TMI Blog2010 (1) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 to 337 of 1997 - - - Dated:- 27-1-2010 - D. MURUGESAN and P. P. S. JANARTHANA RAJA JJ. R. Krishnamurthy for R. Gangadharan for the petitioners Haja Naziruddin for the respondent. JUDGMENT D. MURUGESAN J . In all these tax case revisions, the petitioners/asses- sees have questioned the order of the Commissioner, Agricultural Income- tax, dated March 26, 1997 suomotu revising the earlier order of the assessing authority passed under section 65 of the Act, by invoking the provision of section 34 of the Tamil Nadu Agricultural Income-tax Act, 1955 (for short "the Act"). In these tax case revisions, the petitioners have raised the following substantial questions of law: "1. Whether on the facts and in the circumstances of the case, the Commissioner of Agricultural Income-tax has discharged his initial burden of establishing the existence of essential ingredients to constitute 'association of persons', among the petitioner and two others, before initiating suo motu proceedings under section 34 of the Tamil Nadu Agricultural Income-tax Act, 1955? 2. Whether on the facts and in the circumstances of the case, the Commissioner was justified in initiating proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , assessed the income in the individual names of the petitioners/assessees for the assessment years 1979-80 to 1992-93. Those assessment orders were made apparently on the basis of an inspection. Thereafter, in terms of section 65 of the Act, applications were filed for composition of agricultural income-tax by the three individuals on the ground that their respective holdings are less than 50 acres. Those applications were filed in the prescribed format as required under sub-section (4) of section 65 of the Act. In terms of sub-section (5) of section 65 of the Act, the Agricultural Income-tax Officer should satisfy himself as to whether the particulars specified in the applications are correct and thereafter, on such satisfaction, by order in writing, grant the permission. Such a permission was granted in terms of the said provision for the three assessment years, viz., 1993-94, 1994-95 and 1995-96. 4. It appears that in exercise of the powers under section 34, the Cornmissioner had suo motu proceeded to revise the above assessment orders and caused an inspection of the lands to be made. The Agricultural Income-tax Officer made inspection and found that there was no sub divisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... composition of the agricultural income-tax under the said section will not be entertained. The details furnished in the format have relevance in terms of sub-section (5) of section 65, wherein the Agricultural Income-tax Officer should satisfy himself as to the particulars specified in the application and only after such satisfaction; he could grant permission. Apparently, such satisfaction was arrived at by the Agricultural Income-tax Officer even in the year 1992 when he granted permission for the assessment year 1993-94. He had also taken into consideration the earlier assessment orders from 1978-79 onwards, wherein all the three individuals were assessed separately and such assessment orders were accepted. The order of the Agricultural Income-tax Officer is on the basis that the erstwhile partnership firm was dissolved, the properties were partitioned among the three individuals, that they maintained separate bank accounts, that their individual claims over their respective properties have been accepted by the Labour Department, that they have also maintained three check rolls for three estates, the scrutiny of records revealed that raw tea leaves were sold in individual names ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the members of the association must join together for the purpose of producing an income. An 'association of persons' can be formed only when two or more individuals voluntarily combine together for a certain purpose. Hence, volition on the part of the members of the association is an essential ingredient. It is true that even a minor can join an 'association of per sons' if his lawful guardian gives his consent. In the case of receiving dividends from shares, where there is no question of any management, it is difficult to draw an inference that two or more shareholders function as an 'association of persons' from the mere fact that they jointly own one or more shares, and jointly receive the dividends declared. Those circumstances do not by themselves go to show that they acted as an 'association of persons'." 13. A Division Bench of this court in State of Madras v. Pattammal [1966] 62 ITR 485 (Mad), had observed as follows (page 489): "...The fact that different owners of properties, who were absentee landlords, for their own convenience, secured the help of two residents in the village for looking after their lands and cultivating them, would not ipso facto constitute ..... X X X X Extracts X X X X X X X X Extracts X X X X
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