Sub-sections (1) and (2) substituted by Act No. 18 of 1997 and shall be deemed to have been substituted w.e.f. 1-4-1975 [Assistant Commissioner of Agricultural Income-tax] may proceed to assess the total agricultural income of the deceased person as if such executor, administrator or other legal representative were the assessee.

(3) Where a person dies without having furnished a return which he has been required to furnish under Section 18, or having furnished a return which the 44. Substituted for the words "Agricultural Income-tax Officer" by Act No. 18 of 1997 and shall be deemed to have been substituted w.e.f. 4-2-1993 [Assistant Commissioner of Agricultural Income-tax] has reason to believe to be incorrect or incomplete such Officer may make an assessment of the total agricultural income of such person and determine the agricultural income-tax payable by him on the basis of such assessment and for this purpose may, by the issue of the appropriate notice which would have had to be served upon the deceased person had he survived, require from the

Section25 Effect of transfer of land

Where a person in receipt of agricultural income for any previous year from any land in the State is found to have transferred his interest in such land to any other person, the transferor and the transferee shall, each, be assessed in respect of his actual share, if any, of the agricultural income for the previous year:

Provided that where the transferor cannot be found, the assessment of such agricultural income of the previous year in which the transfer took place up to the date of the transfer and for the year preceding that year shall be made on the transferee in the like manner an to the like extent as it would have been made on the transferor or where the tax in respect of the assessment made for any or all of such years on the transferor cannot be recovered from him, it shall be payable by and recoverable from the transferee, and the transferee shall be entitled to recover from the transferor the amount so paid by him.

Section26 Assessment incase of discontinued company, firm or association

22. Sub-sections (4) to (7) substituted for sub-sections (4) and (5) including the proviso by Act No. 18 of 1997 and shall be deemed to have been substituted w.e.f, 1-4-1975 [or dissolved firm]. 33. Substituted for the words "Agricultural Income- tax Officer" by Act No. 18 of 1997 and shall be deemed to have been substituted w.e.f. 4-2-1993

[(1) Notwithstanding anything contained in Section 3, where agricultural income is received by a company, firm or association of persons and the business through which such income is received is discontinued or any such firm or association of persons is dissolved in any assessment year, the income for the period from the expiry of the previous year for that assessment year upto the date of such discontinuance or dissolution may, at the discretion of the [Assistant Commissioner of Agricultural Income-tax] be charged to tax in that assessment year.

(2) The total income of each completed previous year or part of the previous year included in such period shall be chargeable to tax at the rate or rates in force in that assessment year, and separate assessments shall be made in respect of each such completed previous year or part of any previous year.]

11. Section 27 shall be and shall be deemed always to have been substituted by Act No. 14 of 1983, s.13. [(3) Any person discontinuing any such business or every member of a firm or association dissolved shall give to the Assistant Commissioner of Agricultural Income-tax notice of such discontinuance or dissolution within thirty days thereof and where any such person or member, as the case may be, fails to give the notice required by this sub-section, such officer may direct that a sum shall be recovered from him by way of penalty not exceeding the amount of agricultural income-tax subsequently assessed on him in respect of any agricultural income of the company, firm or association of persons upto the date of the discontinuance or dissolution.]

22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [(4) Where any business through which agricultural income is received by a company, firm or association of persons is discontinued or any such firm or association is dissolved in any year, any sum received after the discontinuance or dissolution shall be deemed to be income of the recipient and charged to tax accordingly in the year of receipt, if such sum would have been included in the total income of the person who carried on the business had such sum been received before such discontinuance or dissolution.

Explanation. For the removal of doubts, it is hereby declared that where before the discontinuance of such business or dissolution of a firm or association hitherto assessed as a firm or association, or as the case may be, on the company, the crop is harvested and disposed of, but full payment has not been received for such crop, or the crop is harvested and not disposed of, the income from such crop shall, notwithstanding the discontinuance or dissolution be deemed to be the income of the company, firm or association for the year or years in which it is received or receivable and the firm or association shall be deemed to be in existence, for such year or years and such income shall be assessed as the income of the company, firm or association according to the method of accounting regularly employed by it immediately before such discontinuance or dissolution.

(5) Where an assessment is to be made under sub-section (1) or subsection (4) the [Assistant Commissioner of Agricultural Income-tax] may serve on the person whose agricultural income is to be assessed or in the case of a firm or association, on any person who was a member of such firm or association at the time of its discontinuance or dissolution or in the case of a company on the principal officer thereof, or on the recipient as the case may be, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of Section 18 and the provisions of the Act shall, so far as may be, apply accordingly, as if the notice were a notice issued under that sub-section.

(6) Where such an order has not been passed in respect of a company, firm or association hitherto assessed as the business not discontinued or in respect of a firm or association hitherto assessed as not dissolved, such firm or association shall not be deemed to have been dissolved or the business of such company, firm or association shall not be deemed to have been discontinued, for the purpose of this Act.

(7) Notwithstanding anything contained in Sections 32-A, 34, 35, 36, 37 or 55, in cases where before the discontinuance of business or dissolution of the firm or association, hitherto assessed as firm or asociation or on such company the crop is harvested and disposed of but full payment has not been received for such crop, or the crop is harvested and not disposed of proceedings to assess or reassess the income from such crop or to revise any assessment or reassessment of such income may be commenced within the period of limitation specified under the provisions of the Act in respect of assessment, reassessment or revision or within two years from the date of commencement of the Karnataka Taxation Laws (Second Amendment) Act, 1997 whichever is later.]

Section27 Liability in case of discontinued firm or association

11. Explanation inserted by Act No. 38 of 1986, s. 6, w.e.f. 10-10-1986. .

(1) Where the business of a firm or association of persons is discontinued or such firm or association is dissolved, the 22. Sections 29, 29-A and 29-B omitted by Act No. 18 of 1994, s. 7(5), w.e.f. 1-4-1994. [Assistant Commissioner of Agricultural Income-tax] shall make the assessment of the agricultural income of the firm or association of persons as if no such discontinuance or dissolution has taken place and all the provisions relating to the levy of penalty or any other sum chargeable under any provisions of this Act shall apply, so far as may be, to such assessment.

(2) Every person who was at the time of such discontinuance or dissolution, a partner of such firm or a member of such association and the legal representative of any such person who is deceased, shall be jointly and severally liable to the assessment on such agricultural income and also to pay the amount of agricultural income-tax, penalty or other sum payable and all the provisions of this Act, so far as may be shall apply to any such assessment or imposition of penalty or other sum.]

Section28 Change in constitution of a firm and succession to business

(1) Where at the time of making an assessment under Section 19, it is found that a change has occurred in the constitution of a firm or that a firm has been newly constituted, the assessment shall be made on the firm as constituted at the time of making the assessment. If the agricultural income-tax cannot be recovered from the firm as so constituted, such tax shall be recoverable from the persons who were members of the firm during the previous year.

(2) Where a person carrying on any business in the course of which agricultural income is received has been succeeded in such capacity by another person, such person and such other person shall each be assessed in respect of his actual share of the agricultural income of the previous year: Provided that, when the person succeeded in the business cannot be found, the assessment of the agricultural income of the year in which the succession took place up to the date of succession, and for the year preceding that year shall be made on the person succeeding him in the like manner and to the same amount as it would have been made on the person succeeded or when the tax in respect of the assessment made for either of such years assessed on the person succeeded cannot be recovered from him, it shall be payable by and recoverable from the person succeeding, and such person shall be entitled to recover from the person succeeded the amount of any tax so paid.

11. Explanation inserted by Act No. 23 of 1985, s. 6 and shall be and shall be deemed always to have been substituted by Act No. 19 of 1989, s. 3. [Explanation. For the purposes of this section, there is a change in the constitution of the firm,

(a) if one or more of the partners cease to be partners or one or more new partners are admitted, in such circumstances that one or more of the persons who were partners of the firm before the change continue as partner or partners after the change; or

(b) where all the partners continue with a change in their respective shares or in the shares of some of them.]

Section29 Application for registration

22. Shall be and shall be deemed always to have been inserted by Act No. 18 of 1994, s. 7(6)(i). . [Omited].

Section29A Procedure on receipt of application

x x x x x.

Section29B Cancellation of registration

x x x x x.]

Section30 Assessment after partition of a Hindu undivided family

(1) Where at the time of making an assessment under Section 19, it is claimed by or on behalf of any member of Hindu Undivided Family, or branch, an Aliyasanthana family or a Marumakkattayam tarwad or tavazhi hitherto assessed as undivided that a partition or maintenance division has taken place among the members or groups of members of such family, branch, tarwad or tavazhi, the 33. Sub-sections (4) and (5) inserted by Act No. 18 of 1994, s. 7(6)(ii), w.e.f 1-4-1994. [Assistant Commissioner of Agricultural Income-tax] shall make such Inquiry thereinto as he may think fit, and if he is satisfied that there has been a partition or maintenance division of the property by metes and bounds among the various members or groups of members and separate enjoyment by them he shall record an order to that effect: Provided that no such order shall be recorded until notice of the inquiry has been served on all the adult members of the family, branch, tarwad or tavazhi entitled to the property as far as may be practicable or in such other manner as may be prescribed.

(2) Where such an order has been passed, the [Assistant Commissioner of Agricultural Income-tax] shall make an assessment of the total agricultural income received by or on behalf of the family, branch, tarwad or tavazhi as such, as if no partition or maintenance division had taken place and each member or group of members shall, in addition to any agricultural income-tax for which he or it may be separately liable, and notwithstanding anything contained in clause (a) of Section 12, be liable for a share of the tax on the income so assessed according to the portion of the famliy, branch, tarwad or tavazhi property allotted to him or it and the [Assistant

Provided that all the members and groups of members whose family, branch, tarwad or tavazhi property has been partitioned or divided for maintenance shall be liable jointly and severally for the tax on the total agricultural income received by or on behalf of the family, branch, tarwad or tavazhi as such up to the date of the partition.

11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Explanation. For the removal of doubts, it is hereby declared that where before the partition of a Hindu undivided family or branch or an Aliyasanthana family or Marumakkattayam tarwad or Tavazhi hitherto assessed as undivided the crop is harvested and disposed off, but full payment has not been received for such crop or the crop is harvested and not disposed off, the income from such crop, shall, notwithstanding the partition, be deemed to be the income of the Hindu undivided family or branch or the Aliyasanthana family or the Marumakkattayam tarward or the Tavazhi for the year or years in which it is received or is receivable, and 22. Sub-section (1) substituted by Act No. 8 of 1989, s. 4(3) and shall be deemed to have come into force w.e.f. 8-9-1988. [the Hindu Undivided Family or branch or the Aliyasanthana Family or the Marumakkattayam tarwad or tavazhi shall be deemed to be in existence for such year or years, as such income] shall be assessed as the income of such family or branch or Aliyasanthana family or Marumakkattayam tarward or Tavazhi according to the method of accounting regularly employed by it immediately before such partition.]

(3) Where such an order has not been passed in respect of a Hindu family, an Aliyasanthana family or branch or a Marumakkattayam, tarwad or tavazhi hitherto assessed as undivided, such family, branch, tarwad or tavazhi shall be deemed for the purpose of this Act to continue to be an undivided family, branch, tarwad or tavazhi.

33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [(4) Notwithstanding anything contained in Sections 32-A, 34, 35, 36, 37 or 55, in cases where before the partition of a Hindu Undivided Family or branch or the Aliyasanthana Family or the Marumakkattayam tarvad or tavazhi, hitherto assessed as undivided, the crop is harvested and disposed of, but full payment has not been received for such crop, or the crop is harvested and not disposed of, proceedings to assess or reassess the income from such crop or to revise any assessment for re-assessment of such income may be commenced within the period of limitation specified under the provisions of this Act in respect of assessment, re-assessment or revisions or within one year from the date of the commencement of the Karnataka Taxation Laws (Amendment) Act, 1994 whichever is later.

(5) Where an assessment is to be made under sub-section (4), the Agricultural Income-tax Officer may serve on the person whose agricultural

Section31 Notice of demand

Where any tax or penalty is due in consequence of any order passed under or in pursuance of this Act, the 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] shall serve on the assessee a notice of demand in the prescribed form specifying the sum so payable.

Section32 Appeal against assessment

22. Sub-section (6) added by Act No. 29 of 1963, s. 8(2), w.e.f. 1-1-1964. [(1) Any assessee aggrieved by any of the following orders of an 33. Section 32-A inserted by Act No. 14 of 1983, s. 14 and shall be deemed to have come into force w.e.f.1-12-1982. [Assistant Commissioner of Agricultural Income-tax] may appeal to the 44. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Joint Commissioner] (Appeals) against such orders:

(a) imposing penalty under clause (b) of sub-section (2-A) of Section 18;

(b) rejecting the plea of denial of the liability to be assessed under the Act;

(c) assessing the amount of income or determining the amount of tax or computing the amount of loss under sub-sections (3) or (4) of Section 19.

(d) refusing to reopen an assessment made under sub-section (4) of Section 19 in pursuance of Section 21.]

(2) The appeal shall be presented within a period of sixty days from the date of service of the order, but the appellate authority may admit an appeal presented after the expiration of the said period, if the authority is satisfied that the appellant had sufficient cause for not presenting it within the said period.

(3) The appeal shall be in the prescribed form and shall be verified in the prescribed manner.

(4) The appellate authority shall fix a day and place for the hearing of the appeal and may from time to time adjourn the hearing and make or cause to be made such further inquiry as it thinks fit.

(5) In disposing of an appeal, the appellate authority may

(a) in the case of an order of assessment

(i) confirm, reduce, enhance or annul the assessment;

(ii) set aside the assessment and direct the 11. Substituted for the expression "Assistant Agricultural Income-tax Officer" by Act No. 5 of 1993, s.5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] to make a fresh assessment after such further inquiry as may be directed; or

(b) in the case of any other order, confirm, cancel or vary such order:

Provided that no enhancement of an assessment or penalty shall be made under this section unless the appellant has had a reasonable opportunity.

22. Substituted for the words "three years" by Act No. 12 of 1991, s. 3, w.e.f. 1-4-1991. [(6) Notwithstanding that an appeal has been preferred under sub-section (1), tax shall be paid in accordance with the assessment made in the case:

Provided that the appellate authority may in its discretion give such directions as it thinks fit, in regard to the payment of tax, if the appellant furnishes sufficient security to its satisfaction in such manner as may be prescribed.]

Section32A Revisional powers of the Joint Commissioner

44. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. 33. Explanation shall be and shall be deemed always to have been inserted by Act No. 23 of 1985, s. 7. .

(1) The 55. Sub-section (4) inserted by Act No. 18 of 1994, s. 7(8)(ii), w.e.f 1-4-1994. [Joint Commissioner] may, of his own motion, call for and examine the record of any order passed or proceeding recorded under the provision of this Act by an [Assistant Commissioner of Agricultural Income-tax] or an 11. Section 34 substituted by Act No. 29 of 1963, s. 9, w.e.f. 1-1-1964. [Agricultural Income-tax Officer] or any other officer subordinate to him and against which no appeal has been preferred under Section 32, for the purpose of satisfying himself as to the legality or propriety of such order or as to the regularity of such proceeding in so far as it is prejudicial to the interests of revenue and pass such orders with respect thereto as he thinks fit.

(2) In relation to an order of assessment passed under this Act, the power under sub-section (1) shall be exercisable only within a period of 22. Sub-section (1) substituted by Act No. 14 of 1983, s. 15 and shall be deemed 10 have come into force w.e.f. 1-12-1982. [four years) from the date on which the order was passed.

(3) No order shall be passed under sub-section (1) enhancing any assessment, unless an opportunity has been given to the assessee to show cause against the proposed enhancement.]

33. Substituted for the expression "Agricultural Income-lax Officer" by Ael No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Explanation. For the removal of doubts, it is hereby declared that subject to the provisions of sub-section (2), the revisional power conferred on the 44. Substituted for the expression "Assistant Agricultural Income-tax Officer" by Act No. 5 of 1993, s 5, w.e.f. 4-2-1993. [Joint Commissioner] by sub-section (1) shall be exercisable in respect of an order passed under this Act by any authority subordinate to him before or after the conferment of revisional power on him.]

55. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5. w.e.1 4-2-1993 [(4) The power under this section shall not be exercisable in respect of issues which are the subject-matter in appeal under Section 32 or Section 34 or in a revision before the High Court.]

Section33 Appeal against order of refusal to refund

The provisions of the foregoing section shall, so far as may be, apply to any order of refusal or any refund admissible under this Act or the rules made thereunder:

Section34 Appeal to the Appellate Tribunal

11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. .

22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f4-2-1993. [(1) Any officer empowered by the State Government in this behalf or any assessee objecting to an order of the 33. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] or an [Agricultural Income-tax Officer] under Section 23, or an order passed by the [Joint Commissioner] under Section 22 or Section 32 or Section 32-A, may appeal to the Appellate Tribunal within sixty days from the date on which the notice of such order was communicated to the assessee.]

(2) The Appellate Tribunal may admit an appeal preferred after the period of sixty days referred to in sub-section (1), if it is satisfied that the assessee had sufficient cause for not preferring the appeal within that period.

(3) The appeal shall be in the prescribed form, shall be verified in the prescribed manner, and shall be accompanied by a fee equal to two per

(4) The Appellate Tribunal shall, after giving both parties to the appeal a reasonable opportunity of being heard, pass such orders thereon as it thinks fit:

Provided that, if the appeal involves a question of law on which the Appellate Tribunal has previously given its decision in another appeal and either a revision petition in the High Court against such decision or an appeal in the Supreme Court against the order of the High Court thereon is pending, the Appellate Tribunal may defer the hearing of the appeal before it till such revision petition in the High Court or the appeal in the Supreme Court is disposed of.

(5) Notwithstanding that an appeal has been preferred under sub-section (1), tax shall be paid in accordance with the assessment made in the case: Provided that the Appellate Tribunal may, in its discretion, give such directions as it thinks fit, in regard to the payment of tax, if the appellant furnishes sufficient security to its satisfaction in such form and manner as may be prescribed:

Provided further that if as a result of the appeal any change becomes necessary in such assessment, the Appellate Tribunal may authorise the 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s, 5, w.e.f.4-2-1993. [Assistant CommissJoner of Agricultural Income-tax] to amend the assessment, and the 22. Substituted for the expression "Deputy Commissioner" by Act No 5 of 1993, v 5, w.e. f 4-2-1993 [Assistant Commissioner of Agricultural Income-tax] shall amend the assessment accordingly, and thereupon, the amount overpaid by the assessee shall be refunded to him without interest, or the additional amount of tax due from him shall be collected in accordance with the provisions of this Act, as the case may be.

(6)

(a) The Appellate Tribunal may, on the application either of the assessee or of the [Joint Commissioner] review any order passed by it under sub-section (4) on the basis of facts which were not before it when it passed the order: Provided that no such application shall be preferred more than once in respect of the same order.

(b) The application for review shall be preferred in the prescribed manner within six months from the date on which the order to which the application relates was communicated to the applicant; and where the application is preferred by the assessee, it shall be accompanied by a fee equal to that which had been paid in respect of the appeal:

Provided that if the application for review is preferred within ninety days from the date on which the order to which the application relates is communicated to the applicant, the application shall be accompanied by half the fee which had been paid in respect of the appeal.

(7) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under this section, and shall make such amendment if the mistake is brought to its notice by the assessee or the 11. Section 35 substituted by Act No. 29 of 1963. s. 10, w.e.f. 1-1- 1964. [Assistant Commissioner of Agricultural Income-tax:]

Provided that an amendment which has the effect of enhancing the assessment or reducing the refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard.

(8) Except as provided in the rules made under this Act, the Appellate Tribunal shall not have power to award costs to either of the parties to the appeal or review.

(9) Every order passed by the Appellate Tribunal under sub-section (4), sub-section (6) or sub-section (7) shall be communicated to the assessee, the 22. Inserted by Act No. 14 of 1983, s. 16 and shall be deemed to have come into force w.e.f. 1-12-1982. [Joint Commissioner] and the Commissioner.

(10) Every order passed by the Appellate Tribunal under sub-section (4) shall, subject to the provisions of sub-sections (6) and (7), and Section 55, be final and every order passed by it under sub-section (6) shall, subject to the provisions of Section 55, be final.]

Section35 Revision by Commissioner or the Additional Commissioner of orders prejudicial to revenue

11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. 22. Substituted tor the words "in cases falling under sub-section (3) of Section 40, at any time within five years and in any other cases at any time within three years" by Act No. 10 of 1987, s. 9, w.e.f 1-4-1987.

(1) The Commissioner or Additional Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by any authority subordinate to him is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.

[(2) No power shall be exercisable under sub-section (1) after the expiry of four years from the date of the order sought to be revised.]

(3) Any order passed by the Commissioner [or [Additional Commissioner]] under this section shall, subject to revision by the High Court under Section 55, be final.]

[Explanation. For the removal of doubts, it is hereby declared that subject to the provisions of sub-section (2), the revisional power conferred on the [Additional Commissioner] by sub-section (1) shall be exercisable in respect of an order passed under this Act, by any authority subordinate to him before or after the conferment of revisional power on him.]

Section36 Income escaping assessment

If for any reason any agricultural income chargeable to tax under this Act has escaped assessment in any financial year or has been assessed at too low a rate, the [Assistant Commissioner of Agricultural Income-tax], may, [at any time within five years], of the end of that year serve on the person liable to pay the tax or in the case of a company on the principal officer thereof, a notice containing alll or any of the requirements which may be included in a notice under sub-section (2) of Section 18 and may proceed to assess or re-assess such income and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section:

Provided that the tax shall be charged at the rate at which it would have been charged if such income had not escaped assessment or full assessment, as the case may be:

11. Section 37 substituted by Act No. 38 of 1986, s. 8, w.e.f. 10-10- 1986. [Provided further that in computing the period of limitation for assessment or re-assessment under this section, the time during which the assessment has been deferred on account of any stay order granted by any Court or other authority in any case or by reason of the fact that an appeal or other proceeding is pending before the High Court or the Supreme Court, shall be excluded:

Provided also that nothing contained in this section limiting the time within which any action may be taken or any order, assessment or re-assessment may be made, shall apply to an assessment or re-assessment made on the assessee or any person in consequence of, ,pr to give effect to, any finding, direction or order made under Section 32, [32-A], 33, [34], 35 or 55 or any judgment, or order made by the Supreme Court, the High Court or any other Court.]

Section37 Rectification of mistakes

11. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993. s 5, w.e.f. 4-2-1993.

(1) With a view to rectifying any mistake apparent from the record, the assessing authority, appellate authority or revising authority may, at any time within five years from the date of an order passed by it, amend such order:

Provided that an amendment which has the effect of enhancing an assessment or otherwise increasing the liability of the assessee shall not be made unless the assessing authority, appellate authority or revising authority, as the case may be, has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard.

(2) Where an order has been considered and decided in any proceedings by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order unde that sub-section in relation to any matter other than the matter which has been so considered and decided.

(3) An order passed under sub-section (1), shall be deemed to be an order under the same provision of law under which the original order, the mestake in which was rectified, had been passed.]

Section38 Power to take evidence on oath, etc

The Commissioner, the 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1903, s. 5, w.e.f.4-2-1993. [Joint Commissioner] and the 22. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993. s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] shall, for the purposes of this Chapter, have the same powers as are vested in a Court under the Code of Civil Procedure,. 1908 (Central Act V of 1908), when trying a suit, in respect of the following matters, namely:

(a) enforcing the attendance of any person and examining him on oath or affirmation;

(b) compelling the production of documents; and

(c) issuing commissions for the examination of witnesses; and any proceeding before the Commissioner, 33. Clause (iii) inserted by Act No. 38 of 1986, s. 9, w.e.f. 10-10-1986. [ 44. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5. w.e.f.4-2-1993. [Additional Commissioner]], 55. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Joint Commissioner] or 66. Inserted by Act No. 14 of 1983, s. 20 and shall be deemed to have come into force w.e.f. 1-12-1982. [Assistant Commissioner of Agricultural Income-tax] shall be deemed to be a "Judicial proceeding" within the meaning of Sections 193 and 228 and for the purposes of Section 196 of the Indian Penal Code, 1860 (Central Act XLV of 1860).

Section39 Power to call for information

The 11. Proviso omitted by Act No. 29 of 1976, s. 14( 1) and shall he deemed to have come into force w.e.f.1-4-1975. [Assistant Commissioner of Agricultural Income-tax] or the 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f 4-2-1993. [Joint Commissioner] may for the purposes of this Act

(i) require any firm to furnish a return of the names of all the members of the firm, their addresses and such other particulars as may be required for the purposes of assessment;

(ii) require any person whom he has reason to believe to be a trustee, guardian or agent, to furnish him with a return of the names of the persons for or of whom he is trustee, guardian or agent and of their addresses.

33. Substituted for the words "at twelve per cent or as may be prescribed" by Act No. 23 of 1985, s. 9 and shall be deemed to have come into force w.e.f. 1-4-1985. [(iii) require any coffee curing works to furnish such particulars as he may require in respect of the transaction of any assessee with such coffee curing works.]

Section40 Assessee not to recover rent in excess of that mentioned in rent-roll, etc

(1) If for the purpose of calculating or verifying the agricultural income specified in a return under Section 18, the assessee produces before any Agricultural Income-tax Authority any rent-roll or other document showing the amount of rent due to him, he shall not be entitled to recover by suit or otherwise rent in respect of any tenure or holding included in his return at a rate higher than that mentioned in such rent-roll or document in respect of such tenure or holding, unless the rent thereof has, since the date of the return, been lawfully enhanced.

(2) Any person who has produced a rent-roll or other document referred to in sub-section (1) may, within one year of producing such rent-roll or document, apply to the 44. Proviso omitted by Act No. 29 of 1976, s. 14(2)(b) and shall be deemed to have come into force w.e.f 1-4-1975. [Assistant Commissioner of Agricultural Income-tax] to make any correction therein and such officer may, if he is satisfied that there has been a bona fide mistake, pass an order correcting such rent-roll or document.

(3) Where the 55. The word "further" omitted by Act No. 29 of 1976, s. 14(2)(c) and shall be deemed to have comtinto force w.e.f. 1-4-1975. [Assistant Commissioner of Agricultural Income-tax] passes an order under sub-section (2), he may assess under Section 36 any income escaping assessment by reason of the original incorrectness of the entry corrected.

CHAPTER 5 Recovery of Tax and Penalties

Section41 Tax when payable

(1) Any amount specified as payable in a notice of demand under Section 31 or an order under Section 32, [Section 32-A],

11. Section 41-A inserted by Act No. 10 of 1987, s. 10, w.e.f. 1-4-1987. [Proviso x x x x x.]

(2) If an assessee makes an application within the time mentioned in the notice of demand in Section 31, for being allowed to pay the tax due, the 22. Substituted for the expression "Assistant Agricultural Income-tax Officer" by Act No. 5 of 1993, s.5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] may in his discretion, by order in writing, allow the assessee to pay the tax due, in instalments not exceeding four in number at such intervals as the said Officer may fix in his discretion or extend the time for the payment of the entire tax due for such reasonable period as he may fix, if the assessee undertakes in writing to pay interest [at the rate charged by the Scheduled Banks for unsecured loans:] [Proviso x x x x x:] Provided [x x x x x] that if, on being allowed to pay the tax due by instalments, the assessee defaults in the payment of any one instalment, he shall be deemed to be a defaulter in respect of the total remaining amount of tax due.

Section41A Payment of interest

11. Section 42 substituted by Act No. 38 of 1986, s. 10, w.e.f. 10-10-1986. Where any amount refundable to any person under an order made under any provisions of this Act is not refunded to him within ninety days

(a) of the date of such order, if that order is made by the refunding authority; or

(b) of the date of receipt of such order by the refunding authority, if that order is made by an authority other than the refunding authority, the refunding authority shall pay such person simple interest at the rate of twelve per cent per annum on the said amount from the day immediately following the expiry of the said ninety days to the day of the refund:

Provided that the interest calculable shall be on the balance of the amount remaining after adjusting out of the refundable amount any tax, penalty or other amount due under this Act, for any year by the person on the date from which such interest is calculable.

Explanation I. If the delay or any part thereof in granting the refund within the aforesaid period of ninety days is attributable to the person to whom the refund is payable the period of such delay shall be excluded for the purpose of calculation of interest.

Explanation II. The expression "refunding authority" means an 22. Clause (aa) inserted by Act No. 7 of 1997, w.e.f. 1-4-1997 [Agricultural Income-tax Officer] or [Assistant Commissioner of

Section42 Mode and time of recovery

11. Section 43-A inserted by Act No. 29 of 1976, s. 15 and shall be deemed to have come into force w.e.f 1-4-1975.

(1) Where any assessee is in default in making payment of the tax or any other amount due under this Act,

(i) the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to pay the tax or any other amount due under this Act, and

(ii) the person or persons liable to pay the tax or any other amount due under this Act shall pay a penalty equal to

(a) one and one half per cent of the tax remaining unpaid for each month for the first three months after the expiry of the time specified under sub-section (1) or allowed under sub-section (2), of Section 41; and

22. Substituted for the expression "Agricultural Income-tax Officer" by Act No, 5 of 1993, s. 5, w.e.f.4-2-1993. [(aa) by attachment and sale or by sale without attachment of any property of such assessee or any other person by such authority, in such manner, as may be prescribed.]

(b) two and one half per cent of such tax for each month subsequent to the first three months as aforesaid. Explanation. For the purposes of clause (ii), the penalty payable for a part of a month shall be proportionately determined.

(2) Any tax assessed or any amount due under this Act from any assessee or any other person may, without prejudice to any other mode of collection, be recovered

(a) as if it were an arrear of land revenue; or

(b) notwithstanding anything contained in the Code of Criminal Procedure, 1973 (Central Act 2 of 1974), on an application to any Magistrate, by such Magistrate, as if it were a fine imposed by him:

Provided that where an assessee or other person who has appealed or applied for revision of any order made under this Act and has complied with an order made by the appellate or the revising authority in regard to the payment of tax or other amount, no proceedings for recovery under this sub-section shall be taken or continued until the disposal of such appeal or application for revision.

(3) The High Court may either suo motu or on an application made by the Commissioner or any person aggrieved by the order revise an order made by a Magistrate under clause (b) of sub-section (2).]

Section43 Right, title and interest in property sold for arrears of tax in certain cases

(1) Where any property of a Hindu undivided family, an Aliyasanthana family or branch, or a Marumakkattayam tarwad, tavazhi, is sold for the realisation of arrears of agricultural income-tax, the right, title and interest of all the members of such family, branch, tarwad to tavazhi in the property shall pass to the purchaser.

(2) Where any person has been assessed to agricultural income-tax on the agricultural income derived from a land held by him wholly or partly for the benefit of other persons and the tax payable by him is in arrears, the land so held by him may be attached and sold for the realisation of such arrears and on such sale, the right, title and interest of such person in the said land shall pass to the purchaser.

Section43A Recovery of tax from certain other persons

11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993. s. 5, w.e.f. 4-2-1993. .

(1) The 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] may at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the assessee at his last address known to the 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax]) require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee, to pay to the 44. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax], either forthwith or upon the money becoming due or being held at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the assessee in respect of the arrears of tax or any other moneys or the whole of the money when it is equal to or less than that amount.

(2) The [Assistant Commissioner of Agricultural Income-tax] may at any time or from time to time amend or revoke any such notice or extend the time for making any payment in pursuance of the notice.

(3) Any person making any payment in compliance with a notice under this section shall be deemed to have made the payment under the authority of the assessee and the receipt of the Treasury or of the 66. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant

(4) Any person discharging any liability to the assessee after receipt of the notice referred to in this section shall be personally liable to the 11. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] to the extent of the liability discharged or to the extent of the liability of the assessee for the amount due under this Act, whichever is less.

(5) Where any person to whom a notice under this section is sent objects to it on the ground that the sum demanded or any part thereof is not due by him to the assessee or that he does not hold any money for or on account of the assessee, then, nothing contained in this section shall be deemed to require such person to pay the sum demanded or any part thereof, to the 22. Inserted by Act No. 14 of 1983, s. 22 and shall be deemed to have come into force w.e.f. 1-12-1982. [Assistant Commissioner of Agricultural Income-tax.]

(6) Any amount which a person is required to pay to the 33. Substituted for the expression "Joint Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] or for which he is personally liable to the 44. The words "appellate or" omitted by Act No. 29 of 1963, s. 13, w.e.f. 1-1-1964. [Assistant Commissioner of Agricultural Income-tax] under this section shall, if it remains unpaid, be a charge on the properties of the said person and may be recovered as if it were an arrear of land revenue.

Explanation. For the purpose of this section the amount due to an assessee or money held for or on account of an assessee by any person shall be computed after taking into account such claims, if any, as may have fallen due for payment by such assessee to such person and as may be lawfully subsisting.]

Section44 Recovery of penalties

Any sum imposed by way of penalty under the provisions of 55. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [clause (b) of sub-section (2-A) of Section 18], Section 22, Section 26 or Section 42 shall be recoverable in the manner provided in this Chapter for the recovery of arrear of tax.

CHAPTER 6 Refunds

Section45 Refunds

(1) If any person satisfies the 66. Section 45-A inserted by Act No. 29 of 1963, s. 14, w.e.f. 19-10- 1963. [Assistant Commissioner of Agricultural Income-tax] that the amount of agricultural income-tax paid by him or on his behalf or treated as paid on his behalf for any year exceeds

(2) The 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Joint Commissioner] in the exercise of his appellate powers, the Commissioner 22. Substituted for the words "Deputy Commissioner" by Act No. 14 of 1983, s. 23 and shall be deemed to have come into force w.e.f. 1-12-1982. [or the 33. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f 4-2-1993. [Additional Commissioner]] in the exercise of his 44. Substituted for the expression "Joint Commissioner" by Act No. 5 of 1993, s 5, w.e.f. 4-2-1993. [x x x x x] revisional powers, if satisfied to the like effect, shall cause a refund to be made by the 55. Substituted for the words, figures and brackets "or sub-section 2 of Section 34" by Act No. 29 of 1963, s. 15, w.e.f. 1-1-1964. [Assistant Commissioner of Agricultural Income-tax] of any amount found to have been wrongly paid or paid in excess.

(3) Where agricultural income of one person is included under any provision of this Act in the total agricultural income of any other person, such other person only shall be entitled to a refund under this Section in respect of such income.

(4) Nothing in this section shall operate to validate any objection or appeal which is otherwise invalid or to authorise the revision of any assessment or other matter which has become final and conclusive or the review by any officer of a decision of his own which is subject to appeal or revision, or where any relief is specifically provided elsewhere in this Act, to entitle any person to any relief other than or greater than that relief.

Section45A Power to withhold refund in certain cases

(1) Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceeding under this Act is pending, and the [Assistant Commissioner of Agricultural Income-tax] is of the opinion that the grant of the refund is likely to adversely affect the revenue, the [Assistant Commissioner of Agricultural Income-tax] may, with the previous approval of the [Joint Commissioner], withhold the refund till such time as the [Joint Commissioner] may determine.

(2) Where a refund is withheld under the provisions of sub-section (1), the State Government shall pay to the assessee simple interest 4at [twleve per cent] per annum on the amount of refund ultimately determined to be due as a result of the appeal or further proceedings for the period commencing after the expiry of six months from the date of the order referred to in sub-section (1) to the date the refund is granted.]

Section46 Refunds admissible under the Rules

Refunds shall also be admissible under this Act in such cases, and to such extent as may be prescribed.

Section47 Power to set off amount of refund against tax remaining payable

Where under any of the provisions of this Act, refund is found to be due to any, person, the 11. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax], the 22. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [ 33. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Joint Commissioner], the [Additional Commissioner]] or the Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded, or any part of the amount against the agricultural income-tax, if any, remaining payable by the person to whom the refund is due.

Section48 Power of representative of deceased person or persons disabled to make claim on his behalf

Where through death, incapacity, bankruptcy, liquidation or other cause, a person who would but for such cause have been entitled to a refund under any of the provisions of this Act, or to make a claim under Section 45, is unable to receive such refund or to make such claim, his executor, administrator or other legal representative or the trustee or receiver, as the case may be, shall be entitled to receive such refund or to make such claim for the benefit of such person or his estate.

Section49 Limitation of claims for refund

No claim to any refund of agricultural income-tax under this Chapter shall be allowed, unless it is made within three years from the last day of the financial year commencing next after the expiry of the previous year in which the agricultural income was received or one year from the date on which the assessment is completed, whichever is later.

CHAPTER 7 Offences and Penalties

Section50 False statements in declaration

If any person makes statement in a verification mentioned in Section 18 or sub-section (3) of Section 32 [or sub-section (3) of Section 34] or in any application under Section 67 which is false and which he either knows or believes to be false or does not believe to be true, he shall be deemed to have committed the offence described in Section 177 of the Indian Penal Code, 1860 (Central Act XLV of 1860).

Section51 Failure to furnish return or to supply information

If any person fails without reasonable cause or excuse

(a) to furnish in due time any of the returns specified in sub-section (1) or sub-section (2) of Section 18 or in Section 39; or

(b) to furnish a certificate required by Section 16; or

(c) to grant inspection or allow copies to be taken in accordance with the provision of Section 62; or

(d) to produce or cause to be produced on or before the date mentioned in any notice under sub-section (4) of Section 18, such accounts or documents as are referred to in the notice, he shall be punishable with fine which may extend to five rupees for every day during which the default continues.

Section52 Prosecution to be at the instance of the 1[Joint Commissioner]

(1) A person shall not be proceeded against foll an offence under Section 50 or Section 51 except at the instance of the 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5. w.e.f. 4-2-1993. [Joint Commissioner.]

(2) Before instituting proceedings against any person under sub-section (1), the 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Joint Commissioner] shall call upon such person to show cause why proceedings should not be instituted against him.

(3) The [Joint Commissioner] may either before or after the institution of proceedings compound any such offences.

Section53 Disclosure of information respecting assesses

(1)(a) The Commissioner may furnish or cause to be furnished to

(i) any officer, authority or body performing any functions under any other law relating to the imposition of any tax, duty, cess or fee; or

(ii) such officer, authority or body performing any functions under any other law as the State Government, if in its opinion it is necessary so to do in the public interest, may, by notification, specify in this behalf, any such information relating to any assessee in respect of any assessment made under this Act as may, in the opinion of the Commissioner, be necessary for the purpose of enabling such officer, authority or body to perform his or its functions under that law.

(b) Where a person makes an application to the Commissioner for any information relating to any assessee in respect of any assessment made under this Act, the Commissioner may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked

(2) Notwithstanding anything contained in sub-section (1) or any other law for the time being in force, the State Government may, having regard to the practices and usages, customary or any other relevant factors, by order notified in the official Gazette, direct that no information or document shall be furnished or produced by a public servant in respect of such matters relating to such classes of assessees or except to such authorities as may be specified in the order.]

CHAPTER 7A Super Tax

11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. Section53A Charge of super-tax

x x x x x x.

Section53B Total agricultural income for purposes of super-tax

x x x x x x.

Section53C Application of Act to super-tax

x x x x x x.]

CHAPTER 8 Miscellaneous

Section54 Place of assessment

(1) Subject to any orders passed under sub-section (1) the agricultural income of a person shall be assessed by the 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5. w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] of the area in which is situated the land from which the greater part of the agricultural income is derived:

Provided that where an assessee has made a return under sub-section (1) of Section 18 to the 33. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] having jurisdiction over the assessee's place of residence or the place where any of his lands is situated or where his accounts are maintained, he shall be deemed to have elected such place as his place of assessment and it shall be accepted by the Officer concerned unless for reasons to be recorded in writing he passes an order that the assessment shall be made in any other place.

(2)

(a) An assessee who has not made a return under Section 18 may, before the expiry of the time allowed for the submission of the return, apply to the 11. Inserted by Act No. 14 of 1983, s. 24 and shall be deemed to have come into force w.e.f. 1-12-1982. [Assistant Commissioner of Agricultural Income-tax] of the area in which is situated the land from which the greater part of the agricultural income of the assessee is derived, to be assessed at his usual place of residence or at the place where the accounts relating to his agricultural income are kept, if either of such places is situated in the State and the 22. Substituted for the expression "Joint Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] shall refer the matter to the 33. Inserted by Act No. 14 of 1983, s. 24 and shall be deemed to have come into force w.e.f. 1-12-1982. [Joint Commissioner] whose decision thereon shall be final.

(b) Where an order is passed under clause (a), the assessee shall not be entitled to make any further application to change his place of assessment:

Provided that the 44. Substituted for the expression "Joint Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] may allow the assessee to be assessed at any other place upon such conditions as he thinks fit.

(3) Notwithstanding anything contained in this section, every 55. Inserted by Act No. 14 of 1983, s. 24 and shall be deemed to have come into force w.e.f. 1-12-1982. [Assistant Commissioner of Agricultural Income-tax] shall have all the powers conferred by or under this Act on an 66. Substituted for the expression "Joint Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] in respect of any agricultural income derived from land situated within the area for which he is appointed.

Section55 Revision by High Court

(1) Within sixty days from the date on which he is served with the order, the assessee or the 88. Substituted for the expression "Joint Commissioner" by Act No. 5 of 1993, s. 5, w.e.f 4-2-1993. [Joint Commissioner], in the case of an order under sub-section (4) or sub-section (6) of Section 34, and the assessee, in the case of an order under Section 35, may prefer a petition to the High Court against the order on the ground that the Appellate Tribunal or the Commissioner [or the [Additional Commissioner]], as the case may be, has either failed to decide or decided erroneously any question of law:

Provided that the High Court may admit an application preferred after the period of sixty days aforesaid if it is satisfied that the petitioner had sufficient cause for not preferring the petition within that period.

(2) The petition shall be in the prescribed form, shall be verified in the prescribed manner, and shall, when it is preferred by the assessee, be accompanied by a fee of one hundred rupees.

(3) If the High Court, on perusing the petition, considers that there is no sufficient ground for interfering, it may dismiss the petition summarily:

Provided that no petition shall be dismissed unless the petitioner has had a reasonable opportunity of being heard in support thereof.

(4)

(a) If the High Court does not dismiss the petition summarily it shall, after giving both parties to the petition a reasonable opportunity of being heard, determine the question or questions of law raised and either reverse, affirm, or amend the order against which the petition was preferred or remit the matter to the Appellate Tribunal or the Commissioner, 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [or the 22. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Additional Commissioner]], as the case may be, with the opinion of the High Court on the question or questions of law raised or pass such other order in relation to the matter as the High Court thinks fit.

(b) Where the High Court remits the matter to the Appellate Tribunal or the Commissioner [or the 44. Inserted by Act No. 14 of 1983, s. 25(1) andshall bedeemed to havecome into force w.e.f. 1-12-1982. [Additional Commissioner]], as the case may be, its opinion on the question or questions of law raised, the Appellate Tribunal or the Commissioner [or the [Additional Commissioner]], as the case may be, shall amend the order passed by it or him in conformity with such opinion.

(5) Before passing an order under sub-section (4), the High Court may, if it considers necessary so to do remit the petition to the Appellate Tribunal or the Commissioner [or the [Additional Commissioner]], as the case may be, and direct it or him to return the petition with its or his finding on any specific question or issue.

(6) Notwithstanding that a petition has been preferred under sub-section (1), the tax shall be paid in accordance with the assessment made in the case:

Provided that if as a result of the petition any change becomes necessary in such assessment, the High Court may authorise the 11. Substituted for the words, figures and brackets "Indian Income-tax Act, 1922 (Central Act XI of 1922)" by Act No. 29 of 1976, s. 8 and shall be deemed to have come into force w.e.f. 1-4-1975. [Assistant Commissioner of Agricultural Income-tax] to amend the assessment, and on such amendment being made, the amount overpaid by the assessee shall be refunded to him without interest, or the additional amount of tax due from him shall be collected in accordance with the provisions of this Act, as the case may be.

(7) (a) The High Court may on the application either of the assessee or of the 22. Substituted for the words, figures and brackets "Indian Income-tax Act, 1922 (Central Act XI of 1922)" by Act No. 29 of 1976, s. 8. [Joint Commissioner], review any order passed by it under sub-section (4) on the basis of facts which were not before it when it passed the order.

(b) The application for review shall be preferred in the prescribed manner within ninety days from the date of communication of the order sought to be reviewed; and where the application is preferred by the assessee, it shall be accompanied by a fee of one hundred rupees.

(8) In respect of every petition preferred under sub-section (1) or sub-section (7), the costs shall be in the discretion of the High Court.]

Section56 Petitions and applications to be heard by a Bench of the High Court

33. Clause (v) inserted by Act No. 14 of 1983, s. 25(2) and shall be deemed to have come into force w.e.f.1-12-1982. Every petition or application preferred to the High Court under Section 55 shall be heard by a Bench of not less than two judges, and in respect of such petition or application, the provisions of Section 98 of the Code of Civil Procedure, 1908 (Central Act V of 1908), shall, so far as may be, apply.]

Section57 Appearance by authorised representative

(1) Any assessee who is entitled or required to attend before any Agricultural Income-tax Authority in connection with any proceeding under this Act otherwise than when required under Section 38 to attend personally for examination on oath or affirmation, may attend either in person or by any person duly authorised by him in writing in this behalf being a relative or a person wholly or principally employed in the service of the assessee or a lawyer or an accountant or an Income-tax Practitioner [or a Sales Tax Practitioner] and not being disqualified on the ground of misconduct by or under any law or under any order of Government.

(2) No person who has been dismissed from Government service shall be qualified to represent an assessee under sub-section (1), and if any lawyer or accountant or an income-tax practitioner is found guilty of misconduct in connection with any proceeding under the 11. Substituted tor the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f4-2-1993. [Income-tax Act, 1961 (Central Act 43 of 1961)], or this Act by the authority empowered to take disciplinary action against members of the profession to which he belongs, or if any other person is found guilty of such misconduct by the Commissioner, the Commissioner may direct that he shall be thence forward disqualified to represent an assessee under sub-section (1): Provided that

(a) no such direction shall be made in respect of any person, unless he is given a reasonable opportunity of being heard;

(b) any person against whom such direction is made may within one month of the making of the direction, appeal to the prescribed authority to have the direction cancelled; and

(c) no such direction shall take effect until one month from the making thereof, or, when an appeal is preferred, until the disposal of the appeal.

(3) In this section

(i) a person regularly employed by the assessee shall include any officer of a Scheduled Bank as defined in the Reserve Bank of India Act, 1934 (Central Act II of 1934), with which the assessee maintains a current account or has other regular dealings;

(ii) "Accountant" means a member of an association of accountants recognised in this behalf by the Government;

(iii) "Income-tax Practitioner" means an Income-tax Practitioner as defined in the 22. Proviso substituted by Act No. 23 of 1985, s. 10 and shall be deemed to have come into force w.e.f.1-4-1985. [Income-tax Act, 1961 (Central Act 43 of 1961);]

(iv) "Lawyer" means any person entitled to plead in any Court of law in the State.

33. Substituted for the words "charged by Scheduled Banks for unsecured loans" by Act No. 12 of 1991,s. 4, w.e.f. 1-4-1991. [(v) "Sales Tax Practitioner" means any person enrolled in the prescribed manner as Sales Tax Practitioner under clause (c) of Section 36 of the Karnataka Sales Tax Act, 1957 (Karnataka Act 25 of 1957).]

Section58 Receipt to be given

A receipt shall be given for any money paid or recovered under this Act.

Section59 Indemnity

Every person deducting, retaining or paying any tax in pursuance of this Act in respect of any agricultural income belonging to any other person is hereby indemnified for the deduction, retention or payment thereof

Section60 Manner of service of notices

(1) A notice or requisition under this Act may be served on the person therein named either by registered post or, as if it were a summons issued by a Court, under the Code of Civil Procedure, 1908 (Central Act V of 1908).

(2) Any such notice or requisition may, in the case of a firm, Hindu undivided family, an Aliyasanthana family or branch or a Marumakkathayam tarwad or tavazhi be addressed to any member of the firm or to the manager, yajaman or karnavan, or any adult male member of the family branch, tarwad or tavazhi and in the case of any other association of persons be addressed to the principal officer thereof.

Section61 Power to grant extension of time for returns, etc

The [Assistant Commissioner of Agricultural Income-tax] may in his discretion, in the case of any person or class of persons extend the date before which the return under sub-section (1) of Section 18 has to be furnished or, on application by an assessee, allow him such extension or extensions of time as the officer thinks fit to furnish the return or comply with the terms of a notice under this Act. [Provided that no such extension shall be granted unless the assessee undertakes to pay in addition to the tax payable, interest at the rate [of twenty-four per cent] on the tax due as per the return from the due date specified in sub-section (1) of Section 18 upto the date of actual payment of such tax.]

Section62 Powers to inspect registers of members of company, etc

The Agricultural Income-tax Authority or any person authorised by him in writing in that behalf may inspect and, if necessary, take copies or cause copies to be taken of any register of the members, debenture holders or mortgagees of any company or of any entry in such register.

Section62A Offences by companies

(1) If the person committing an offence under this Act is a company, the company as well as every person in charge of, and responsible to, the company for the conduct of its business at the time of the commission of the offence shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or that the commission of the offence is attributable to any neglect on the part of, any director, manager, managing agent or any other officer of the company, such director, manager, managing agent or such other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation. For the purpose of this section,

(a) "company" means any body corporate and includes a firm or other association of individuals; and

(b) "director" in relation to firm, means a partner in the firm.]

Section63 Power to make rules

(1) The State Government may, subject to the condition of previous publication, by notification in the Official Gazette make rules for carrying out the purposes of this Act.

(2) In particular and without prejudice to the generality of the foregoing power, the State Government may make rules

(a) as to the manner in which and the procedure by which agricultural income of a person shall be computed;

(b) as to the deductions to be made in the computation of agricultural income;

(c) as to the special deductions and allowances where expenditure has to be incurred for a number of years before income is derived therefrom;

(d) as to the form of returns under Section 18 and the manner in which they should be verified;

(e) as to the form of the notice of demand mentioned in Section 31;

(f) as to the form in which appeals under Sections 32 and 34 shall be presented and the manner in which they shall be verified;

(g) as to the form of the notice of demand mentioned in sub-section (3) of Section 37;

11. Sub-section (2-A) inserted by Act No. 29 of 1963, s. 19(2), w.e.f. 1-1-1964. [(h) as to the form in which the petitions and applications under Section 55 shall be presented and the manner in which they shall be verified;]

(i) as to the manner in which and the authority to whom applications for refunds shall be made and the procedure to be followed in respect of such applications;

j) as to the authority by whom and the manner in which refunds shall be made; and

(k) as to all other matters expressly required or allowed by this Act to be prescribed.

11. Substituted for the word "twenty-five" by Act No. 18 of 1994, s. 7(9)(i)(a), w.e.f. 1-4-1994. [(2-A) Any rule under this Act may be made to have effect retrospectively and when any such rule is made, a statement specifying the reasons for making such a rule shall be laid before both Houses of the State Legislature along with the rule under sub-section (3). All rules made under this Act shall, subject to any modification made under sub-section (3), have effect as if enacted in this Act.]

22. The words "and where the whole of such extent is used for deriving agricultural income by growing coffee either exclusively or interplanted with banana, coconut, cardamom, pepper or orange" omitted by Act No. 10 of 1987, s. 11, w.e.f. 1-4-1987. [(3) Every rule made under this Act shall be laid as soon as may be after it is made before each House of the State Legislature while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions and if, before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.]

Section64 Bar of suits in Civil Courts

No suit shall be brought in any Civil Court to set aside or modify any assessment made under this Act and no prosecution, suit or other proceeding shall lie against any Officer of the State Government for anything in good faith done or intended to be done under this Act.

Section65 Computation of period of limitation

In computing the period of limitation prescribed for any appeal under this Act or for an application under Section 55 the date on which the order complained of was made and the time requisite for obtaining a copy of such order shall be excluded.

Section66 Composition of Agricultural Income-tax

33. Inserted by Act No. 18 of 1994, s. 7(9)(i)(b), w.e.f. 1-4-1994. .

(1) Where the total extent of land under plantation crop held by any person does not exceed 11. Sub-section (5) substituted by Act No. 18 of 1994, s. 7(9)(iv), w.e.f. 1-4-1994. [fifty acres] 22. Sub-sections (6), (7), (8) and (9) inserted by Act No. 18 of 1994, s. 7(9)(v), w.e.f. 1-4-1994. [x x x x x] such person may [subject to such rules as may be prescribed], apply to the prescribed Officer for permission to compound the agricultural income-tax payable by him and to pay in lieu thereof a lumpsum at the rate specified in [the table below: ]

TABLE

SI. No.

Extent of land

Rate of lumpsum payable

1.

Where the extent of land does not exceed 15 acres

Nil

2.

Where the extent of land exceeds 15 acres but does not exceed 20 acres

Rs. 750 per acre after 15 acres

3.

Where the extent of land exceeds 20 acres but does not exceed 25 acres

Rs. 3,750 plus Rs. 1,000/- per acre after 20 acres.

4.

Where the extent of land exceeds 25 acres but does not exceed 30 acres

Rs. 8,750/- plus Rs. 1,400/- per acre after 25 acres.

5.

Where the extent of land exceeds 30 acres but does not exceed 40 acres

Rs. 15,750/- plus Rs. 1,750/- per acre after 30 acres.

6.

Where the extent of land exceeds 40 acres but does not exceed 50 acres

Rs. 33,250/- plus Rs. 2,250/- per acre after 40 acres.

[x x x x x.]

[(2) x x x x x.]

[Provided that where the average yield of coffee in respect of such land exceeds 600 kilograms per acre, the holder of such land shall, in addition to the lumpsum payable under sub-section (1), pay an additional lumpsum at the rate of rupees 400 per tonne of such excess yield.]

(3) Every application under sub-section (1) shall be submitted in such form, in such manner and within such time as may be prescribed.

(4) The prescribed Officer shall, after satisfying himself that the particulars specified in the application are correct, by order in writing grant the permission.

11. Section 67 omitted by Act No. 14 of 1983, s. 27 and shall be deemed to have come into force w.e.f.1-12-1982. [(5) The permission granted under sub-section (4) shall be in force for the year for which it is granted and shall continue to be in force for the next two years immediately following or until such time the extent of land holding exceeds the maximum specified in sub-section (1) whichever is earlier, and in respect of that period the provisions of this Act relating to the submission of returns, accounts or other documents or the assessment to agricultural income-tax shall not apply to the grantee.]]

[(6) Where any person permitted to pay tax under sub-section (1) re-opts to pay tax in accordance with Section 3 afte.r the expiry of the period of three years for which permission was granted under sub-section (4), then notwithstanding anything contained in the Act. Such person shall be assessed as if it were a new assessment and shall not be eligible to carry forward any loss or unabsorbed depreciation of any of the previous years";

(7) The assessment of tax under this section on the fraction of an acre shall be made proportionately and tax payable shall be rounded off to the nearest rupee;

(8) When there is any change in the extent of land during the previous year the maximum extent of land held for not less than one hundred and eighty days during the later period of the previous year shall be deemed to be the extent of land held during the previous year for the purpose of assessment of tax under this section.

(9) If for any reasons, extent of land in respect of which composition is permissible under this section, has escaped composition or composition has been permitted at a lower rate, the provisions of Section 36 shall apply as if it were an escape of agricultural income under the Act.]

Section67 Composition of Agricultural Income Tax

11. Sub-section (3) shall be and shall always be deemed to have been inserted by Act No. 25 of 1962. s. 4. [x x x x x.]

Section68 Amendment of Madras Act XIX of 1954

In Section 3 of the Madras Land Revenue (Surcharge) Act, 1954 (Madras Act XIX of 1954), Explanation II shall be omitted.

Section69 Repeal and savings

(1) The Coorg Agricultural Income-tax Act, 1951 (Coorg Act 1 of 1951) as in force in the Coorg District, the Hyderabad Agricultural Income-tax Act, 1950 (Hyderabad Act XIII of 1950) as in force in the Hyderabad Area, the Madras Plantations Agricultural Income-tax Act, 1955 (Madras Act V of 1955) as in force in the Madras Area and the Mysore Agricultural Income-tax Act, 1955 (Mysore Act 4 of 1955), as in force in the Mysore Area, are hereby repealed:

Provided that such repeal shall not affect

(a) the previous operation of the said enactments or anything duly done or suffered thereunder; or

(b) any right, privilege, obligation or liability acquired, accrued or incurred under the said enactments; or

(c) any penalty, forfeiture or punishment incurred in respect of any offence committed against the said enactments; or

(d) any investigation, legal proceeding (including assessment proceeding) or remedy in respect of any such right, privilege, obligation, liability, forfeiture or punishment as aforesaid;

(2) Notwithstanding anything contained in sub-section (1), for the purpose of giving effect to the preceding proviso to the said sub-section

(1), the State Government may by notification, in the Official Gazette, make such provision as appears to it necessary or expedient

(a) for making omissions from, additions to and adaptations and modifications of the rules, notifications and orders issued under the repealed enactments;

(b) for specifying the authority, officer or person who shall be competent to exercise such functions exercisable under any of the repealed enactments or any rules, notifications or orders issued thereunder as may be mentioned in the said notification.

11. Schedule substituted by Act No. 7 of 1997, w.e.f. 1-4-1997. [(3) Notwithstanding anything contained in sub-section (1), nothing contained in any of the repealed enactments limiting the time within which any action may be taken or any order, assessment or re-assessment may be made shall apply to an assessment or re-assessment made on the assessee or any person

(i) in consequence of, or to give effect to, any finding, direction or order made under any provision of the relevant repealed enactment or any judgment, or order made by the Supreme Court, High Court or any other Court whether before or after the commencement of this Act;

(ii) to rectify any error on account of the assessment of such assessee or person under this Act, instead of under the relevant repealed enactment, provided such assessment or re-assessment under the repealed enactment is made within a period of two years from the date of commencement of the Karnataka Agricultural Income-tax (Amendment) Act, 1962.]

Section70 Power to remove difficulties

(1) If any difficulty arises in giving effect to the provisions of this Act in consequence of the transition to the said provisions from the provisions of the Acts in force immediately before the commencement of this Act, the State Government may, by order published in the Official Gazette, make such provisions as appear to it to be necessary or expedient for removing the difficulty.

(2) If any difficulty arises in giving effect to the provisions of this Act (otherwise than in relation to the transition from the provisions of the Acts in force before the commencement of this Act), the State Government may, by order published in the Official Gazette, make such provisions, not inconsistent with the purposes of this Act, as appear to it to be necessary or expedient for removing the difficulty.

SCHEDULE A Rate of Agricultural Income-tax

A Rate of Agricultural Income-tax

SCHEDULE[See Section 3]

SCHEDULE

[See Section 3]

(Rate of Agricultural Income-tax)

PART I

In the case of a person other than a Company or Firm:

Where the total agricultural income does not exceed Rs. 40,000/-

Nil

Where the total agricultural income exceeds Rs. 40,000/- but does not exceed

ten per cent of the amount by which the total income exceeds Rs. 40,000.

Rs. 50,000/-

Where the total agricultural income exceeds Rs. 50,000/- but does not exceed Rs. 75,000

Rs. 1,000 plus twenty per cent of the amount by which the total income exceeds Rs. 50,000

Where the total agricultural income exceeds Rs. 75,000/- but does not exceed Rs. 1 lakh

Rs. 6,000 plus thirty per cent of the amount by which the total income exceeds Rs. 75,000.

Where the total agricultural income exceeds Rs. 1 lakh

Rs. 13,500 plus forty per cent of the amount by which the total income exceeds Rs. 1 lakh

PART II

In case of a Firm

On whole of the total agricultural income

40 per cent

PART III

In the case of company

Where the total agricultural income does not exceed Rs. 1 lakh

thirty per cent of the total income

Where the total agricultural income exceeds Rs. 1 lakh but does not exceed Rs. 5 lakh

Rs. 30,000 plus forty per cent of the amount by which the total income exceeds Rs. 1 lakh.

Where the total agricultural income exceeds Rs. 5 lakh

Rs. 1,90,500 plus fifty per cent of the amount by which the total income exceeds Rs. 5 lakh]

SCHEDULE B SCHEDULE

SCHEDULE[See Section 2(1)(s)] SCHEDULE B

[See Section 2(l)(s)]

Modifications subject to which the provisions of this Act shall apply in cases where the previous year in relation to the assessment year commencing on the first day of April, 1989, referred to in the second proviso to clause (s) of sub-section (1) of Section 2, exceeds twelve months.

1. Definitions.In this Schedule "transitional previous year" means the

period reckoned as the previous year for the assessment year commencing

on the First day of April, 1989, in the manner specified in the second proviso

to clause (s) of sub-section (1) of Section 2.

2. Special provisions in case where the transitional previous year is

longer than twelve months.In a case where the transitional previous year

is longer than twelve months, the provisions of this Act shall apply subject

to the modifications provided in rules 3, 4 and 5 of this Schedule.

3. Modifications pertaining to monetary limits, etc.The provisions of

this Act specified in column (1) of the Table below, shall be subject to the

modification that the reference therein to the amount or amounts specified

in the corresponding entry in column (2) of the said Table, shall be construed

as a reference to the amount or amounts as increased by multiplying each

such amount by a fraction of which the numerator is the number of months

in the transitional previous year and the denominator is twelve:

Provided that for the purpose of this rule and rules 4 and 5, where the transitional previous year includes a part of a month, then, if such part is fifteen days or more, it shall be increased to one complete month and if such part is less than fifteen days, it shall be ignored.

TABLE

 Provision of the Act

 Amount

 (1)

 (2)

 Section 5-A(l)

 6,000-00 9,000-00 & 12,000-00

 4. Modification in respect of depreciation allowance.Where the

assessee's agricultural income for a period of thirteen months or more is included in his total income for the transitional previous year, the allowance under clause (e) of sub-section (1) of Section 5 in respect of depreciation of buildings, machinery, plant, fencing materials, hose pipes and furniture, calculated in the manner stated therein, shall be increased by multiplying it by a fraction of which the numerator is the number of months in the transitional previous year and the denominator is twelve.

5. Modification in respect of rate of tax.The tax chargeable on the

total agricultural income of the transitional previous year shall be calculated at the average rate of tax on the amount obtained by multiplying such total agricultural income by a fraction of which the numerator is twelve and the denominator is the number of months in transitional previous year, as if the resultant amount were the total income.

6. Power of Government to grant relief in case of hardship.The

Government may, if it considers it desirable or expedient so to do for avoiding genuine hardship, by general or special order, grant appropriate relief in any case or class of cases where the transitional previous year is longer than twelve months".

Rule

KARNATAKA AGRICULTURAL INCOME-TAX RULES, 1957

In exercise of the powers conferred by sub-sections (1) and (2) of Section 63 of the Karnataka Agricultural Income-tax Act, 1957 (Karnataka Act No. 22 of 1957), the Government of Karnataka hereby makes the following rules, the draft of the same having been previously published as required by sub-section (1) of the said section.

CHAPTER 1 Preliminary

Rule1 Title

(a) These rules may be called the Karnataka Agricultural Income-tax Rules, 1957.

(b) These rules shall be deemed to have come into force from the first day of October, 1957.

Rule2 Definitions

In these rules, unless the context otherwise requires:

(a) "Act" means the Karnataka Agricultural Income Tax Act, 1957;

(b) "Form" means a form appended to these rules;

(c) "Section" means a section of the Act;

(d) "Tax" means the agricultural income-tax payable under the Act.

CHAPTER 2 Charge of Agricultural Income-tax

Rule3 Deductions on account of depreciation of capital assets

11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f 4-2-1993. [

(1)1 The deductions under Section 5 of the Act, in respect of depreciation of buildings, machinery, plant, fencing materials, hose pipes and furniture which are required for the purpose of deriving the agricultural income shall be made in accordance with the following rates:

TABLE

SI. No.

 Block of Assets

 Depreciation allowable on the written-down value

 (1)

(2)

(3)

I. BUILDINGS:

 1.

 General rate

 5%

 2.

 Factory buildings (excluding offices, god owns /offieers' and employees' quarters, roads and bridges)

 10%

 3.

 Purely temporary erections

 100%

4.

 Tanks for irrigation purposes

 10%

 5.

 Irrigation channels-pucca

 10%

 6.

 Irrigation wells-pucca

 10%

 II. MOTOR CARS:

 10%

 III. MACHINERY AND PLANTS

 1.

 Motor cycles and jeeps

 25%

 2

 Lorries

 25%

 3.

 Tractors, Power-tillers,

Tractor-Trailers, Power Tiller

  trailers, Water-carriers, etc.

 20%

 4.

 Irrigation equipments such as sprinklers and sprayers

 20%

IV. FURNITURS AND FITTINGS:

 10%

 V. General machinery, implements, plant and other assets not specified in items I, II, III and IV above

 20%

 VI. Energy Producing and Saving Devices-Non-Conventional

 30%

11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f 4-2-1993. Provided that if any asset falling within a block of assets is acquired by the assessee during the previous year and is put to use for the purpose of deriving agricultural income for a period of less than one hundred and eighty days in the previous year, depreciation on such assets will be allowed at fifty per cent of the depreciation allowable according to the percentage prescribed in respect of any of the assets falling within the block of assets specified above.

22. Sub-rules (3) and (4) omitted by GSR 182, dated 2-7-1973, w.e.f 26-7-1973 (2) In respect of buildings newly erected or new 33. Inserted by GSR 389, dated 22-11-1976 and shall be and shall be deemed to have been substituted w.c.f. 1-4-1972 [machinery (including car) or new plant installed, after 31st day of March, 1956, a further sum equivalent to twenty per cent of the value of such buildings, [machinery (including car)] or plant shall be deducted under clause (e) of Section 5 in respect of the year in which erection or installation was made.

(3) For the purpose of obtaining an allowance for depreciation under clause (e) of Section 5, the assessee shall furnish particulars to the [Assistant Commissioner of Agricultural Income-tax in Part V of Form 3.

Rule4 Mode of determination of capital assets for depreciation allowance

(1) In the case of assets acquired before the previous year but after the commencement of the Act, the written down value shall be the actual cost of the assets so acquired less all depreciation actually allowed under rule 3.

(2) In the case of assets acquired before the commencement of the Act,

(i) in any area in which the agricultural income was liable to tax prior to such commencement, the written down value shall be the actual cost to the assessee less the depreciation allowed under the Agricultural Income-tax Law in force in such area prior to such commencement; and

(ii) in any other area, the written down value shall be the actual cost to the assessee less for each financial year since the acquisition, the amount of depreciation applicable to the assets being at the rate prescribed for the purposes of Indian Income-tax for each year since the first April, 1922 and at the Indian Income-tax rates in force on the first April, 1922 for each such year prior to the date:

Provided that if no deduction has been made in respect of an asset after it is purchased in any year or years either because it was then not used for the purpose of deriving agricultural income or because no agricultural income-tax was then payable, the 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] or any other superior officer in passing or revising an order of assessment shall inspect the asset and determine the deterioration, if any, in the asset during the year or years aforesaid and reduce the written down value accordingly.

22. Sub-rules (3) and (4) omitted by GSR 182, dated 2-7-1973, w.e.f 26-7-1973 [(3) x x x x x.

(4) x x x x x.]

Rule5 Computation of agricultural income under Section 5(1) and (m)

For arriving at the net assessable amount of agricultural income, deductions in respect of the following items under clauses (1) and (m) of Section 5 shall also be made:

(a) the expenses incurred by the cultivator or receiver of rent in kind in performing any process contemplated under Section 5(c) and (d);

(b) the customary annuities paid in cash or kind to artisans and other persons whose services are required in connection with cultivation;

(c) cost of amenities provided to labour force under any law for the time being in force:

Provided that no expenses of a capital nature on any payments of charitable or religious nature shall be permissible save in the manner provided under clause (f) and (g) of Section 12;

(d) any sums paid a sgratuity to the retiring staff 33. Inserted by GSR 389, dated 22-11-1976 and shall be and shall be deemed to have been substituted w.c.f. 1-4-1972 [or as contribution payable in respect of periods subsequent to 1st April, 1972 to the Group Gratuity Life Assurance Scheme of the Life Insurance Corporation of India or any other Scheme or fund approved by the Commissioner for payment of gratuity under the "Payment of Gratuity Act, 1972:]

Provided such payments do not ordinarily exceed one month's pay for every completed year of service in each case and are not in the nature of solatium or compensation granted for loss of employment or other consideration other than past services of the employees.

11. Explanation inserted by GSR 146, dated 18-6-1981 and shall be and shall be deemed always to have been inserted [Explanation.-Except as provided under this clause no other provision (whether called as such or by any other name) made by the assessee for payment of gratuity to his employees on their retirement or on termination of their employment for any reason shall be allowed;]

(e) any sum paid as annuity provided it is secured by a charge on the lands from which the agricultural income is derived;

 (f) any sum paid to an employee as bonus or commission for services rendered where such sums would not have been payable to him as profits or dividends, if it had not been paid as bonus or commission, provided that the amount of bonus or commission is reasonable with reference to (1) the pay of the employee and the conditions of his service, (2) the income of the assessee for the year in question and (3) the general practice;

(g) any sum paid by the assessee as subscriptions to any agricultural association in India;

(h) any contribution to a provident fund 22. The words "or superannuation fund" omitted by GSR 182, dated 2-7-1973, w.e.f. 26-7-1973. [x x x x x x] which is maintained in accordance with the conditions detailed in Appendix II (d) and 33. Substituted for the words "is recognised for the purpose of the Act" by Notification No. RD 11 CAX 60, dated 24-11-1960. [is recognised for the purpose of the Act, or any contribution made to the Provident Fund established under a scheme framed under the Employees' Provident Fund Act, 1952 (Central Act XIX of 1952);]

(i) for the purpose of sub-clause (ii) of clause (n) of Section 5 the deduction in respect of purchase or replacement of cattle or implements which are necessary for cultivation shall be one half of the cost incurred for such purchase or replacement.

Rule5A Restrictions and conditions for the purpose of Section 12(g)

44. Rule 5-A inserted by GSR 267, dated 13-1-1984, w.e.f. 13-1-1984. The approval under Section 12(g) to any sum paid as donations to any institution or fund shall be subject to the following restrictions and conditions, namely:

(i) any sum paid as such donation shall not exceed 55. Substituted for the words "ten per cent" by GSR 90, dated 21-7-1995 and shall be deemed to have come into force w.e.f. 1-4-1995. [five per cent] of the total agricultural income as reduced by any [x x x x x];

(ii) the surplus funds of the institution or fund as the case may be which are not utilised for charitable purpose shall not be invested otherwise than in one or more of the forms or modes specified below,

(a)invesrment in savings certificates as defined in clause (c) of Section 2 of the Government Savings Certificates Act, 1959 (Central Act XLVI of 1959) and in any other securities or certificates issued by the Central Government under the small savings schemes of Central Government;

(b)deposit in any account with the Post Office Savings Bank;

(c)deposit in any Nationalised or Co-operative Banks;

(d)investment in units in the Unit Trust of India established under the Unit Trust of India Act, 1963 (Central Act LII of 1963);

(e)investment in any security for money created and issued by the Central Government or the State Government;

(f)investment in debentures issued by or on behalf of any company or corporation located in Karnataka, both the principal whereof and the interest whereon are fully and unconditionally guaranteed by the Central Government or the State Government;

(g)investment or deposit in any Government Company as defined in Section 617 of the Companies Act, 1956 (Central Act 1 of 1956), which is located in Karnataka;

(iii) the approval under this rule shall not be granted for a period exceeding three years at a time;

(iv) every approved institution or fund shall furnish its annual report together with the audited statement of accounts before the 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] or 33. Substituted for the expression "Assistant Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5. w.e.f. 4-2-1993. [Agricultural Income-tax Officer] having jurisdiction over the area concerned every year, within six months after the completion of its accounting year or within such further time

(v)such further conditions as may be considered necessary to impose at the time of grant of approval by the State Government:

Provided that in case of violation of any conditions or restrictions of approval or mis-utilisation of the funds donated for any purpose other than a charitable purpose as defined in the Act the approval granted to the institution or fund shall be liable to be cancelled by the State Government after affording an opportunity to the party affected.]

Rule6 Computation of income in regard to tea

In respect of agricultural income from tea grown and manufactured in the State the portion of the income worked out under the Indian Income-tax Act, 1922, and left unassessed as being agricultural income shall be assessed under this Act after allowing such deductions provided for in the Act.

Rule7 Computation of deduction on mixed income

Where a deduction in respect of any item, admissible under Section 5 or under Rule 5, is a common charge incurred for the purpose of deriving agricultural income assessable under the Act and income chargeable under the Indian Income-tax Act, 1922, the deduction admissible under the Act shall be the actual amount relating to the income derived from agricultural operations and proved by accounts or other conclusive evidence. Where no such accounts or evidence is produced the 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.c.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] shall proceed to assess the income to the best of his judgment.

Rule8 Computation of income derived from lands situated partly within the State and partly without under Section 6(ii).

For the purpose of clause (ii) of Section 6 where an agricultural income is derived from lands situated partly within the State and partly outside the State and the income attributable to the land situated within the State cannot be determined from the accounts maintained by the assessee and where no accounts or other conclusive evidence is produced by him to prove the actual income derived from lands situated within the State separately the 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] shall compute such income to the best of his judgment as provided in the proviso to clause (b) of Rule 9.

Rule9 Method of accounting

Where no method of accounting has been regularly employed by the assessee or where the method employed is such that in the opinion of the Agricultural Income-tax Officer the agricultural income cannot be properly deduced therefrom, the 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] shall, after making such enquiry, as he considers necessary, compute the agricultural income of the assessee as under:

(a) if the agricultural produce of the land has been sold, the actual price for which such produce was sold;

(b) if the agricultural produce of the land has not been sold, or if such produce has been utilised only as raw material for any manufacturing business or for distribution to labourers by way of wages in kind, the value of such produce at the average market rate prevailing for the previous year concerned shall be taken to represent the value of the crop: Provided that if no details are available relating to quantity of crops raised on the land or the cultivation expenditure incurred in raising such crops, the 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] or any other superior officer in passing or revising an order of assessment 33. Substituted for the words "shall inspect the land and determine" by Notification No. RD 77 CAX 59, dated 11-1-1960. [may, if considered necessary, inspect the land and shall determine] the agricultural income to the best of his judgment, taking into view the nature of the crop, extent of the land cultivated, method of cultivation employed, seasonal conditions and the comparative data from neighbouring assessees maintaining regular accounts;

(c) in case of coffee crop of the previous year, the cash amount received within the accounting period in respect of the crop grown and consigned by the assessee to the Coffee Board or the estimated value of such crop shall be taken into account as the income of the year according to the method of accounts regularly employed by the assessee: 44. Proviso substituted by GSR 267, dated 13-1-1984, w.c.f. 13-1-1984. [Provided that if the estimated value declared by the assessee is less than the average of the rates declared by the Coffee Board for three immediate previous years the 55. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.c.f. 4-2-1993. [Assistant Commissioner of 11. Substituted for the expression "Assistant Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Agricultural Income-tax Office] shalltake into consideration the average rates for the purpose of assessment:] Provided further any receipt in respect of the earlier season's coffee crop received during the accounting period in excess of the amount already taken into consideration in the assessments of preceding years shall be considered as the income of the previous year.

Rule9A Maintenance of accounts

22. Rule 9-A inserted by Notification No. FD 29 CAX 97, dated 25-9-1997 and shall be deemed to have come into force, w.e.f. 1-4-1997 (1) Every assessee other than an assessee permitted to pay amount by way of composition under Section 66, shall keep and maintain true and complete accounts together with supporting documents such as invoices, vouchers, way bills, lorry receipts and documents of similar nature, showing details of.

(i) purchases of assets employed directly or indirectly towards deriving agricultural income and their cost of maintenance;

(ii) purchases of inputs such as fertilisers, insecticides, pesticides, weedicides, copper sulphate, etc.;

(iii) expenditure incurred on all items specified in Section 5;

(iv) day-do-day stock account of raw coffee and cured coffee with particulars of opening balance, receipts, disposals and closing balance, in terms of quantity;

(v) expenditure incurred towards curing of raw coffee, manufacture/processing of coffee into coffee powder, instant coffee, blended coffee, etc.;

(vi) expenditure on transportation of goods;

(vii) details of income derived from:

(a)sale of cardamom, coffee, linoloe (sic), orange, pepper, rubber or tea;

(b)sale of manufactured/processed goods of coffee powder, instant coffee, blended coffee, tea, processed fruit, fruit juice, etc.; and

(c)sale of standing trees and any assets.

(2) Every assessee shall within fifteen days of the publication of these intimate his Assistant Commissioner of Agricultural Income-tax

(3) Every assessee who intends to change the location/premises wherein he keeps the books of accounts, shall intimate his Assistant Commissioner of Agricultural Income-tax about such change with relevant details, fifteen days before effecting such a change.]

CHAPTER 3 RETURN AND ASSESSMENT

Rule10 Submission of return by a Company under Section 16

(1) A return shall be furnished by the principal officer of a company who furnishes certificates under Section 16 in respect of a dividend or aggregate dividends if the amount thereof exceeds one rupee in the case of a shareholder which is a company and in respect of a dividend or aggregate dividends if the amount thereof exceeds Rs. 5,000 in the case of any other shareholder.

(2) The return by the principal officer of the company under sub-rule (1) shall be in Form 1 and shall be delivered to the 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No.5 of 1993, s.5, w.e.f. 4-2-1993. [Assistant Commissioner of agricultural income-tax who assesses the Company.

Rule11 Froms of notices

(1) The notice referred to in sub-section (2) of Section 18 and the notice calling for. the returns mentioned in sub-section (1) of Section 39 shall be in Form 2.

(2) The notice referred to in sub-section (4) of Section 18 shall be in Form 4.

(3) The notice referred to in sub-section (2) of Section 19 shall be in Form 5.

(4) The notice of demand under sub-section (4) of Section 23 shall be in Form 10-A.

22. Sub-rule (5) inserted by GSR 182, dated 2-7-1973, w.e.f. 26-7-1973. [(5) Notice of demand under Section 31 shall be in Form 12-A.]

Rule12 Form of return and assessment

(1) The return of total agricultural income required under sub-sections (1) and (2) of Section 18 shall be in Form 3 and shall be verified in the manner indicated therein.

(2) The assessment order under 11. The words, brackets and figure "sub-section (3) of omitted by Notification No. RD 9 CAX 59, dated 16-6-1959. [x x x x x] Section 19 shall be in Form 6.

Rule13 Application for registration of a firm

22. Rule 13 substituted by GSR 160, dated 9-6-1986, w.e.f. 11-6-1986. . Application for registration of a firm under Section 29, shall be made to the 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] in Form 7.]

Rule14 Form of Application for registration of Firms under Section 29

44. Rule 14 omitted by GSR 160, dated 9-6-1986, w.e.f. 11-6-1986. . [x x x x x.]

Rule15 Declaration under Section 79

55. Rule 15 substituted by GSR 160, dated 9-6-1986, w.e.f. 11-6-1986. . The declaration to be furnished under sub-section (7) of Section 29 shall be in Form 8.]

Rule16 Communication regarding partner who is a Benamidar

66. Rule 16 substituted by GSR 160, dated 9-6-1986, w.e.f. 11-6-1986. . The Communication required to be made by any partner of a firm under clause (b) of the explanation below sub-section (1) of Section 29-A shall be in Form 8-A.]

Rule17 Application for renewal of Registration of Firm

77. Rules 17 to 19 omitted by GSR 160, dated 9-6-1986, w.e.f. 11-6-1986. . [x x x x x]

Rule18 Renewal of registration of Firm

[x x x x x].

Rule19 Certificate of cancellation of registration of Firms

[x x x x x]

Rule20 Notice of enquiry on members of Hindu Undivided Family claiming partition

The notice of enquiry under the proviso to sub-section (1) of Section 30 shall be in Form 9.

Rule21 Forms of Notices of Demands

(1) The notice of demand under Section 31 for payment of tax provisionally assessed under Section 20 shall be in Form 11.

(2) The notice of demand under Section 31 other than the notice specified in sub-rule (1) or Rule 22 shall be in Form 10 and shall be accompanied by the order of assessment appended thereto except in cases where a penalty has been levied subsequent to the assessment order and it is not practicable to include the amount of penalty in the assessment form.

Rule22 Notice of demand on levy of interest under Section 41(2)

The notice of demand under Section 31 for payment of interest levied under sub-section (2) of Section 41 on tax payable shall be in Form 12.

Rule22A Furnishing of security

88. Rule 22-A inserted by GSR 182, dated 2-7-1973, w.e.f 26-7-1973. . For purposes of proviso to sub-section (6) of Section 32 or proviso to sub-section (5) of Section 31, the appellant may furnish security in the form of cash or Bank guaranteo of any scheduled Bank].

Rule22B Notice of demand for payment of interest under Section 61

11. Rule 22-B inserted by GSR 267, dated 13-1-1984, w.e.f. 13-1-1984. . The notice of demand under Section 31 for payment of interest payable under Section 61 shall be in Form No. 12-B.]

Rule23 Appeal under Section 32 to the Joint Commissioner

22. Substituted for the expression "Deputy Commissioner" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. . An appeal under Section 32, shall,

(a) in the case of an appeal against the order of the 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f. 4-2-1993. [Assistant Commissioner of Agricultural Income-tax] under Section 19, be in Form 13;

(b) in the case of an appeal against the order of the 44. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5. w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] under sub-section (2) of Section 26, be in Form 14;

(c) in the case of an appeal under Section 42, be in Form 15;

(d) in the case of an appeal under Section 30, be in Form 16;

(e) in the case of an appeal under Section 22, be in Form 17; and

55. Clause (f) inserted by GSR 274, dated 10-8-1964. [(f) in the case of an order under Section 29, be in Form 28-A.]

Rule24 Appeal and review under Section 34, to the Appellate Tribunal

(1) An appeal under Section 34, in the case of an appeal against

(a) an order under clause (a) of sub-section (5) of Section 32 77. Inserted by GSR 267, dated 13-1-1984, w.e.f. 13-1-1984. [or 32-A] shall be in Form 18;

(b) an order under Section 22 imposing a penalty, or an order under clause (b) of sub-section (5) of Section 32, confirming, cancelling, varying a penalty imposed under Section 22, shall be in Form 19;

(c) an order under Section 23, shall be in Form 17-A;

(d) an order under clause (b) of sub-section (5) of Section 32, confirming, cancelling or varying a penalty imposed under Section 42, shall be in Form 20;

(e) an order under clause (b) of sub-section (5) of Section 32, confirming, cancelling or varying an order under Section 29 shall be in Form 21;

(f) an order under clause (b) of sub-section (5) of Section 32 confirming, cancelling or varying an order under Section 30, shall be in Form 18-A.

(2)

(a) Every appeal preferred under sub-rule (1) shall be in quadruplicate and accompanied by four copies (one of which shall be the original or an authenticated copy) of the order appealed against and also four copies of the order of the 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] in case the appeal is a second appeal.

(b) It shall also be accompanied by a Treasury Receipt in support of having paid the fee calculated at the rate of two per cent of the amount of assessment objected to and shall in no case be less than five rupees or more than two hundred rupees.

(3)

(a) Every application for review under clause (a) of sub-section (6) of Section 34 to the Appellate Tribunal shall be preferred in Form 21-A and shall be verified in the manner specified therein.

(b) It shall be in quadruplicate and shall be accompanied by four copies of the original order of the Appellate Tribunal.

(c) It shall also, where it is preferred by the assessee, be accompanied by treasury receipt in support of having paid the fee equal to that which had been paid in respect of the appeal:

Provided that if the application is preferred within ninety days from the date on which order of the Appellate Tribunal was communicated to the applicant, the fee payable shall be half the amount which had been paid in respect of the appeal.

(4) If the Appellate Tribunal allows an appeal or application for review preferred by an assessee under Section 34, it may, in its discretion, by order, refund either wholly or partly the fee paid by the assessee under sub-section (3) or clause (b) of sub-section (6) of Section 34.]

Rule25 Submission of Memorandum of Appeal

The forms of appeal prescribed in Rules 23 and 24 and the forms of verification appended thereto shall be signed

(a) in the case of an individual by the individual himself;

(b) in the case of a Hindu undivided family Marumakka-ttayam tarwad or Aliyasanthana family, by the manager of the family or the Kamavan of the tarwad;

(c) in the case of a Company, by the principal officer of the company;

(d) in case of a firm, by a partner of the firm; and

(e) in the case of any other association of individuals, by a member of the association duly authorised in that behalf.

Rule26 Manner of submission of memorandum of appeal

Every appeal under Sections 32 and 34 shall be duly stamped and shall be presented by the appellant in person or through a duly authorised representative specified in Section 57, 11. Inserted hy Notification No. RD 13 A1X 58, dated 5-6-1958. [together with a copy of the order appealed against] to the Appellate Authority concerned or to be sent to him by registered post.

Rule27 Revision petition to High Court

22. Rule 27 substituted by GSR 274, dated 10-8-1964. .

(1) Every petition under sub-section (1) of Section 55 to the High Court shall be in Form 2b and shall be verified in the manner specified therein. It shall be accompanied by a certified copy of the order of the Appellate Tribunal or the Commissioner, as the case may be.

(2) Every application for review under clause (a) of sub-section (7) of Section 55 shall be in Form 26-A and shall be verified in the manner specified therein. It shall be accompanied by a copy of the order ot the High Court sought to be reviewed.]

CHAPTER 4 REFUNDS

Rule28 Application for refund under Section 45

(1) An application for refund under Section 45 shall be in Form 22, and may be presented by the applicant to the 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5. w e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] in person or through a duly authorised representative or may be sent by registered post.

(2) An application preferred under Section 45 shall be accompanied by a return of total agricultural income in the form prescribed under Section 18 unless the applicant has already made such a return to the 44. Substituted for the words "tor growing coffee" by GSR No. 148, dated 13-7-1988. w.e.f.15-7-1988. [Assistant Commissioner of Agricultural Income-tax:]

Provided that no refund is admissible in respect of a claim on income not subject to assessment under the Act.

Rule29 Extent of amount to be refunded in case of double taxation

Where the agricultural income of a person is subjected to double taxation in the same year under the provisions of the Act, he shall be entitled to a refund of the amount which has been paid in excess of the amount with which such person is chargeable under the Act in that year.

Rule30 Hearing of reference application by the Commissioner

11. Rule 30 omitted by GSR 274, dated 10-8-1964. . [x x x x x.]

Rule31 Appellate Authority for purposes of proviso to Section 57(2)

The authority, to which an appeal against the direction of the Commissioner under clause (b) of the proviso to sub-section (2) of Section 57, may be made, shall be the State Government.

Rule32 Application for composition of Agricultural Income Tax

22. Rule 32 inserted by GSR 160, dated 9-6-1986, w.e.f. 11-6-1986. .

(1) For the purpose of sub-section (1) of Section 66, the prescribed officer shall be the 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5. w e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] of the area in which the land held by the assessee used 44. Substituted for the words "tor growing coffee" by GSR No. 148, dated 13-7-1988. w.e.f.15-7-1988. [for growing plantation crops] either exclusively or interplanted with Banana, Coconut, Cardamom, Pepper or Orange is situated from which the greater part of his agricultural income is derived.

(2) The application under Section 66 shall be made in Form 23. The application shall be made before the expiry of the time allowed under sub-section (1) of Section 18 for furnishing the return of income for the assessment year for which permission to compound the agricultural income tax is required:

55. Substituted by GSR 148, dated 13-7-1988, w.e.f. 15-7-1988. [Provided that in respect of the assessment years commehcing from 1st April, 1985 and 1st April, 1986, the application for the relevant assessment year may be made within thirty days from the commencement of the Karnataka Agricultural Income Tax (Amendment) Rules, 1987.]

66. Inserted by GSR 176, dated 20-7-1988, w.e.t. 22-7-1988. [(2-A) Notwithstanding anything contained in sub-rule (2) the assessing authority may, in respect of the assessment year commencing from the first day of April, 1985 and the subsequent assessment years, entertain an application made by any person beyond the period specified in that sub-rule, if the extent of land held by such person docs not exceed fifteen acres.]

11. Sub-rule (2-A) inserted by GSR 89, dated 26-5-1994 and shall be deemed to have come into force w.e.f. 1-4-1994

[(2-A) (i) The application referred to in sub-rule (2) shall be accompanied by satisfactory proof of payment of the amount payable under Section 66 on the extent of land mentioned in the application made in Form 23.

(ii) If the amount sent by an assessee along with the application is less than the amount of tax payable by him, the Assessing Authority shall serve upon the assessee a notice in Form 10-A and the assessee shall pay the sum demanded within the time specified in the notice.]

(3) The 22. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax], shall, as soon as possible after the receipt of an application under sub-rule (1) make such enquiry as he deems fit to satisfy himself about the correctness of the particulars furnished in the application and if the particulars are correct, he shall pass orders in writing granting the permission. If the particulars furnished in the application are not correct, the 33. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] shall require the applicant to furnish the correct particulars within such time as may be specified by him. If the correct particulars are furnished by the applicant within the time so specified, the 44. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] shall pass orders in writing granting the permission, and if the correct particulars are not furnished within the said time he shall pass orders in writing refusing the grant of permission indicating the reasons for such refusal.]

Rule33 Special deductions or allowance on new cultivation, etc.

55. Rule 33 omitted by GSR 274, dated 10-8-1964. [XXXX]

Rule34 Refund payment order

(a) For the purpose of clause (i) of sub-section (2) of Section 63, the 66. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] shall be the authority by whom refunds of tax collected shall be made in all cases under the provisions of the Act. Such refund order shall be in Form 24.

Rule35 Certificate by Company under Section 16

The certificate to be furnished by the principal officer of a company under Section 16 shall be in Form 25.

Rule36 Collection of information for assessment of tax

The 11. Substituted for the expression "Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993. [Assistant Commissioner of Agricultural Income-tax] or any person deputed by him on his behalf may inspect the land of the assessee and collect information relevant to assessment proceedings under the Act and record the particulars, in Form 27, in triplicate, and where the assessee or his representative is available in his presence.

Rule36A Collection of information for composition of tax

22. Rule 36-A omitted by GSR 267, dated 13-1-1984, w.e.f. 13-1-984. . [x x x x x.]

Rule37 Manner of service of notice on non-resident person

The notice under sub-section (3) of Section 14 shall be served in the manner laid down in Section 60.

 Rule37A Form of summons

33. Rule 37-A inserted by GSR 89, dated 8-6-1982 and GSR 181, dated 18-9-1982 . The summons requiring the attendance of any person or the production of any document for the purposes of Section 38 of the Karnataka Agricultural Income-tax Act, 1957, shall be in Form 28-B.1

Rule37B Manner of payment of tax etc

44. Rule 38 renumbered as Rule 37-B by Notification No. FD 29 CAX 97, dated 25-9-1997 and shall be deemed to have come into force w.e.f 1-4-1997

(1) The tax or any other amount payable by any person under the Act shall be paid:

(i) by a crossed cheque, crossed demand draft or Indian Postal Order in favour of the Assessing Authority; or

(ii) in a Government Treasury by challans specified in Appendix I-A in the case of tax payable in advance under sub-section (2-A) of Section 18 and by challans specified in Appendix-I, in other cases.

(2) Blank challan forms may be obtained from any Treasury or from the Office of the Assessing Authority.

(3) Payment by cheque under sub-rule (1) shall be subject to the provisions of the Karnataka Financial Code.]

CHAPTER 5 Procedure for recovery of tax General Provisions

Rule37C Definitions

In this part, unless the context otherwise requires.

(a) "certificate" means a certificate received by the Tax Recovery Officer under Rule 37-D;

(b) "defaulter" means the assessee of any other person mentioned in the certificate;

(c) "execution" in relation to a certificate, means recovery of arrears in pursuance of the certificate;

(d) "movable property" includes growing crops; and

(e) "share in a corporation" includes stock, debentures or bonds;

(f) "Tax Recovery Officer" means the Assistant Commissioner of Agricultural Income-tax or any other officer exercising powers under clause (aa) of sub-section (2) of Section 42 or under clause (aa) of sub-section (3) of Section 13 of the Karnataka Sales Tax Act, 1957.

Rule37D Issue of certificate

(1) Where an assessee or any other person is in default or is deemed to be in default in making a payment of tax or any other amount due under the Act, the Assistant Commissioner of Agricultural Income-tax may forward to the Tax Recovery Officer a certificate in Form 40 under his signature specifying the amount due from the assessee or any other person and the Tax Recovery Officer on receipt of such certificate, shall proceed to recover from such assessee or any other person the amount specified therein in accordance with the provision in this part.

(2) The Assistant Commissioner of Agricultural Income-tax may issue a certificate under sub-rule (1) notwithstanding that proceedings for recovery of the amount by any other mode has been taken.

Rule37E Issue of notice

When a certificate has been received by the Tax Recovery Officer from the Assistant Commissioner of Agricultural Income-tax for the recovery of arrears, the Tax Recovery Officer shall cause to be served upon the defaulter a notice in Form 41 requiring the defaulter to pay the amount specified in the certificate within fifteen days from the date of service of the notice and intimating that in default, steps would be taken to realise the amount under this part.

Rule37F When certificate may be executed

No step in execution of a certificate shall be taken until the period of fifteen days has elapsed since the date of the service of the notice required by the preceding rule:

Provided that, if the Tax Recovery Officer is satisfied that the defaulter is likely to conceal, remove or dispose of the whole or any part of such of his movable property as would be liable to attachment or distraint in execution of a decree of a Civil Court and that the realisation of the amount of the certificate would in consequence be delayed or obstructed, he may at any time for reasons to be recorded in writing, attach or distraint the whole or any part of such property:

Provided further that, if the defaulter whose property has been so attached or distrained furnishes security to the satisfaction of the Tax Recovery Officer, such attachment or distraint shall be cancelled from the date on which such security is accepted by the Tax Recovery Officer.

Rule37G Mode of recovery

If the amount mentioned in the notice is not paid within the time specified therein or within such further time as the Tax Recovery Officer may grant in his discretion, the Tax Recovery Officer shall proceed to realise the amount by one or more of the following modes.

(a) by attachment or distraint and sale of the defaulter's movable property;

(b) by attachment and sale of the defaulter's immovable property.

Rule37H Interest, costs and charges recoverable

There shall be recoverable in the proceedings in execution of every certificate.

(a) interest at the rate of seven per cent per annum from the day commencing after the end of the period specified in Rule 37-E;

(b) all charges incurred in respect of.

(i)the service of notice upon the defaulter to pay the arrears, and/or warrants and other processes, and

(ii)all other proceedings taken for realising the arrears.

Rule37I Purchaser's title

(1) Where property is sold in execution of a certificate, there shall vest in the purchaser merely the right, title and interest of the defaulter at the time of the sale, even though the property itself be specified.

(2) Where immovable property is sold in execution of a certificate, and such sale has become absolute, the purchaser's right, title and interest shall be deemed to have vested in him from the time when the property is sold and not from the time when the sale becomes absolute.

Rule37J Suit against purchaser not maintainable on ground of purchase being made on behalf of plaintiff

(1) No suit shall be maintained against any person claiming title under a purchase certified by the Tax Recovery Officer in the manner laid down in this part on the ground that the purchase was made on behalf of the plaintiff or on behalf of someone through whom the plaintiff claims.

(2) Nothing in this rule shall bar a suit to obtain a declaration that the name of any purchaser certified as aforesaid was inserted in the certificate fraudulently or without the consent of the real purchaser, or interfere with the right of a third person's to proceed against that property, though ostensibly sold to the certified purchaser, on the ground that it is liable to satisfy a claim of such third person's against the real owner.

Rule37O Not printed

Rule37P Removal of attachment or distraint on satisfaction or cancellation of certificate

(a) the amount due, with costs and all charges and expenses resulting from attachment or distraint of any property or incurred in order to hold a sale, are paid to the Tax Recovery Officer; or

(b) the certificate is cancelled, the attachment or distraint shall be deemed to be withdrawn and in the case of immovable property, the withdrawal shall, if the defaulter so desires, be proclaimed at his expense, and a copy of the proclamation shall be affixed in the manner provided by this Part for a proclamation of sale of immovable property.

Rule37Q Officer entitled to attach, distraint and sell

The attachment or distraint and sale of movable property and the attachment and sale of immovable property shall be made by the Tax Recovery Officer.

Rule37R Defaulting purchaser answerable for loss on resale

Any deficiency of price which may happen on a resale by reason of the purchaser's default, and all expenses attending such resale, shall be certified by the Tax Recovery Officer and shall, at the instance of either the Assistant Commissioner of Agricultural Income-tax or the defaulter, be recoverable from the defaulting purchaser under the procedure provided by this Part:

Provided that no such application shall be entertained unless filed within fifteen days from the date of resale.

Rule37S Adjournment or stoppage of sale

(1) The Tax Recovery Officer may, in his discretion, adjourn any sale hereunder to a specified day and hour.

(2) Where a sale of immovable property is adjourned under sub-rule (1) for a longer period than one calendar month, a fresh proclamation of the sale under this Part shall be made unless the defaulter consents to waive it.

(3) Every sale shall be stopped if, before the lot is knocked down, the arrears and costs (including the costs of the sale) are tendered to the Tax Recovery Officer.

Rule37T Private alienation to be void to certain cases

(1) Where a notice has been served on a defaulter under Rule 37-E, the defaulter or his representative in interest shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging to him except with the permission of the Tax Recovery Officer, nor shall any Civil Court issue any process against such property in execution of a decree for the payment of money.

(2) Where an attachment has been made under this Part, any private transfer or delivery of the property attached or of any interest therein and any payment to the defaulter of any debt, dividend or other moneys contrary to such attachment, shall be void as against all claims enforceable under the attachment.

Rule37U Prohibition against bidding or purchase by officer

No officer or other person having any duty to perform in connection with any sale under this Part shall, either directly or indirectly bid for, acquire or attempt to acquire any interest in the property sold.

Rule37V Prohibition against sale on holidays

No sale under this Part shall take place on a Sunday or other general holidays recognised by the State Government or any day which has been notified by the State Government to be a local holiday for the area in which the sale is to take place.

Rule37W Assistance by police

The Tax Recovery Officer may apply to the officer-in-charge of the nearest police station for such assistance as may be necessary in the discharge of his duties, and the authority to whom such application is made shall depute a sufficient number of Police Officers for furnishing such assistance.

Rule37X Warrant

When any movable property is to be attached or distrained, the Tax Recovery Officer shall prepare a warrant under his signature in Form 42 specifying the name of the defaulter and the amount to be realised and cause a copy of the warrant to be served on the defaulter.

Rule37Y Attachment

If, after service of the copy of the warrant, the amount is not paid forthwith, the Tax Recovery Officer shall proceed to attach or distrain the movable property of the defaulter.

37Y Attachment

If, after service of the copy of the warrant, the amount is not paid forthwith, the Tax Recovery Officer shall proceed to attach or distrain the movable property of the defaulter.

Rule37Z Property in defaulter's possession

Where the property proceeded against is movable property (other than agricultural produce) in the possession of the defaulter, it shall be distrained by actual seizure, and the officer shall keep the property in his own custody or the custody of one of his subordinates and shall be responsible for due custody thereof:

Provided that when the property seized is subject to speedy and natural decay or when the expense of keeping it in custody is likely to exceed its value, the officer may sell it at once.

Rule37AA Agricultural produce

Where the property proceeded against is agricultural produce, it shall be attached by affixing a copy of the warrant.

(a) where such produce is growing crop-on the land on which such crop has grown; or

(b) where such produce has been cut or gathered on threshing floor or place for treading out grain or the like, or fodder stack, on or in which it is deposited, and another copy on the outer door or on some other conspicuous part of the house in which the defaulter ordinarily resides, or on some other conspicuous part of the house in which he carries on business or personally works for gain, or in which he is known to have last resided or carried on business or personally worked for gain. The produce shall, thereupon, be deemed to have passed into the possession of the Tax Recovery Officer.

Rule37AB Provision as to agricultural produce under attachment

(1) Where agricultural produce is distrained, the Tax Recovery Officer shall make such arrangements for the custody, watching, tending, cutting and gathering thereof as he may, deem sufficient; and the Assistant Commissioner of Agricultural Income-tax, shall bear such amount as the Tax Recovery Officer shall require in order to defray the cost of such arrangements.

(2) Subject to such conditions as may be imposed by the Tax Recovery Officer in this behalf, either in the order of attachment or in any subsequent order, the defaulter may tend, cut, gather and store the produce and do any other act necessary for manuring or preserving it and, if the defaulter fails to do all or any such acts, any person appointed by the Tax Recovery Officer in this behalf may, subject to the like conditions, do all or any of such acts, and the costs incurred by such person shall be recoverable from the defaulter as if they were included in the certificate.

(3) Agricultural produce attached as a growing crop shall not be deemed to have ceased to be under attachment or to require reattachment merely because it has been severed from the soil.

(4) Where an order for the attachment of a growing crop has been made at a considerable time before the crop is likely to be fit to be cut or gathered, the Tax Recovery Officer may suspend the execution of the order for such time as he thinks fit, and may, in his discretion, make a further order prohibiting the removal of the crop pending execution of the order of attachment.

(5) A growing crop which from its nature does not admit of being stored shall not be attached under this rule at any time less than twenty days before the time at which it is likely to be fit to be cut or gathered.

Rule37AC Debts and Shares, etc

(1) In the case of.

(a) a debt not secured by a negotiable instrument;

(b) a share in a corporation; or

(c) other movable property not in the possession of the defaulter except property deposited in, or in the custody of, any Court, it shall be attached and the attachment shall be made by a written order in Form 43 prohibiting.

(i) in the case of a debt, the creditor from recovering the debt and the debtor from making payment thereof until the further order of the Tax Recovery Officer;

(ii) in the case of a share, the person in whose name the share may be standing from transferring the same or receiving any dividend thereon;

(iii) in the case of any other movable property (except as aforesaid), the person in possession of the same from giving it over to the defaulter.

(2) A copy of such order shall be affixed on some conspicuous part of the office of the Tax Recovery Officer and another copy shall be sent in the case of the debt, to the debtor, in the case of the share, to the proper officer of the corporation and in the case of the other movable property (except as aforesaid), to the person in possession of the same.

(3) A debtor prohibited under clause (i) of sub-rule (1) may pay the amount of his debt to the Tax Recovery Officer and such payment shall discharge him as effectually as payment to the party entitled to receive the same.

Rule37AD Attachment of decrees

(1) Where the property proceeded against is a decree of a Civil Court for the payment of money or for sale in enforcement of a mortgage or charge it shall be attached and attachment shall be made by the issue to the Civil Court of a notice in Form 44 requesting the Civil Court to stay the execution of the decree unless and until.

(i) the Tax Recovery Officer cancels the notice; or

(ii) the Assistant Commissioner of Agricultural Income-tax or the defaulter applies to the Court receiving such notice to execute the decree.

(2) Where a Civil Court receives an application under clause (ii) of sub-rule (1), it shall, on the application of the Assistant Commissioner of Agricultural Income-tax or the defaulter and subject to the provisions of the Code of Civil Procedure, 1908 (5 of 1908), proceed to execute the attached decree, and apply the net proceeds in satisfaction of the certificate.

(3) The Assistant Commissioner of Agricultural Income-tax shall be deemed to be the representative of the holder of the attached decree, and to be entitled to execute such attached decree in any manner lawful for the holder thereof.

Rule37AE Share in movable property

Where the property proceeded against consists of the share or interest of the defaulter in movable property belonging to him and another as co-owner, it shall be attached and the attachment shall be made by a notice in Form 45 to the defaulter prohibiting him from transferring these share or interest or charging it in any way.

Rule37AF Attachment of negotiable instrument

Where the property is a negotiable instrument not deposited in a Court nor in the custody of a Public Officer, it shall be distrained by the Tax Recovery Officer.

Rule37AG Attachment of property in custody of Courts or Public Officer

Where the property proceeded against is in the custody of any Court or Public Officer, it shall be attached and the attachment shall be made by a notice in Form 46 to such Court or Officer, requesting that such property, and any interest or dividend becoming payable thereon, may be held subject to the further orders of the Tax Recovery Officer by whom the notice is issued: Provided that, where such property is in the custody of a Court, any question of title or priority arising between the Assessing Authority and any other person, not being the defaulter, claiming to be interested in such property by virtue of any assignment, attachment or otherwise shall be determined by such Court.

Rule37AH Attachment of partnership property

(1) Where the property proceeded against consists of an interest of defaulter being a partner, in the partnership property, the Tax Recovery Officer may make an order charging the share of such partner in the partnership property and profits with payment of the amount due under the certificate, and may, by the same or subsequent order, appoint a receiver of the share of such partner in the profits, whether already declared or accruing and of any other money which may become due to him in respect of the partnership, and direct accounts and enquiries and make an order for the sale of such interest or such other order as the circumstances of the case may require.

(2) The other persons shall be at liberty at any time to redeem the interest charged or, in the case of a sale being directed, to purchase the same.

Rule37AI Value of property

In the case of distraint, the seizure shall not be excessive, that is to say, the property seized shall be as nearly as possible proportionate to the amount specified in the warrant.

Rule37AJ Inventory

In the case of distraint of movable property by actual seizure, the Tax Recovery Officer shall, after seizure of the property, prepare an inventory of all the property attached, specifying in it the place where it is lodged or kept, and a copy of the inventory shall be delivered to the defaulter.

Rule37AK Seizure between sunrise and sunset

Attachment by seizure shall be made after sunrise and before sunset and not otherwise.

Rule37AL Power to break open door, etc

The Tax Recovery Officer may break open any inner or outer door of any building and enter any building in order to seize any movable property if he has reasonable grounds to believe that such building contains movable property liable to seizure under the warrant and he has notified his authority and intention of breaking open if admission is not given. He shall however, give all reasonable opportunity to women to withdraw.

Rule37AM Sale

The Tax Recovery Officer may direct that any movable property attached or distrained under this Part or such portion thereof as may seem necessary to satisfy the certificate shall be sold.

Rule37AN Issue of proclamation

When any sale of movable property is ordered by the Tax Recovery Officer, the Tax Recovery Officer shall issue a proclamation in Form 47 in the language of the district, of the intended sale, specifying the time and place of sale and whether the sale is subject to confirmation or not.

Rule37AO Not printed

(1) Such proclamation shall be made by beat of drum or other customary mode.

(a) in the case of property distrained.

(i) in the village in which the property was seized or if the property was seized in a town or city, then in the locality in which it was seized; and

(ii)at such other places as the Tax Recovery Officer may direct;

(b) in the case of property attached otherwise than distraint in such places, if any, as the Tax Recovery Officer may direct.

(2) A copy of the proclamation shall also be affixed in a conspicuous part of the office of the Tax Recovery Officer.

Rule37AP Proclamation how made

(1) Such proclamation shall be made by beat of drum or other customary mode.

(a) in the case of property distrained.

(i) in the village in which the property was seized or if the property was seized in a town or city, then in the locality in which it was seized; and

(ii)at such other places as the Tax Recovery Officer may direct;

(b) in the case of property attached otherwise than distraint in such places, if any, as the Tax Recovery Officer may direct.

(2) A copy of the proclamation shall also be affixed in a conspicuous part of the office of the Tax Recovery Officer.

Rule37AQ Sale after fifteen days

Except where the property is subject to speedy and natural decay or when the expense of keeping it in custody is likely to exceed its value, no sale of movable property under this Part shall, without the consent in writing of the defaulter, take place until after the expiry of at least fifteen days calculated from the date on which a copy of the sale proclamation was affixed in the office of the Tax Recovery Officer.

Rule37AR Sale of agricultural produce

(1) Where the property to be sold is agricultural produce, the sale shall be held.

(a) if such produce is a growing crop on or near the land on which such crop has grown; or

(b) if such produce has been cut or gathered at or near the threshing floor or place of treading out grain or like, or fodder stack, on or in which it is deposited:

Provided that the Tax Recovery Officer may direct that the sale to be held at the nearest place of public resort, if he is of opinion that the produce is thereby likely to sell to greater advantage.

(2) Where, on the produce being put up for sale.

(a) a fair price, in the estimation of the Tax Recovery Officer is not offered for it; and

(b) the owner of the produce, or a person authorised to act on his behalf, applies to have the sale postponed till the next day or, if a market is held at the place of sale, the next market day, the sale shall be postponed accordingly, and shall be then completed, whatever price may be offered for the produce.

Rule37AS Special provisions relating to growing crops

(1) Where the property to be sold is a growing crop and the crop from its nature admits of being stored but has not yet been stored, the day of the sale shall be so fixed as to admit of the crop being made ready for storing before the arrival of such day, and the sale shall not be held until the crop has been cut or gathered and is ready for storing.

(2) Where the crop from its nature does not admit of being stored or can be sold to a greater advantage in an unripe stage (e.g., as green wheat), it may be sold before it is cut and gathered, and the purchaser shall be entitled to enter on the land, and to do all that is necessary for the purpose of tending or cutting or gathering the crop.

Rule37AT Sale to be by auction

The property shall be sold by public auction in one or more lots as the Tax Recovery Officer may consider advisable and if the amount to be realised by sale is satisfied by the sale of a portion of the property the sale shall be immediately stopped with respect to the remainder of the lots.

Rule37AU Sale by public auction

(1) Where movable property is sold by public auction, the price of each lot shall be paid at the time of sale or as soon as after the Tax Recovery Officer directs and in default of payment, the property shall forthwith be resold.

(2) On payment of the purchase money, the Tax Recovery Officer shall grant a certificate specifying the property purchased, the price paid and the name of the purchaser and the sale shall become absolute.

(3) Where the movable property to be sold is a share in goods belonging to the defaulter and a co-owner, and two or more persons, of whom one is such co-owner, respectively bid the same sum for such property or for any lot, the bidding shall be deemed to be the bidding of the co-owner.

Rule37AV Irregularity not to vitiate sale, but any person injured may sue

No irregularity in publishing or conducting the sale of movable property shall vitiate the sale, but any person sustaining substantial injury by reason of such irregularity at the hands of any other person may institute a suit in a Civil Court against him for compensation, or (if such other person is the purchaser) for the recovery of the specific property and for compensation in default of such recovery.

Rule37AW Negotiable instruments and shares in a Corporation

Notwithstanding anything contained in this Part, where the property to be sold is a negotiable instrument or a share in a Corporation the Tax Recovery Officer may, instead of selling it by public auction, sell such instrument or share through a broker.

Rule37AX Order for payment of coin or currency notes to the Tax Recovery Officer

Where the property attached or distrained is currency coin or currency notes, the Tax Recovery Officer may, at any time during the continuance of the attachment or distraint direct that such coin or notes, or a part thereof sufficient to satisfy the certificate, be paid over to the Assistant Commissioner of Agricultural Income-tax. Attachment and sale of immovable property

Rule37AY Attachment

Attachment of the immovable property of the defaulter shall be made by an order in Form 48 prohibiting the defaulter from transferring or charging the property in any way and prohibiting all persons from taking any benefit under such transfer or charge.

Rule37AZ Service of notice of attachment

A copy of the order of attachment shall be served on the defaulter.

Rule37BA Proclamation of attachment

The order of attachment shall be proclaimed at some place on or adjacent to the property attached by beat of drum or other customary mode and a copy of the order shall be affixed on a conspicuous part of the property and on the Notice Board of the Office of the Tax Recovery Officer.

Rule37BB Attachment to relate back from the date of service of notice

Where any immovable property is attached under this Part, the attachment shall relate back to, and take effect from, the date on which the notice to pay the arrears, issued under this Part, was served upon the defaulter.

Rule37BC Sale and proclamation of sale

(1) The Tax Recovery Officer may direct that any immovable property which has been attached or such portion thereof as may seem necessary to satisfy the certificate, shall be sold.

(2) Where any immovable property is ordered to be sold, the Tax Recovery Officer shall cause a proclamation in Form 47 of the intended sale to be made in the language of the district.

Rule37BD Contents of proclamation

A proclamation of sale of immovable property shall be drawn after notice to the defaulter, and shall state the time and place of sale and shall specify, as fairly and accurately as possible.

(a) the property to be sold;

(b) the revenue, if any, assessed upon the property or any part thereof;

(c) the amount for the recovery of which the sale is ordered; and

(d) any other thing which the Tax Recovery Officer considers it material for a purchaser to know, in order to judge the nature and value of property.

Rule37BE Mode of making proclamation

(1) Every proclamation for the sale of immovable property shall be made at some place on or near such property by beat of drum or other customary mode, and a copy of proclamation shall be affixed on a conspicuous part of the property and also upon a conspicuous part of the office of the Tax Recovery Officer.

(2) Where the Tax Recovery Officer so directs, such proclamation shall also be published in the Official Gazette or in a local newspaper, or in both and the cost of such publication shall be deemed to be costs of the sale.

(3) Where the property is divided into lots for the purpose of being sold separately, it shall not be necessary to make a separate proclamation for each lot, unless proper notice of the sale cannot, in the opinion of the Tax Recovery Officer, otherwise be given.

Rule37BF Time of sale

No sale of immovable property under this Schedule shall, without the consent in writing of the defaulter, take place until after the expiration of at least thirty days calculated from the date on which a copy of the proclamation of sale has been affixed on the property or in the office of the Tax Recovery Officer, whichever is later.

Rule37BG Sale to be by auction

The sale shall be by public auction to the highest bidder and shall be subject to confirmation by the Tax Recovery Officer

Rule37BH Deposit by purchaser and resale in default

(1) On every sale of immovable property, the person declared to be the purchaser shall pay, immediately after such declaration, a deposit of twenty-five per cent of the amount of his purchase money, to the Tax Recovery Officer and in default of such deposit, the property shall forthwith be resold.

(2) The full amount of purchase money payable shall be paid by the purchaser to the Tax Recovery Officer on or before the fifteenth day from the date of the sale of the property.

Rule37BI Procedure in default of payment

In default of payment within the period mentioned in the preceding rule, the deposit may, if the Tax Recovery Officer thinks fit, after defraying the expenses of the sale, be forfeited to the Government and the property shall be resold and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may subsequently be sold.

Rule37BJ Authority to bid

All persons bidding at the sale shall be required to declare if they are bidding on their own behalf or on behalf of their principals. In the latter case, they shall be required to deposit their authority, and in default their bids shall be rejected.

Rule37BK Application to set aside sale of immovable property on deposit

(1) Where immovable property has been sold in execution of a certificate, the defaulter, or any person whose interests are affected by the sale, may at any time within thirty days from the date of the sale, apply to the Tax Recovery Officer to set aside the sale, on his depositing.

(a) for payment to the Assistant Commissioner of Agricultural Income-tax, the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, with interest thereon at the rate of six per cent per annum calculated from the date of the proclamation of sale to the date when the deposit is made; and

(b) for payment to the purchaser, as penalty, a sum equal to five per cent of the purchase money but not less than one rupee.

(2) Where a person makes an application under Rule 37-BL for setting aside the sale of his immovable property, he shall not, unless he withdraws application, be entitled to make or prosecute an application under this rule.

Rule37BL Application to set aside sale of immovable property on ground of non-service of notice or irregularity

Where immoveable property has been sold in execution of a certificate, the Assistant Commissioner of Agricultural Income-tax the defaulter, or any person whose interests are affected by the sale, may, at any time within thirty days from the date of the sale, apply to the Tax Recovery Officer to set aside the sale of the immovable property on the ground that notice was not served on the defaulter to pay the arrears as required by this Part or on the ground of a material irregularity in publishing or conducting the sale:

Provided that.

(a) no sale shall be set aside on any such ground unless the Tax Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of the non-service or irregularity; and

(b) an application made by a defaulter under this rule shall be disallowed unless the applicant deposits the amount recoverable from him in execution of the certificate.

Rule37BM Setting aside sale where defaulter has no saleable interest

At any time within thirty days of the sale, the purchaser may apply to the Tax Recovery Officer to set aside the sale on the ground that the defaulter had no saleable interest in the property sold.

Rule37BN Confirmation of sale

(1) Where no application is made for setting aside the sale under the foregoing rules or where such an application is made and disallowed by the Tax Recovery Officer, the Tax Recovery Officer shall (if the full amount of the purchase money has been paid) make an order confirming the sale and thereupon the sale shall become absolute.

(2) Where such application is made and allowed and where, in the case of an application made to set aside the sale on deposit of the amount and penalty and charges, the deposit is made within thirty days from the date of the sale, the Tax Recovery Officer shall make an order setting aside the sale:

Provided that no order shall be made unless notice of the application has been given to the person affected thereby.

Rule37BO Return of purchase money in certain cases

When a sale of immovable property is set aside, any money paid or deposited by the purchaser on account of the purchase, together with the penalty, if any, deposited for payment to the purchaser, and such interest as the Tax Recovery Officer may allow, shall be paid to the purchaser.

Rule37BP Sale certificate

(1) Where a sale of immovable property has become absolute, the Tax Recovery Officer shall grant a certificate in Form 49 specifying the property sold, and the name of the person who at the time of sale is declared to be the purchaser.

(2) Such certificate shall state the date on which the sale became absolute.

Rule37BQ Postponement of sale to enable defaulter to raise amount due under certificate

(1) Where an order for the sale of immovable property has been made, if the defaulter can satisfy the Tax Recovery Officer that there is reason to believe that the amount of the certificate may be raised by the mortgage or lease or private sale of such property, or some part thereof, or of any other immovable property of the defaulter, the Tax Recovery Officer may, on his application, postpone the sale of the property comprised in the order for sale, on such terms and for such period as he thinks proper, to enable him to raise the amount.

(2) In such case, the Tax Recovery Officer shall grant a certificate to the defaulter, authorising him, within a period to be mentioned therein, and notwithstanding anything contained in this part, to make the proposed mortgage, lease or sale:

Provided that all moneys payable under such mortgage, lease or sale shall be paid, not to the defaulter, but to the Tax Recovery Officer:

Provided also that no mortgage, lease or sale under this rule shall become absolute until it has been confirmed by the Tax Recovery Officer.

Rule37BR Fresh proclamation before resale

Every resale of immovable property, in default of payment of the purchase money within the period allowed for such payment, shall be made after the issue of a fresh proclamation in the manner and for the period hereinbefore provided for the sale.

Rule37BS Bid of co-sharer to have preference

When the property sold is a share of undivided immovable property and two or more persons, of whom one is a co-sharer, respectively bid the same sum of such property or for any lot, the bid shall be deemed to be the bid of the co-sharer.

Rule37BT Power to take evidence

Every Tax Recovery Officer or other acting under this Part shall have the powers of Civil Court while trying a suit for the purpose of receiving evidence, administering oaths, enforcing the attendance of witness and compelling the production of documents.

Rule37BU Appeals

(1) An appeal from any original order passed by the Tax Recovery Officer under this Part not being an order which is conclusive, shall lie.

(a) in the case of a Tax Recovery Officer, being the Assistant Commissioner of Agricultural Income-tax to the authority to which appeals lie against the orders of the Assistant Commissioner of Agricultural Income-tax under Section 32; and

(b)in any other case, to the Assistant Commissioner of Agricultural Income-tax.

(2) Every appeal under this Rule must be presented within thirty days from the date of the order appealed against.

(3) Pending the decision of any appeal, execution of the certificate may be stayed if the Appellate Authority so directs, but not otherwise.

Rule37BV Review

Any order passed under this Part may, after notice to all persons interested be reviewed by the Officer who made the order, or by his successor-in-office, on account of any mistake apparent from the record.

Rule37BW Recovery from surety

Where any person has under this Part become surety for the amount due by the defaulter, he may be proceeded against under this Part as if he were the defaulter.

Rule37BX Saving regarding charge

Nothing in this Part shall affect any provision of the Act whereunder the tax is a first charge upon any asset.]

APPENDIX 1 Return under Section 16 of the Karnataka Agricultural Income-tax Act, 1957

APPENDIX I

(See Rule 38(1)(ii))

GIR No. 19 . .19. . .

GOVERNMENT OF KARNATAKA

Under the Karnataka Agricultural

Income-tax Rules, 1957

Under the Karnataka Agricultural Incom-tax

Rules, 1957

Under the Karnataka Agricultural Income-tax Rules, 1957

ORIGINAL (to be returned to the Agricultural Income-tax Officer by the treasury)

FOR USE IN THE TREASURY (DUPLICATE) Date:

(TRIPLICATE RECEIPT (to be given to the Remitter)

DUPLICATE (to be retained in the Treasury)

1. Number of challan .........

Treasury

2. Number of entry in Agricultural

Income-Tax Receipt Register .........

Sub-Treasury

022 Taxes on Agricultural Income

Treasury Officer

Agricultural Income-tax

3. Date of entry in Agricultural Income-tax receipt

Invoice of tax paid into .....

Register

Treasury/Sub-treasury.

Sub-Treasury Officer

Name and Address of assessee

Amount

(to be entered in words as well as in figures)

Treasury Accountant Treasury Treasury

Officer Treasury Stamp

Received the sum of Rs. .......... (in figures)

Rupees ..................... (in words) on

account of Agricultural Income-tax

Income-Tax..... for Miscellaneous 19. . 19. . .

due from Sri/Smt. Messrs.

Date.....the .... 19 ... Certified that N.B. Please give name and address clearly in

the amount of tax entered in column 2 above block letters in the space provided hereunder..

is correct.

Agricultural Income-tax Clerk.Name:

Receive and grant receiptAddress:..Treasury

Agricultural Income-tax Officer

Agricultural Income-tax Officer Stamp.

Received payment

Treasury Officer

(Seal)

CLASSIFICATION

Agricultural Income-Tax Rs. P,

(1) Other Collections:

(To be prepared in duplicate)

(Original to be returned to the Agricultural Income-Tax Officer)

Remittance by Smt .............

Total ______________

CLASSIFICATION

022 Taxes on Agricultural Income.

Rs. P.

Agricultural Income-Tax

(1) Other collections

Total

022 Taxes on Agricultural Income

APPENDIX 2 Notice under Sections 18(2) and 39(1) of the Karnataka Agricultural Income-tax Act, 1957

APPENDIX II

Conditions for maintaining a Provident [ x x x x] Fund for the

purpose of Karnataka Agricultural Income-tax

Act, 1957

1. For the purpose of sub-rule (h) of Rule 5 in order that a Provident [ x x x x] Fund may receive and retain its recognition it should satisfy the conditions set out below and any other condition the State Government may by rule prescribe from time to time.

2. Certain words and phrases appearing in the conditions noted below shall have the following meanings:

(a) "accumulated balance due to an employee" means the balance to his credit or such portion thereof as may be claimed by him under the regulations of the fund on the day he ceases to be an employee of the employer maintaining the fund;

(b) "Annual accretion to the balance to the credits of an employee" means the increase to such balance in any year arising from contribution and interest;

(c) "balance to the credit of the employees" means the total amount to the credit of his individual account in a provident fund at any time;

(d) "contribution" means any sum credited by or on behalf of an employee out of his salary or by an employer out of his own moneys to the individual accounts of an employee but does not include any sum credited as interest;

[(e) "employee" means a person engaged or employed for rendering service as a manual labourer.]

(f) "employer" means an individual, Hindu Undivided Family, firm, association of persons or a Company whose income is chargeable to income tax under Section 3 of the Act;

(g) "Recognised Provident Fund" means a Provident Fund which has been recognised by the Commissioner;

(h) "Regulations of a fund" means the Special body of regulations governing the constitution and administration of a particular Provident fund;

(i) "tax" means the agricultural income-tax payable under the Act.

3. (i) All employees shall be employed in the Karnataka State. The Commissioner may however, accord recognition to such funds as do not satisfy the above condition provided that, in allowing contributions by the employer to such funds in his assessment only so much of the amount as represents the contributions to the individual accounts of such employees who are employed in the Kamataka State shall be permissible.

(ii) The contributions of an employee in any year shall be a definite proportion of his salary for that year and shall be deducted by the employer from the employee's salary in that proportion at intervals not exceeding one year payment of such salary and in that year credited to the employee's individual account in the fund.

(iii) The contribution of an employer to the individual account of an employee in any year shall not exceed the amount of contributions of the employed which shall be credited to the individual account of the employee at each periodical payment of salary.

(iv) The fund shall consist of contributions as above specified and of donations if any, received by the trustees of accumulations thereof and of interest (simple and compound) credited in respect of such contributions; donations and accumulations, and of securities purchased herewith, and of any capital gains arising from the sale, exchange or transfer of capital assets of the fund, and of no other sums.

(v) The fund shall be vested in two or more trustees or in the official trustees under a trust which shall not be revocable save with the consent of all beneficiaries.

(vi) The employer shall not be entitled to recover any sum whatsoever from the fund, save in cases where the employee is dismissed for misconduct or voluntarily leaves his employment otherwise than on account of ill-health or other unavoidable cause before the expiration of the term of services specified in this behalf, in the regulation of the fund.

In such cases, the recoveries made by the employer shall be limited to the contributions made by him to the individual account of the employees; and to interest (simple and compound) credited in respect of such contributions and accumulations thereof in accordance with the regulations of the fund. And where such recoveries are made, they will be treated as agricultural income of the employer of the year in which they are so recovered and will be assessed accordingly.

(vii) The accumulated balance due to an employee shall be payable on the day he ceases to be an employee of the employer maintaining the fund (unless at the request of the employee made in writing the trustees of the fund consent to retain the whole or any part of the accumulated balance due to the

employee in the fund to be drawn by him at any time on demand).

(viii) Save as provided in clause (vii) or in accordance with such conditions and restrictions as the State Government may, by rules prescribe, no portion of the balance to the credit of an employee shall be payable to him.

Where there is any repugnance between any regulations of a recognised provident fund and any of the foregoing provisions or the rules, made thereunder, the regulations shall, to the extent of repugnance, be, of no effect.

The Provident Fund which satisfies the foregoing conditions may apply for recognition to the Commissioner and if in his opinion the conditions prescribed for recognition in this respect are satisfied, he may accord recognition.

An order of recognition shall take effect on such date as the Commissioner may fix. If in the opinion of the Commissioner at any time the Provident Fund does not satisfy all these conditions, he may refuse to accord recognition or withdraw any such recognition that may have been granted already. The order withdrawing recognition will take effect from the date on which it has been made. There shall be no appeal against the order of the Commissioner refusing recognition to any fund, or withdrawing recognition of any fund.

APPENDIX 3 FORM

FORM

[See Rule 12(1)]

FORM 3

[See Rule 12(1)]

Form of return of total agricultural income for individuals, undivided Hindu Mithakshara family, undivided Marumakka-tayam tarwads possessing separate properties or other families to which the rule of impartibility applied, firms, companies, associations of individuals, whether incorporated or not and institutions capable of holding property.

Agricultural Income-tax Year 19 ... 19 ....

Name of assessee

Status

Address

Please state here whether the assessee is individual, undivided Hindu Mithakshara family, undivided Marumakkatayam tarwad or Tavazhi possessing separate properties, or other family to which the rule of impartibility applied, firms, companies, associations of individuals, whether incorporated or not and institutions capable of holding property.

PART I

Statements of total agricultural income during the previous year ended (See note 2).

 Source of income (see note 3) Amount of income, profits or gams Remarks 1. Agricultural income derived from rent or revenue (details shown in Part VI). 2. Agricultural income derived from agriculture (details shown in Part VII). 3. Income derived from any building owned and occupied by the receiver of rent or revenue of any land in the State used for agricultural purposes or occupied by the cultivator or receiver of rent in kind as specified in Section 2(a)(3). 4. Dividends from companies earning agricultural income and shares in agricultural income of firms, associations of individuals and institutions capable of holding property. 5. Other items TOTAL AGRICULTURAL INCOME

PART II

Statement of sums included in total Agricultural Income in respect of which Agricultural Income-tax is not payable.

 Sources of Income Amount Remarks 1. Sums which an assessee receives out of the agricultural income of a Hindu undivided family or Marumakkatayam tarwad if he receives such sum as a member of the family or tarwad and tax has already been levied on such agricultural income. 2. Sums paid (i) to effect to keep in force an insurance or a contract for a deferred annuity on the life of the assessee or on the life of the wife or husband of the assessee.(ii) to effect or to keep in force an insurance or a contract for a deferred annuity on the life of any male member of the undivided Hindu family or of the wife of such member. 3. Dividends from companies, share in the income of a firm or an association of individuals where the tax has already been paid or is payable on the income by the company, firm or association and sums received out of agricultural income in respect of which tax has been levied. 4. Donations to charitable institutions of Rs. 250 and above under Section 12(g) of the Act. TOTAL .............

PART III

Particulars required in respect of firms.

(a) To be completed in the case of firms only:

Name of each partner, Address , Extent of share including

interest on capital, salary, commission or other

remuneration, if any (give details)

To be completed in cases where the assessee is a partner in a firm or firms.

Name and Address of the firm Name of each partner including the assessee Address of each partner Share of each partner including interest on capital, salary, commission or other remuneration, if any (give details)

PART IV

To be filled up in the case of Hindu undivided family only. Name of Family: Address :

Name and address of Branch, place of agricultural income in the Karnataka State:

1.

2.

3.

4.

Sl. No. Name of Karta or Manager and other [x x x ] members of family How related to Karta Address 1. 2. 3. 4. 5. 6. Signature Designation. To be filled up by trustees, guardians or agents only. Names and addresses of persons for whom the assessee is the trustee, guardian or agent. Remarks (you may state herein whether you are a trustee, guardian or agent and the nature and date of the creation of the trust, guardianship or agency). Name Address

Dated....... Signature

Designation.

N.B.: Please state here whether the assessee is an individual, a Hindu undivided family, a firm, a company or any other association of individuals.

FORM 3(See Note 8)PART V DEPRECIATIONStatement of particulars to be furnished under clause (e) of Section 5 of the Karnataka Agricultural Income Tax Act, 1957, and of the amount of depreciation allowable. Description of buildings, machinery, plant, furniture, etc., or other capital assets. Written down value at the beginning of the accounting period(see Note 8) Capital expenditure during the year for additions, alterations, improvements and extensions Date from which the additions etc., referred to in Col. 3 are used for the purpose of agriculture Amount on which depreciation is not allowable Prescribed rate per cent Depreciation allowable Remarks (1) (2) (3) (4) (5) (6) (7) (8) Rs. Rs. Rs. Rs. Rs.

PART VIParticulars of Agricultural Income derived from Rent or Revenue Sl. No. Name of Village and taluk in which the land is situated Survey No. Area in acres Kind of crop Status of the aassessee (whether a landlord, of any other receiver of rent or revenue) (1) (2) (3) (4) (5) (6) Gross annual income in kind Quantity Value in cash Total Admissible expenditure Net difference between columns 10 and 11 Depreciation allowance Difference between columns 12 and 13 (7) (8) (9) (10) (11) (12) (13) (14) Rs. Rs. Rs. Rs. Rs. Rs. Rs.

PART VIIParticulars of Income derived from Agriculture for the year 19 ..... Sl. No. Name of Village and taluk in which the land is situated Survey No. Area in acres Kind of crop Status of the assessee (whether a landlord owner mortgagee in possession, lessee or any other cultivator of land) (1) (2) (3) (4) (5) (6) Gross annual income in kind Quantity Value in cash Total Admissible expenditure Netdifference betweencolumns10 and 11 Depreciation allowance 1[x x x] 2[Difference between columns12 [and 13]] (7) (8) (9) (10) (11) (12) (13) (14) Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Where the accounts are kept on the mercantile

accountancy or book profit system, a copy of the manufacturing Accounts Or Trading Accounts, the Profit and Loss Account and Balance Sheet or

Trial Balance should be attached to this return. If the accounts are kept in any other system, the name

or the description of the system should be stated and a copy of any

Statement which corresponds to the Profit and Loss Account and

Balance Sheet in a mercantile accountancy system should be attached to this return. In the case of a company, a copy

of the Auditor's Report and Certificate should also be attached. In the case of assessee other than a company, if the accounts are

audited, a statements of audited accounts should accompany the return. But if the accounts are not audited, a statement

showing how the profits have been computed from the books of accounts maintained for the business should also accompany the return.

(1) I declare that to the best of my knowledge and belief, the information given in the above statements Parts I to VII of this return is correct and complete, that the amounts of total agricultural income and other particulars shown are truly stated and relate to the year

ended...............and that no other agricultural income

accrued or arose or was received by me/the Firm/the Family or Tarwad/the Association/the Company/the Institution, during the said year and that I/the Firm/the Family or Tarwad/the Association/the Company/the Institution had during the said year no other source of agricultural income.

(2) I further declare that no revised orders passed by the Income Tax Authorities enhancing the net income from tea grown and manufactured by me/us which was originally furnished before the Agricultural Income Tax authorities for any of the previous assessment years have been revised during the previous year relating to the assessment year for which I am filing this return of agricultural income.

(3) I further declare that Sri..........is a partner in the

firm/firms viz..............and the share income received in

respect of the said firm/firms is/are included in this return of income.

(4) I further declare that the income of the persons mentioned in Section 11 of the Karnataka Agricultural Income-tax Act, 1957 is included in this return of income].

Place........ Signature........

Date........ Status...........

NB.(a) All agricultural income derived from any land situated in Karnataka is liable to be assessed to agricultural income-tax and must, therefore, be entered in this form.

(b) All agricultural income received by a person in any capacity whatsoever whether as an owner, or as a holder of any property for himself or for any other or partly for his own benefit and partly for another either as an owner, trustee, receiver, common manager, administrator, or executor or in any capacity recognised by Law or as a member of an association of individuals or of a Joint Hindu Family or Marumakkatayam tarwad, must be returned in this form.

APPENDIX 4 Notice under Section 18(4) of the Karnataka Agricultural Income-tax Act, 1957

FORM

[See Rule 11(2)]

FORM 3

[See Rule 12(1)]

Form of return of total agricultural income for individuals, undivided Hindu Mithakshara family, undivided Marumakka-tayam tarwads possessing separate properties or other families to which the rule of impartibility applied, firms, companies, associations of individuals, whether incorporated or not and institutions capable of holding property.

Agricultural Income-tax Year 19 ... 19 ....

Name of assessee

Status

Address

Please state here whether the assessee is individual, undivided Hindu Mithakshara family, undivided Marumakkatayam tarwad or Tavazhi possessing separate properties, or other family to which the rule of impartibility applied, firms, companies, associations of individuals, whether incorporated or not and institutions capable of holding property.

PART I

Statements of total agricultural income during the previous year ended (See note 2).

 Source of income (see note 3) Amount of income, profits or gams Remarks 1. Agricultural income derived from rent or revenue (details shown in Part VI). 2. Agricultural income derived from agriculture (details shown in Part VII). 3. Income derived from any building owned and occupied by the receiver of rent or revenue of any land in the State used for agricultural purposes or occupied by the cultivator or receiver of rent in kind as specified in Section 2(a)(3). 4. Dividends from companies earning agricultural income and shares in agricultural income of firms, associations of individuals and institutions capable of holding property. 5. Other items TOTAL AGRICULTURAL INCOME

PART II

Statement of sums included in total Agricultural Income in respect of which Agricultural Income-tax is not payable.

 Sources of Income Amount Remarks 1. Sums which an assessee receives out of the agricultural income of a Hindu undivided family or Marumakkatayam tarwad if he receives such sum as a member of the family or tarwad and tax has already been levied on such agricultural income. 2. Sums paid (i) to effect to keep in force an insurance or a contract for a deferred annuity on the life of the assessee or on the life of the wife or husband of the assessee.(ii) to effect or to keep in force an insurance or a contract for a deferred annuity on the life of any male member of the undivided Hindu family or of the wife of such member. 3. Dividends from companies, share in the income of a firm or an association of individuals where the tax has already been paid or is payable on the income by the company, firm or association and sums received out of agricultural income in respect of which tax has been levied. 4. Donations to charitable institutions of Rs. 250 and above under Section 12(g) of the Act. TOTAL .............

PART III

Particulars required in respect of firms.

(a) To be completed in the case of firms only:

Name of each partner, Address , Extent of share including

interest on capital, salary, commission or other

remuneration, if any (give details)

To be completed in cases where the assessee is a partner in a firm or firms.

Name and Address of the firm Name of each partner including the assessee Address of each partner Share of each partner including interest on capital, salary, commission or other remuneration, if any (give details)

PART IV

To be filled up in the case of Hindu undivided family only. Name of Family: Address :

Name and address of Branch, place of agricultural income in the Karnataka State:

1.

2.

3.

4.

Sl. No. Name of Karta or Manager and other [x x x ] members of family How related to Karta Address 1. 2. 3. 4. 5. 6. Signature Designation. To be filled up by trustees, guardians or agents only. Names and addresses of persons for whom the assessee is the trustee, guardian or agent. Remarks (you may state herein whether you are a trustee, guardian or agent and the nature and date of the creation of the trust, guardianship or agency). Name Address

Dated....... Signature

Designation.

N.B.: Please state here whether the assessee is an individual, a Hindu undivided family, a firm, a company or any other association of individuals.

FORM 3(See Note 8)PART V DEPRECIATIONStatement of particulars to be furnished under clause (e) of Section 5 of the Karnataka Agricultural Income Tax Act, 1957, and of the amount of depreciation allowable. Description of buildings, machinery, plant, furniture, etc., or other capital assets. Written down value at the beginning of the accounting period(see Note 8) Capital expenditure during the year for additions, alterations, improvements and extensions Date from which the additions etc., referred to in Col. 3 are used for the purpose of agriculture Amount on which depreciation is not allowable Prescribed rate per cent Depreciation allowable Remarks (1) (2) (3) (4) (5) (6) (7) (8) Rs. Rs. Rs. Rs. Rs.

PART VIParticulars of Agricultural Income derived from Rent or Revenue Sl. No. Name of Village and taluk in which the land is situated Survey No. Area in acres Kind of crop Status of the aassessee (whether a landlord, of any other receiver of rent or revenue) (1) (2) (3) (4) (5) (6) Gross annual income in kind Quantity Value in cash Total Admissible expenditure Net difference between columns 10 and 11 Depreciation allowance Difference between columns 12 and 13 (7) (8) (9) (10) (11) (12) (13) (14) Rs. Rs. Rs. Rs. Rs. Rs. Rs.

PART VIIParticulars of Income derived from Agriculture for the year 19 ..... Sl. No. Name of Village and taluk in which the land is situated Survey No. Area in acres Kind of crop Status of the assessee (whether a landlord owner mortgagee in possession, lessee or any other cultivator of land) (1) (2) (3) (4) (5) (6) Gross annual income in kind Quantity Value in cash Total Admissible expenditure Netdifference betweencolumns10 and 11 Depreciation allowance 1[x x x] 2[Difference between columns12 [and 13]] (7) (8) (9) (10) (11) (12) (13) (14) Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Where the accounts are kept on the mercantile

accountancy or book profit system, a copy of the manufacturing Accounts Or Trading Accounts, the Profit and Loss Account and Balance Sheet or

Trial Balance should be attached to this return. If the accounts are kept in any other system, the name

or the description of the system should be stated and a copy of any

Statement which corresponds to the Profit and Loss Account and

Balance Sheet in a mercantile accountancy system should be attached to this return. In the case of a company, a copy

of the Auditor's Report and Certificate should also be attached. In the case of assessee other than a company, if the accounts are

audited, a statements of audited accounts should accompany the return. But if the accounts are not audited, a statement

showing how the profits have been computed from the books of accounts maintained for the business should also accompany the return.

(1) I declare that to the best of my knowledge and belief, the information given in the above statements Parts I to VII of this return is correct and complete, that the amounts of total agricultural income and other particulars shown are truly stated and relate to the year

ended...............and that no other agricultural income

accrued or arose or was received by me/the Firm/the Family or Tarwad/the Association/the Company/the Institution, during the said year and that I/the Firm/the Family or Tarwad/the Association/the Company/the Institution had during the said year no other source of agricultural income.

(2) I further declare that no revised orders passed by the Income Tax Authorities enhancing the net income from tea grown and manufactured by me/us which was originally furnished before the Agricultural Income Tax authorities for any of the previous assessment years have been revised during the previous year relating to the assessment year for which I am filing this return of agricultural income.

(3) I further declare that Sri..........is a partner in the

firm/firms viz..............and the share income received in

respect of the said firm/firms is/are included in this return of income.

(4) I further declare that the income of the persons mentioned in Section 11 of the Karnataka Agricultural Income-tax Act, 1957 is included in this return of income].

Place........ Signature........

Date........ Status...........

NB.(a) All agricultural income derived from any land situated in Karnataka is liable to be assessed to agricultural income-tax and must, therefore, be entered in this form.

(b) All agricultural income received by a person in any capacity whatsoever whether as an owner, or as a holder of any property for himself or for any other or partly for his own benefit and partly for another either as an owner, trustee, receiver, common manager, administrator, or executor or in any capacity recognised by Law or as a member of an association of individuals or of a Joint Hindu Family or Marumakkatayam tarwad, must be returned in this form.

APPENDIX 5 FORM

FORM

(See Section 19(2) or 19(4) of the Karnataka Agricultural Income-tax Act)

FORM 5

(See Section 19(2) or 19(4) of the Karnataka Agricultural Income-tax Act)

Office of the

Assistant Commissioner of

Agricultural Income-tax,

Dated the.........19 ....

To

Shri/Smt.............

..

WHEREAS I am not satisfied that the return of income submitted

by you in Form 3 for the previous year ending........is correct

and complete for the reasons noted below under the heading "Reasons for the rejection of the return of income". I propose to determine your total agricultural income for the said period to the best of my judgment

at Rs.........on the basis of the data enumerated under the

heading "basis of the proposed Assessment".

2. You have not filed a return of your total Agricultural Income as required under Section 18(1). Therefore a notice dated .... in Form

2 has been served on you on........to file a return even then

you have failed to file the same within the due date. Hence assessment

"Agricultural Income-tax Officer" by Act No. 5 of 1993, s. 5, w.e.f.4-2-1993.

in proposed to be determined to the best judgment on the basis indicated below.

3. You are hereby called upon to show cause against the proposed assessment and in support of your return you are requested to appear either in person or by a representative duly authorised in this behalf

and produce or cause to be produced at..............(time)

on........(date) at my office/camp at.....any document,

accounts and other evidence in regard to (i) the extent of land cultivated, (ii) nature of the crop raised, (iii) method of cultivation employed, (iv) the market rate of the [crops], (v) the details of the expenses incurred to derive the income, and (vi) such other material as are in your possession to support your return, failing which it will be presumed that you have no objection to the proposed assessment and orders as deemed fit will be passed.

SEAL

Place .......

Date....... Assistant Commissioner of Agricultural Income-tax.

Reasons for rejection of the return of income. Basis of the proposed assessment.

APPENDIX 6 FORM

FORM

[See Rule 12(2)]

FORM 6

[See Rule 12(2)]

No. in the General Index Register........./19 .... on the

file of the [Assistant Commissioner of Agricultural Income-tax.....

1. Name and address of the assessee

2. Year of assessment (financial year)

3. Previous year ended on

4. Status

5. Section and sub-section under which the assessment is made.

6. Brief facts of the case (please discuss hereunder and record your findings on the points raised).

Computation of Income

Sl. No. Detailed source of income Amount of Income (1) (2) (3) 1. Rent or Income derived from land used for agricultural purposes. 2. Income from cultivation or other agricultural operations. 3. Income derived from buildings specified in Section 2(a)(3) 4. Other items. 5. Gross Total Agricultural Income 6. Less income referred under Section 5-A. 7. Net Agricultural Income. 8. Gross Agricultural Income-tax Chargeable on the net Agricultural Income. 9. Less Tax deductions under Section 12(f) and (g) 10. Net amount of Agricultural Income-tax payable.

ORDER OF ASSESSMENT

The total tax assessed for the year is Rs.........This amount

shall be paid on or before..........The demand notice in Form

10 and a challan for the amount payable are enclosed.

SEAL

Dated                                        [Assistant Commissioner of Agricultural Income-tax.]

Place:

APPENDIX 7 Application for registration of a firm under Section 29 of the Agricultural Income-tax Act, 1957

FORM

[See Rule 13]

FORM No. 7

[See Rule 13]

Application for registration of a firm under Section 29 of the Agricultural Income-tax Act, 1957

To

The Assistant Commissioner of Agricultural Income-tax

        .

Re: Assessment year 19.....19.....

1. We, on behalf of..................(Name of the firm)

hereby apply for the registration of our firm under Section 29 of the Agricultural Income-tax Act, 1957, for the assessment year 19.....

2. No change in the constitution of the firm or the shares of the partners has taken place during the previous year and up to the date of this application. The original/certified copy of the instrument evidencing the partnership together with a copy/duplicate copy is enclosed. The prescribed particulars are given in the schedule on the reverse.

Or

Change/changes in the constitution of the firm or the shares of the partners has/have taken place during the previous year and/or after the end of the previous year, but before the date of application. The original/certified copy of the instrument or instruments evidencing the partnership in existence from time to time during the previous year and or up to the date of this application, together with a copy/duplicate copy of each is enclosed. The prescribed particulars are given in the schedule on the reverse.

3. We hereby declare that none of the partners of the firm was at any time, during the previous year and/or up to the date of this application, in relation to the whole or any part of his share in the income or property of the firm, a benamidar of any other partner or other person to whom he is not related as spouse or minor child.

4. We do hereby certify that the profits (or loss, if any) or the previous

year were/will be......................period up to the

date of dissolution were/will be divided or credited as shown in the Schedule and that the information given above and in the Schedule is correct.

Date Signature Address

1.

2.

3.

4.

SCHEDULE Name of partner Address Date of Admittance to partnership Interest on capital or loans (if any) Salary, Commission or other remuneration from firm Share in the: balance of profits (or loss) percentage Remarks (1) (2) (3) (4) (5) (6) (7)

(A) Particulars of the firm as constituted at the date of this application and of the shares of the partners in the income (or loss) of the firm.

(B) Particulars of the apportionment of the income (or loss) of the firm for the relevant previous year between the partners who in that previous year were entitled to share in such income (or loss). (Applicable where the application is made after the end of the relevant previous year).

Note: If The interest, salary, commission or other remuneration is payable (or allowable) only if there are sufficient profits available this fact should be noted by marking the items in the appropriate columns with the letter 'R'. (In other cases the interest, salary, commission or other remuneration may exceed the total profits so as to leave a balance of net loss divisible in column 6).

If any partner is entitled to share in profits but is not liable to bear a similar proportion of any losses, this fact should be indicated by putting against his share in column 6 the letter "P".]

APPENDIX 8 Declaration under Section 29(7) of the Agricultural Income-tax Act, 1957, for continuation of registration

FORM

(See Rule 15)

FORM 8

(See Rule 15)

Declaration under Section 29(7) of the Agricultural Income-tax Act, 1957, for continuation of registration

To

The Assistant Commissioner of Agricultural Income-tax,

Reg: Assessment year 19. . . 19. .

We, on behalf of.........(Name of the firm) declare that.

(i) Our firm was granted registration for the assessment year 19

.....19.....vide order date.........19...... . . passed by

 the Assistant Commissioner of Agricultural Income-tax;

(ii) There has been no change in the constitution of the firm or the shares of the partners, since the last day of the previous

year relevant to the, assessment year 19.....19.....

up to the last date of the previous year relevant to the

assessment year 19.....19.....or to the date (. . .. . 19.....) of dissolution of the firm; and

(iii) None of the partners of the firm was, at any time during the previous year, in relation to the whole or any part of his share in the income or property of the firm, a benamidar or any other partner or other person to whom he is not related as spouse or minor child.

We further declare that the information given above is correct and complete.

Date Signature Address

1.

2.

3.

4.

APPENDIX 8A Communication under clause (b) of Explanation below Section 29-A of the Karnataka Agricultural Income-tax Act, 1957

FORM

[See Rule 16]

FORM 8-A

[See Rule 16]

Communication under clause (b) of Explanation below Section 29-A of the Karnataka Agricultural Income-tax Act, 1957

To

The Assistant Commissioner of Agricultural Income-tax,

        .

Re: Assessment year 19.....19.....

I/We, partner(s) of the firm M/s..........hereby state that

I/We know or have reason to believe that Sri.........Partner of

the said firm was in relation to the whole/part of his share, in the

income/property of the said firm a benamidar of Sri.........

(state name and address) to whom he is not related as spouse or minor

child during the whole/part of the previous year ending on......

Date Signature Address

1.

2. etc.

APPENDIX 9 Notice of enquiry under proviso to Section 30, sub-section (3) of the Karnataka Agricultural Income-tax Act, 1957

FORM

(See Rule 20)

FORM 9

(See Rule 20)

Notice of enquiry under proviso to Section 30, sub-section (3) of the Karnataka Agricultural Income-tax Act, 1957.

Office of the

Assistant Commissioner of

Agricultural Income-tax

Dated.............

To

..

.

Whereas at the time of making the assessment for 19.......

assessment year it is claimed by Sri...........member of a

Hindu undivided family/or branch/an Aliyasanthana Family/a Marumakkatayam Tarwad hitherto as undivided that a partition/maintainance division has taken place among the members of the aforesaid family. You are hereby requested to furnish the following particulars in the Form specified duly verified and attested as provided therein within one month of the date of receipt of notice, to the above office.

SEAL

Dated........

Place........

Assistant Commissioner of

Agricultural Income-tax.

1. What is the name of the Kartha of the family?

2. What are the names of the other members of the family who are entitled to a share in the properties, assets and liabilities of the family? What are their ages today? Also give the names of guardians if they are minors.

3. Give full descriptive particulars of all the immovable properties of the family which are claimed to have been partitioned, their estimated values, the date of partition of each property, their name of the members to whom allotted and the particulars of evidence in a separate statement to be appended.

4. Do you affirm that there are no other movable or immovable properties or assets anywhere apart from these mentioned in answer to question 3 above?

5. If the family was holding any trust funds and properties, give full particulars of the trusts, the particulars of the properties and the name of the member who holds them as trustee after

partition of the family and the date from which he holds them as such trustee.

6. If the family has any outstanding claims against outsiders, say how these claims have been partitioned among the members of the family and the date of partition giving full particulars of these outstandings of their estimated real values on the date of partition.

7. If the family owe debts to anybody, say how these debts have been allocated among the members of the family on partition and the date of allocation giving full particulars of the debts.

8. According to you, what is the date on which all the properties, assets and liabilities of the family have been partitioned in definite proportions?

9. Is there any partition deed? If so, give particulars of the deed and say whether it is registered or unregistered?

10. Give full particulars of Civil suits, if any, filed by or against you or your family since the date mentioned by you in answer to question 7 above.

11. Is anybody to your knowledge disputing partition i.e., claiming that his or her share ought to be more or he or she ought to be allotted a share? If so, give the name of the disputants and brief particulars of the dispute.

12. Has any mutation changes taken place in the revenue records on the facts of the partition?

I, undersigned member of the family, solemnly affirm that the answer given by me to the several questions are true to my best information and belief.

Signature...........

Status............

APPENDIX 10 Notice of Demand under Section 31 of the Karnataka Agricultural Income-tax Act, 1957

FORM

[See Rule 21(2)]

FORM 10

[See Rule 21(2)]

Notice of Demand under Section 31 of the Karnataka Agricultural

Income-tax Act, 1957

To

...........             STATUS.........

...........             G.I.R. No........

1. Take notice that for the assessment year........ the sum of

Rupees..........as specified in the attached form has been

determined to be payable by you.

2. You are required to pay the amount on or before the.......

to the Sadar Treasury/Sub-Treasury at..........when you will

be granted a receipt. A challan is enclosed for this purpose.

3. If you do not pay the amount on or before the date specified above, you will be liable under Section 42 to pay a penalty of a sum not exceeding one-eighth of the tax due from you.

4. You are further warned that unless the total amount due including this penalty is paid on or before the .......19 .... a further penalty will be imposed on you and a warrant of distress will be issued for the recovery of the whole amount due with cost.

5. The assessment has been made under Section 19(4) of the Karnataka Agricultural Income-tax Act, 1957, because you failed to make a return of your income under Section 18(1) (2) to comply with a notice under Section 19(4) but if you were prevented by sufficient cause from making the return or did not receive the notice aforesaid or had not reasonable opportunity to comply or were prevented by sufficient cause from complying with the terms of the notice, you may apply to me within one month from the receipt of this notice under Section 21 to cancel the assessment and proceed to make a fresh assessment.

6. The amount of tax specified in the notice is the difference as the result of enhancement of tax by a revised order under Section 37.

7. If you intend to appeal against the assessment or penalty, you may present an appeal under Section 32 of the Karnataka Agricultural Income-tax Act, 1937, to the 1[Joint Commissioner] of Agricultural Income-tax within 2[60] days of the receipt of this notice in the form prescribed duly stamped and verified as laid down in that form.

SEAL

[Assistant Commissioner of

Agricultural Income-tax.]

Dated........

Place........                                         Address........

APPENDIX 10A Agricultural Income-tax Notice under Section 66 of the Karnataka Agricultural Income-tax Act, 1957

FORM

[See Rule 32]

FORM 10-A

[See Rule 32]

Agricultural Income-tax

Notice under Section 66 of the Karnataka Agricultural Income-tax

Act, 1957

To:

                Status:

                GIR No.

Take notice that according to the application in Form 23 sent by

you for the year...........under Section 66 of the Karnataka

Agricultural Income-tax Act, 1957, you are liable to pay a tax of Rs. ...........

only for the year..........and a sum of Rs...........

is still payable by you. You are required to pay the amount

on or before the..........to the Treasury/Sub-Treasury at...............

when you will be granted a receipt. A challan is enclosed for this purpose.

Place:

Assistant Commissioner of Agriculture

Income-tax.

Date:

APPENDIX 11 Notice of demand under Section 31 of the Karnataka Agricultural Income-tax Act, 1957, for payment of tax provisionally assessed under Section 20 of the Act.

FORM

[See Rule 21(1)]

FORM 11

[See Rule 21(1)]

Notice of demand under Section 31 of the Karnataka Agricultural Income-tax Act, 1957, for payment of tax provisionally assessed under Section 20 of the Act.

To

        ..

        ..

1. Take notice that for the assessment year the sum of Rs.....has

been provisionally determined to be payable by you under Section 20 of the Act.

2. You are required to pay the above sum on or before the............

to the Treasury Officer / Sub-treasury Officer at.......when you will be granted a

receipt. A challan is enclosed for the purpose.

3. If you do not pay the sum on or before the date specified above, you will, without prejudice to any other consequences which you mayincur,

be liable under Section 42 of the Act to a penalty which may be as great as the tax due from you.

SEAL

Assistant Commissioner of

Agricultural Income-tax.

Dated.......19 ....                                 Address...........

Place.

APPENDIX 12 FORM