Rama Prosad Mookerjee, J.

This is a reference under Section 63(1) of the BengalAgricultural Income Tax Act, 1944.

For the assessment year 1945-45 the assessee submitted areturn for the accounting period 1350 B.S. including therein various items ofagricultural income. While going through the books of accounts the Income TaxOfficer traced from the ledger, produced by the assessee, that receipts fromforest by the sale of Sal trees, amounting to Rs. 90,220-1-0, had not beenincluded by the assessee in the return. The taxing officer considered thisitems to be assessable to agricultural Income Tax and made the assessmentaccordingly. On an appeal by the assessee before the Appellate AssistantCommissioner this assessment was upheld has being "agricultural incomefrom rent and revenue." The assessee preferred an appeal before theAppellate Tribunal and by an order dated October 9, 1947, it was held that theincome from forest in this particular case was not agricultural income, and therefore,not assessable under the Agricultural Income Tax Act. On an application by theCommissioner of Agricultural Income Tax this reference has been made for thedetermining the questions :-

"Whether on the facts and circumstances of the case,the sums of Rs. 90,220-1-0 derived from the sale of Sal trees in the forests ofthe assessee can be treated as agricultural income within the meaning ofSection 2 of the Bengal Agricultural Income Tax Act, 1944."

Agricultural income is defined in Section 2(1) of the BengalAgricultural Income Tax Act. The relevant portion of the section which requiresconsiderations in the present case is in the following terms :-

"2(1) agricultural income means -

(a) any rent or revenue derived from land which is used foragricultural purposes and is either assessed to land revenue is British Indiaor subject to a rate assessed and collected by officers of the Crown as such;

(b) any income derived from such land by -

(i) agriculture, or

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

(iii) the sale by a cultivator or receiver of rent-in-kindof the produce raised or received by him, in respect of which no process hasbeen performed other than a process of the nature described in item (ii)."

It is an admitted case that the land on which the foreststands is assessed to land revenue. The only question to be considered iswhether the income from the sale of the Sal trees standing on such land iseither "rent or revenue derived from land which is used for agriculturalpurposes" or, is income derived from such land by agriculture or by theperformance of any process ordinarily employed by a cultivator "to renderthe produce raised ore received by him to fit to be taken to market."

The word "agriculture" is not defined in this Act.Etymological the word is derived from agar-field, culture-cultivation,including harvesting managing and farming.

According to Murray in the Oxford Dictionary"agriculture" means "the science or art of cultivating soilincluding the allied pursuit of gathering the crop and rearing live-stock,tillage, husbandry, farming in the widest sense."

The Websters Dictionary meaning of "agriculture"is "farming, horticulture, forestry, butter and cheese-making, etc."In Bouviers Law Dictionary quoting the Standard Dictionary"agriculture" is defined as "the cultivation of soil for foodproducts or other useful or valuable growth of the filed or garden villagehusband try also by extension farming including any industry practiced by acultivator of the soil in connection with such cultivation, as breeding andrearing of stock, dairying, etc., the science that treats of the cultivation ofthe soil."

In Corpus Juries the term "agriculture" has beendefined to be the "art or science of cultivating the bound especially thefields of larger quantities including the preparation of the soil, the plantingof seeds, raising and harvesting of crops and the rearing feeding andmanagement of live-stock village husbandry and farming. In its general sensethe word also includes gardening or horticulture."

The term agriculture is of wider port than the term"cultivation" : Hedayet Ali v. Kamalanand Singh. The latter terms isdefined in Murrays Oxford Dictionary as meaning tilling of land, tillage andhusbandry. It is, therefore, obvious that a purpose may be connected withagriculture but not necessarily ancillary to cultivation.

The dictionary meaning as quoted above indicate the greatdiversity as to the scope of the word in its ordinary sense. This word, as usedin various English Acts, has been interpreted in decision by the Courts inEnglish but I would refrain from going into the grounds mentioned in thosedecisions as both the idea of agriculture and the scheme of taxation in thatcountry are altogether different from those in India.

It will, therefore, be necessary to consider the backgroundof the use of this word in this particular Act. The definition of the term"agricultural income" in this Act, viz., Bengal Agricultural IncomeTax Act, is in terms similar to the one appearing in Section 2(1) of the IndianIncome Tax Act. The test applied for the considering what class of income isexcluded from assessment under the Income Tax Act as being agricultural incomewill accordingly, be the same for determining what is assessable asagricultural income under the Bengal Agricultural Income Tax Act. We must alsonotice in this connection the demarcation of the jurisdiction as between theCenter and the Provinces in the matter of legislation. Under Sectiona 311(2) ofthe Constitution Act taken along with Schedule 7 it will be noticed that Item41 in List II read with Item 54, List I, excludes agricultural land and incomefrom the ambit of the jurisdiction of the Central Legislature. The IndianIncome Tax Act has, therefore, excluded items of agricultural income from beingassessed to Income Tax and the provincial Agricultural Income Tax Act has madethe same liable to the provincial tax.

In the first instance, the learned counsel refer to thepractice flowed by the Income Tax department for a very long series by yearsand reference is made to the executive instruction issued and appearing in theIncome Tax Manual the Edition, page 240, in the notes under Section 2, whereincome received by a landowner from timber form his own land is described to beagricultural income. Reliance is placed on the observation in Commissioner forSpecial Purposes of the Income Tax v. John Frederick Pemsel, and also on thosein Lakshmi Daiji v.

Commissioner of Income Tax Bihar and Orissa, where thepractice followed by and the interpretation accepted by the Department wasreferred to a being on of the grounds for inferring that the legislature hadnot made by alternation in any successive amending statutes as the legislaturedid not intend to depart from such previous interpretation by the Department.In the present case we are asked to take judicial notice of the executiveinstructions contained in the Manual and the practice followed by theDepartment for a very long period. This line of argument cannot be accepted.There is no evidence before us that the legislature was aware of the practice andthe executive instruction by the Income Tax Department. Moreover, irrespectiveof the fact whether a particular department interpreted the law in a particularmanner for a long series of years or not it would not be of much consequencewhen the Court is called upon to interpret that particular provision of thestatute. This question recently came up for consideration before the JudicialCommittee in Commissioner of Income Tax, Bihar and Orissa v. Raja BahadurKamakhaya Narayan Singh. The following observations by the Judicial Committee,in my opinion, concludes the question as raised :-

"It was stated-and the statement was no disputed-thatfor a considerable period Income Tax authorities had not treated interest onrent in arrears as taxable, and that in their Manuals published from time totime in this view was openly stated. In their view such interest fell withinthe definition of agricultural income. The Income Tax Act, 1922, had in thatperiod been amended from time to time without a change in the definition ofagricultural income. Their Lordships were asked to make the inference that thedefinition had a thereby obtained the meaning attributed to it by the IncomeTax authorities and that the legislature must be taken to have adopted thedefinition in the sense in which the Income Tax authorities had understood andapplied it. The observations of Lord Macnaghten in Pemsels case and of theirLordships in Burahs case were relied on. Their Lordships are unable to acceptthis contention for the reason that they are unable to draw from the factsbrought to their attention the inference that the legislature had by therepetition of the debated phrase adopted by the meaning attributed to it by thetaxing authorities. There is indeed no evidence that the legislature was awareof the practice and their Lordships are not prepared to make the assumptionthat a practice purporting to give a effect to definition has resulted in thecreation of such a generally received meaning embodying that practice as wouldjustify the inference that the attributed meaning had been silently adopted bythe legislature."

It is next contended that a wide and liberal meaning has tobe given to an exemption clause as regards a taxing statute. The chargingsection must always be interpreted strictly and unless a particular type ofincome is made taxable the revenue authorities cannot levy the tax. If there beany doubt the assessee is given the benefit of such doubt. There was a viewthat once a charging section makes a particular class of income assessable totax if there be any provision introducing an exception to the general clausethe onus lies on the assessee to prove that his particular case comes withinthe proviso or exception. This view, however, fell recently to be considered inEngland as also in India and the present-day view seems to be that where anexception. in conferred by statute that cause has to be interpreted liberallyand in favour of the assessee but must always be without any violence to thelanguage used. The rule must be construed together with the exemptingprovisions. which must be regarded as paramount : Australian Mutual ProvidentSociety v. Indian Revenue Commissioners. This decision, though overruled onanother point by the House of Lords in Inland Revenue Commissioner v.Australian Mutual Provident Society, on the point now in question was notoverruled. (Vide also Cadbury Bros., Ltd. v. Sinclair) See also upper IndiaChamber of Commerce v. Commissioner of Income Tax C.P. & U.P. : "It isneedless to observe that, as in the present case, we are concerned with theinterpretation of an exemption clause in a taxing statute, that clause must be,as far as possible, liberally construed and in favour of the assessee providedno violence is done to the language used."

The question whether sale proceeds of forests areagricultural income or not came up for consideration recently by the JudicialCommittee in Raja Mustafa Ali Khan v. Commissioner of Income Tax U.P. &Ajmer-Merwara and on appeal from the decision in Raja Mustafa Ali Khan v.Commissioner of Income Tax U.P. & C.P. The question which was referred tothe Chief Court of Oudh Under Section 66(1) of the Income Tax Act was asfollows :-

"Whether income from the sale of forest trees growingon land naturally and without the intervention of human agency, even if theland is assessed to land revenue is agricultural income within the meaning ofSection 2(1)(a) of the Income Tax Act and as such exempt from Income Tax underSection 4(3)(viii) of the Act."

The only question no doubt was about the "forest treesgrowing naturally and without the intervention of humans agency," and itwas held that the sales proceeds of such trees could not be held toagricultural income. Their Lordships indicate a test to find out whether thetrees are growing on the land naturally, "there was nothing to show thatthe assessee was carrying on any regular operations in forestry" and thejungle from which the trees had been cut as also stated to the "one ofspontaneous growth." Upon these facts the question is whether such incomeis (within Section 2(1)(a) of the Act] rent or revenue derived from land whichsatisfied two conditions, (a) that is used for agricultural purposes, and (b)that it is either assessed to land revenue or etc. or alternatively (as,notwithstanding the from of the question, counsel for the assessee was allowedto argue), whether such income was within the Section 2(1)(b), income derivedfrom such land by agriculture.

"It appears to their Lordships that, whether exemptionis sought under Section 2(1)(a) or Section 2(1)(b), the primary condition mustbe satisfied that the land in question is used for agricultural purposes; theexpression such land in (b) refers back to the land mentioned in (a) and musthave the same quality. It is not then necessary to consider any otherdifficulty which may stand in the way of assessee. His case fails if he doesnot prove that the land is used for agricultural purposes. Upon this pointtheir Lordships concur in the views which have been expressed not only in theChief Court of Oudh but in the High Court of Madras (See Yuvarajah ofPithapuram v. Commissioner of Income Tax Madras) and the High Court ofAllahabad (See Benoy Ratan Banerji v. Commissioner of Income-tax) and elsewherein India. The question seems not yet to have been decided whether land can besaid to be used for agricultural purposes within the section if it has beenplated with trees and cultivated in the regular course of agriculture, and uponthe question their Lordships express to say (a) that in their Opinion noassistance to be got from the meaning ascribed to the word agriculture in theothers statues and (2) that, though it must always be difficult to draw theline, yet, unless there is some measure of cultivation of the land, someexpenditure of skill and labour upon it, it cannot be said to be used foragricultural purposes within the meaning of the Income Tax Act. In the presentcase their Lordships agree with the High Court in thinking that there is noevidence which would justify in the conclusion that this condition issatisfied."

The Judicial Committee makes it clear that (1) no assistanceis to be sought from the meaning of the word "agriculture" as givenin other statutes and (2) unless there is "so measure of cultivation ofthe land, some expenditure of skill and labour upon it," it cannot be saidto be used for agricultural purposes.

It is, therefore, incontrovertible that income from a virginforest or forests of spontaneous growth is not agricultural income. The viewthat tilling of the soil was the sine qua non for bringing within the termagriculture has also been exploded. If there is actual tilling of the soil forproducing the product, it is the unquestionable result of agricultural pursuit.

It is quite evident that the view not expressed by theJudicial Committee about income from virgin and natural forests is inaffirmance of the decisions of the different High court in India (Raja RavuVenkata Mahipati Gangadhara Rama v. Commissioner of Income Tax, Madras,Province of Bihar v. Maharaja Pratap Udainath, Kajumal v. Saligram, Kajumal v.Saligram, Maharaja of Kapurthala v. Commissioner of Income Tax C.P. and U.P.Raja Durga Narain Singh v. Commissioner of Income Tax, U.P. and C.P., BeoharSingh v. Commissioner of Income Tax, U.P. C.P. Raja Pratap Bikram Shah v.Commissioner of Income Tax, U.P. and Berar, and Special Manager, Court ofWards, Majgawan Estate v. Commissioner of Income Tax, U.P. and C.P.)

Whether a particular forests is one of spontaneous growth ornot has to be decided on one important consideration as indicated by theJudicial Committee in the unreported decision above referred to, i.e., wherethere has been "some expenditure of skill and labour upon it." It isalso indicated that whether there were "any regular operation infirstly" would be material facts for consideration. To put it in anotherfrom, the introduction of human against and the application of human effortsworld be the criteria for consideration. The test whether there has been humanagency for intervention was considered to be an important and prime factor inSrimat Jagatguru Shringeri Chandrasekhara Bharati v. Duraisami Naidu,Kadirvelsami Naicker v. Sultan Ahmed Badruddin Raja Ravu Venkata MahipatiGangadhara Rama v. Commissioner of Income Tax, Madras, and In re Moolji Sicka& Co.

On a careful analysis of the reason given by the learnedJudges in the various decision referred to above it will be apparent that thefacts of each particular case must be considered for determining whether therehas or has not been sufficient application of human efforts before it can bedetermined whether the income from a particular forests is agricultural orotherwise. In Kadirvelsami Naicker v. Sultan Ahmed Badruddin, the questionarose whether the growing of cardamoms comes within the meaning of the wordagriculture. It is no doubt true that the Court was required to interpret thedefinition as given in a local Act, viz., under Section 3(1) of the MadrasEstates Land Act, and there are observations on the general question, andthough obiter indicate that the test is the extent of human agency orintervention. In the case of a cardamoms cultivation "in the first place,the seeks are sown in beds where they germinate and are left to grow for six months.Then they are transplanted in another bed where they are left to grow for thefurther six months; the third stage is the replanting of the young plants inthe forest. They are permanently planted there as cardamom cultivation requiresa considerable amount of shade." Therefore, the human element plays animportant part in the bringing of cardamom plant to fruition, independent ofspecial provision in local statutes. There is no doubt that the extent of humanintervention in this case is such as to make the income form such yields asagricultural one.

In In re Moolji Sicka, decided by this Court in 1939, aquestion arose in connections with tendu leaves which were recovered form thetendu trees or shrubs for wrapping tobacco in the manufacturing country madecigarettes. A claim was put forward that the income form the sale ofcountry-made cigarettes or birds was agricultural income in as much as thetends leaves which form part of biris are agricultural products. It was foundin that case that the tendu plant is entirely of wild growth and propagatesitself by root suckers or self-sown seeds. It grows either in jungle or wastelands and is never planted through human agency. There was no question ofeither pruning or watering or manuring or protecting up the soil; no fencing orother protection was afforded. During the cold weather dead leaves, brokentwigs and thorns might be burnt; lopping of olders trees was not permitted.Towards the end of winter young plants are usually cut back with the result thatnew shots appears which yields larger and soft leaves. During April and Mayplucking of leaves takes place. It was held that so much of the products as wasa derived form the collection and preparation of tendu leave so as to make themfit to be taken to market, the tendu products by the pruning of tendu shrubs,was considered to be agricultural income. In this particular case there wasdefinite proof of the cutting of the young plants for the appearance of newshoots and plucking of the leaves; the application of human intervention wasclear and without such human intervention the purpose for which tendu leaveswere used would not have been possible.

Bearing the scope of the decisions in the cases mentionedabove we have next to consider, whether on the finding arrived at in the casenow before us, the income form this particular forest was or was not includedwithin agricultural income.

The Assistant Commissioner questioned the accountant of theestate who appeared before him as to the details about the origin of, themanagement and disposal of, the forest trees. He records in the followingpassage the conditions prevailing in this particular forest :-

"I questioned the accountant of the estate who appearedbefore me and the following facts were ascertained about the forests inquestion. The forest consists mainly of Sal trees which are sold mainly forfuel, wood and posts for huts. The total area of forest of the appellants is14,000 acres. For the proper cultivation of the forest a larger number of officialsinclude a forester, an assistant forester and guards and choukidars aremaintained. The Sal trees a generally sold off in the blocks when about 15years old. Annually blocks of about 1,000 acres are sold up. All the trees inthe back sold up are cut down by the purchasers for sale fuel and house posts.During the rainy season form the stumps of the trees cut down new shoots comeout which grow into matured trees in 15 years, to be cut down again. In orderto prevent damages to the young shoots in the early stages of their growth, theareas cut down are close guarded for one year at least from the time when theblock in question has been completed denuded of trees in order to keep cattleand men off form the lands so that they may not damage the young growingshoots. In order to promote the growth of shoots, the grounds is also kept freefrom undergrowth of jungle. This is not cleared at the appellant expenses butthe villages are allowed to clear the ground of under growth and take the sameaway free of costs."

These findings are accepted by the Tribunal.

Mr. Khaitan, appearing on behalf of the Department,summarises the different processes adopted or required in the following terms:-

(1) Parcelling out the total area of 14,000 acres into about1,000 acres each, tress on each parcel being sold when the trees are about 15years old, is an important agricultural process;

(2) To prevent damage of the new shoots in the early stagesof their growth and to give new vigour to the new shoots and saplings, thegrounds is kept free form undergrowth of jungle and by removal of leaves;

(3) During the early stages of the growth in the each block,the area cut down are closely guarded by forest guarded at least for one yearfrom the time when the block in question is cut down thus keeping both men andcattle off from the lands so that they may not be damage the growing shoots bytrampling and/or browsing as the case may be.

(4) Final cutting at near about the 15 years form anintelligent agricultural operation - season and date have to be intelligentlyfixed and by the directing removal of the older trees leaving the new oneswhich might have grown recently.

It is clear that in this case neither any tilling of thesoil nor sowing of seeds or grafts nor watering is required. Had any one ormore of these operations been proved to have been necessary this particularforests would have been classified as requiring sufficient and pronouncedutilization of human agency and also otherwise be included within the term "agriculture".

This forest is also not, on the facts found, either a virginforest or containing trees which grow spontaneously and naturally without anyhuman intervention whatsoever.

The Principle question in this case is whether on the factsas stated above and on the authorities referred to, the sale proceeds of Saltrees form this particular forest may be considered to be agricultural income.Extent and character of human intervention as found in In re Moolji Sickacannot be noticed in this case. There is no pruning of young plants for helpingthe appearance of new shoots to yield larger and softer leaves. In place ofplucking of leaves we have in the case now before the felling of the trees. Theapplication of human efforts in somewhat different in the present case. Butthere is no doubt that the assessee was carrying on a regular operation inforestry. Only if such operation in forestry be considered to be application ofhuman efforts, it will then and then only be possible to include this incomeunder the head agricultural. There was no cultivation of this land in thiscase, no case of planting of trees, but a regular operation in forestry. Underthe system in force as introduced by the assessee for the use of particularplots on fixed and stated intervals and after one plot is denuded of the oldtrees, the new shoots appearing during the rains without any human interventionhave to be properly guarded, which may be described as tentamount to tending.Mere guarding the forest area form poachers or against surreptitious removal offuel, wood or logs cannot be any case of human intervention sufficient to makethe forest produce as being an agricultural one; but the guarding of the newshoots form either being trampled under foot or being borrowed by animals issomething quite different in nature than simply guarding the forest area. Theoperation of removing undergrowth or fallen leaves, though not by the owner ofthe forest but by this permission accorded to villages and others, is of thesome significance though not of the same extent as "tending" at theinitial stage when the shoots appear after clearing of each period of 15 years.

The last operation which is alleged to relate toagricultural plating is a part of the forestry for removal trees of certain descriptiononly. This is using human knowledge and experience for the proper utilizationof the produce of the earth.

On a careful consideration of the circumstances as disclosedin the finding arrived by the Tribunal there is no escape form the conclusionthat the assessee carried on "regular operation in forestry" in theforest in question.

But before a final decision can be made on the question ofthe assessability to agricultural Income Tax we have next to consider whetherthe income is "from land which issued for agricultural purposes." Ifthere be some measure of cultivation if the land there is no doubt that theland is used for agricultural purposes. But if that is considered to beessential we would be making the two terms XDXX : "agriculture" and"cultivation" almost synonymous. As indicated already, the ordinarydictionary meaning of the two words are different and :"agricultural" is of much wider import than "cultivation."If a plot of land is used for rearing livestock, farming in the widest s enseand darying, such land is considered to be land used for agricultural purposes.Utilization of land "for regular operation in forestry" is, in myview, an agricultural operation, in the wider sense of the term.

If the view of the Judicial Committee were to exclude allkinds of income from the category of agricultural income unless there wasactual cultivation of the soil, reference to "regular operation offorestry" would have been unnecessary. Not that there must always be"some measure of cultivation of the land" and "some expenditureof skill and labour upon it" but that the proof of either would besufficient to bring the case within the either clause (a) or (b) of Section2(1) of the Act. "Regular operations in forestry" do requireexpenditure of skill and labour upon the land on which the forest grows.

We have, therefore, no doubt that in the specialcircumstance as disclosed in the present case there were regular operations offorestry and the question referred to this Court must be answered in theaffirmative.

In view of the attitude adopted by the assessee in thisCourt each party will bear his own costs.

Reference No. 2 of 1947-48. - The facts in this referenceare exactly similar with those death with in Reference No. 1 of 1947-48 exceptsthat the assessment year are different. For reason given in the other case thequestion referred is to be answered in the affirmative.

Each party will bear his own costs in this court.

Gopendra Nath Das, J.

I agree.

.

Commissioner of AgriculturalIncome Tax, West Bengal vs. RajaJagadish Chandra Deo Dhabal Deb(29.09.1948 - CALHC)