judgement:
Appeals Nos. 575 and 576 of 1966.
Appeals by special leave from the judgment and order dated October 5, 1963 of the Patna High Court in Misc.
Judicial Cases Nos. 1274 and 1275 of 1960.
D.Narasaraju, section K. Aiyar, R. N. Sachthey and B. D. Sharma, for the appellants (in both the appeals).
M.C. Chagla and U. P. Singh, for the respondent (in, both the appeals).
The Judgment of the Court was delivered by Shah, J.
The respondent Ramniklal Kothari carried on busi ness in diverse lines as a partner in four different firms.
He received from time to time income from the different registered firms as his share of profits.
For the assessment year 1955 56 the respondent declared his share of profits from the four firms at Rs. 77,027/ and he claimed an allowance of Rs. 13,283/ being payment of salary and bonus to staff, expenses for maintenance and depreciation of motor car, travelling expenses and interest.
The Income tax Officer, Hazaribagh, allowed the claim for interest as a permissible deduction and disallowed the rest.
In the view of the Income tax Officer since the respondent did not carry on any independent business, the amount, except interest, were not claimable by the respondent on his own account; if at all, the amounts should have been claimed as business ex incurred in the accounts of the four firms.
For the assessment year 1956 57 the respondent declared Rs. 53,540 as his share of the profits 'in the four firms and claimed an aggregate amount of Rs. 19,380 as admissible deduction on various grounds including Rs. 1,956 as interest paid by him.
The Income tax Officer allowed the claim for interest and disallowed the rest of the claim.
The Appellate Assistant Commissioner confirmed the orders of the Income tax Officer.
But the Income tax Appellate Tribunal set aside the orders passed by the Income tax Officer and remanded the cases for examination of the nature of expenditure claimed to have been incurred by the respondent.
In the view of the Tribunal share of the profits received by the respondent from the firms was taxable as business income, and appropriate deductions admissible under section 10(2) of the Income tax Act, 1922, were allowable in commuting the taxable income of the respondent, 862 The Tribunal then referred the following question in the two cases to the High Court of Patna for opinion under section 66(1) of the Indian Income tax Act, 1922: "Whether the expenses incurred by the assessee (who was not carrying on any independent business of his own), in earning income from various firms in which he was a partner, are allowable in law as deductions ?" The High Court of Patna answered the reference in favour of the respondent.
With special leave granted by this Court, these two appeals have been preferred by the Commissioner of Incometax.
Where a person carries on business by himself or in partner ship with others, profits and gains earned by him are income liable to be taxed under section 10 of the Indian Income tax Act, 1922.
Share in the profits of a partnership received by a partner is " profits and gains of business" carried on by him and is on that account liable to be computed under section 10, and it is a matter of no moment that the total profits of the partnership were computed in the manner provided by section 1 0 of the Income tax Act and allowances admissible to the partnership in the computation of the profits and gains were taken into account.
Income of the partnership carrying on business is computed as business income.
The share of the partner in the taxable profits of the registered firms liable to be included under section 23(5)(a)(ii) in his total income is still received as income from business carried on by him.
Counsel for the Commissioner accepted, and in our judgment counsel was right in so doing, that the share of the respondent from the profits of the firm was income from business carried on by the partner.
Business carried on by a firm is business carried on by the partners.
Profits of the firm are profits earned by all the partners in carrying on the business.
In the individual assessment of the partner, his share from the firm 's business is liable to be taken into account under section 10(1).
Being income from business, allowances appropriate under section 10(2) are admissible before the taxable income is determined.
Section 23(5)(a)(ii) provides that the share of the partner in the profits and gains of a registered firm shall be included in the total income of the partner; and section 16(1)(b) requires that salary, interest, commission or other remuneration payable by the firm beside the share in the balance of profits is to be taken into account in determining the total income.
But it is not thereby implied that expenditure Properly allowable in earning the profits, salary, interest, commission or other remuneration is not to be allowed in determining the taxable total income of the partner.
The receipt by the partner is business income for the, purpose of 863 s.10(1), and being business income, expenditure necessary for the purpose of earning that income and appropriate allowances are deductible therefrom in determining the taxable income of the partner.
The legal principles which we have endeavoured to set out are well settled by several decisions.
In Shantikumar Narottam Morarji vs Commissioner of Income tax, Bombay City(1) the High ' Court of Bombay held that it is not correct as a general legal proposition that a, partner in a registered firm is not entitled to claim any deduction against the share of the profits included in his total income, the share having been arrived at on the assessment of the firm with regard to its profits.
It would be open to the partner to claim a deduction provided he satisfies the taxing authority that such deduction represents necessary expenditure, the expenditure being incurred in order to enable him to earn the profits which are being subjected to tax.
In Basantlal Gupta vs Commissioner of Income tax, Madras(2) the High Court of Madras held that in determining the income of an assessee who is a partner, deduction under section 10(2) of the Income tax Act may be made from his share of income in the firm even after the share has been ascertained.
An allowance under section 10(2) will be permissible in proper cases even after the share has been ascertained if the expenditure sought to be deducted was incurred by the partner solely and exclusively for the purpose of earning his share in the income of the firm.
In a case decided by the High Court of Patna in Jitmal Bhu ramal vs Commissioner of Income tax, Bihar & Orissa(3) a Hindu undivided family which was a partner in a firm claimed that the salary paid to its members for attending to the business of the firm was incurred as a matter of commercial expediency and for the purpose of earning profits from the partnership business.
The Court held that in the assessment of the Hindu undivided family the expenditure would be properly claimed as an allowance under section 10(2) (xv) of the Indian Income tax Act, 1922.
Jitmal Bhuramars case(4) was brought in appeal to this Court : see Jitmal Bhuramal vs Commissioner of Income tax, Bihar & Orissa(4).
It was observed by this Court that a Hindu undivided family will be allowed to deduct salary paid to members of the family, if the payment is made as a matter of commercial or business expediency, but the service rendered must be to the family in relation to the business of the family.
Counsel for the Commissioner relied upon an unreported judgment of the High Court of Calcutta in Messrs. Iswardas Subh (1) (2) (3) (4) (sc.) 864 karan vs Commissioner of Income tax, West Bengal(1).
In that case a Hindu undivided family entered into a partnership agreement with third parties for the purpose of carrying on a rice mill business.
It was not possible for any of the members of the family to attend personally to that business and, therefore, the family employed a Munim to look after its interest.
Salary paid to the Munim was claimed as an allowance in determining the taxable income out of the share of the partnership income.
Chakravartti, C.J., delivering the judgment of the Court was of the opinion that since the Munim did not look after the interest of the assessee in the firm 's business, but only as a servant of the assessee, the amount paid to the Munim was not an allowance admissible in determining the taxable income.
In any event, observed the learned Chief Justice, the profits which have come to the assessee from the partnership have come as net profits, and after they have so come, there cannot be any further deduction on account of expenditure incurred not by the partnership but by the partner who received the share or incurred on any account whatsoever.
We are unable to agree with the view expressed by the learn ed Chief Justice.
The case was apparently not fully argued and counsel for the assessee conceded that the amount paid to the Munim was not a permissible deduction in assessing the taxable income of the family out of the share of the profits received from the firm.
The appeals fail and are dismissed with costs.
One hearing fee.
V.P.S. Appeals dismissed.

summary:
The respondent was carrying on business in diverse lines as a partner in four different firms.
For the assessment years 1955 56 and 1956 57 he declared his share of profits from the four firms and claimed deductions made up of salary and bonus to staff, expenses for maintenance and depreciation of motor car, travelling expenses and interest.
The Incometax Officer and the Appellate Assistant Commissioner allowed only the claim for interest as a permissible deduction.
The Tribunal set aside the orders and remanded the cases for the two years for an examination of the nature of expenditure claimed to have been incurred by the respondent, as, in its view, deductions admissible under section 10(2) of the Incometax Act, 1922 were allowable in computing the taxable income of the respondent.
On the question, whether expenses incurred by the respondent (who was not carrying on any independent business of his own), in earning income from the various firms in which he was a partner, were allowable in law as deductions, the High Court held in favour of the respondent.
In appeal to this Court, HELD : Section 23 (5) (a) (ii) of the Income tax Act, 1922 provides that the share of the partner in the profits and gains of a registered firm shall be included in the total income of the partner.
The share so received by the partner is 'profits and gains of business ' carried on by him and is on that account liable to be computed under section 10.
The receipt being business income for the purpose of section 10(1) expenditure necessary for the purpose of earning that income and allowances appropriate under section 10(2) are deductible therefrom in determining the taxable income of the partner.
The facts that in computing the total profits of the partnership allowances admissible to the partnership in the computation of its profits and gains were taken into account, in the manner provided by section 10, or that section 16(1)(b) requires that salary, interest, commission or other remuneration payable by the firm besides the share in the balance of profit is to be taken into account, do not imply that in determining the taxable income of the partner, expenditure incurred by the partner in earning the profits, salary, interest.
commission or other remuneration is not to be allowed.
[862 C.H] Shantikumar Narottam Morarji vs Commissioner of Income tax, Bombay City, , Jitmal Bhuramal vs Commissioner of Incometax, Bihar & Orissa, and Basantlal Gupta vs Commissioner of lncome tax, Madras, , approved.
M/s. Iswardas Subhkaran vs Commissioner of Income tax West Bengal, Income tax Reference No. 38 of 1952 dated June 2, 1953, of the Calcutta High Court, disapproved.


judgement:
Appeal No. 53 of 1969.
Appeal by special leave from the judgment and decree dated November 1, 1968 of the Rajasthan High Court in Civil Regular Second Appeal No. 487 of 1962.
C. B. Agarwala, Rameshwar Nath and Mahinder Narain, for the appellant.
B. R. L. Iyengar, section K. Mehta and K. L. Mehta, for the respondents.
The Judgment of the Court was, delivered by Bachawat, J.
This appeal arises out of a suit for ejectment by a landlord against a tenant.
The defendant is the tenant of six shops belonging to Thakurji Shri Shri Dwarkadheeshji installed in the temple at Chaura Raasta, Jaipur.
Devendra Prasad is the adhikari or manager of the temple.
He gave a notice to the defendant to quit the shop on August 1, 1957.
On February 28, 1958, the deity and Devendra Prasad filed a suit against the defendant claiming recovery of possession of the six shops and Rs. 1,006/ on account of arrears of rent.
The suit was governed by the Rajasthan Premises (Control of Rent and Eviction) Act, 1950 (Act No. XVII of 1950).
The plaintiffs asked for ejectment of the defendant on the ground that he had sublet the six shops.
The other grounds of ejectment were not established, and it is not necessary to mention them.
The courts below concurrently found that Devendra Prasad as ' the adhikari of the temple was entitled to give the notice to quit and to maintain the suit.
The trial court hold that (1) all the six shops were sub let by the defendant; (2) the sub leting was with the permission of 991 the landlord and (3) the notice to quit was waived by acceptance of rent subsequently accrued due.
Accordingly, the trial court dismissed the suit so far as it claimed ejectment and passed a decree for Rs. 1,006 on account arrears of rent.
The plaintiff filed an appeal against the decree.
The District Judge, Jaipur City, dismissed the appeal.
The plaintiffs filed a second appeal against the decree.
The High Court held that (1) there was on integrated tenancy of all the six shops; (2) four shops were sub let with the permission of the landlord; (3) two shops were sub let without the permission of the landlord towards the end of 1947; (4) the tenant having sub let a part of the premises without the permission of the landlord the ground of eviction under clause (e) of section 13(1) was made out and the landlord was entitled to a decree for possession of all the six shops and (5) there was no waiver of the notice to quit.
Accordingly, the High Court allowed the appeal and passed a decree for eviction of the defendant from the six shops.
The present appeal has been field by the defendant after obtaining special leave.
Counsel for the appellant conceded that there was no waiver of the notice to quit by acceptance of rent or otherwise.
The points arising 'for determination in this appeal are : (1) was there one integrated tenancy of all the six shops ? (2) were the two sub let without the permission of the landlord towards the end of 1947 ? and (3) is the sub letting a ground of ejectment under clause (e) of section 13 (1) of the Rent Act ? As to the first question, we find that four shops were let to the defendant in 1944 and the other two shops on the northern side of the staircase of the temple were let to him in 1945.
The rent of the four shops was Rs. 1501 per month.
The rent of the other two shops was Rs. 65/ per month.
In paragraph 5 of the plaint it was pleaded that in 1953 the defendant agreed to pay a consolidated rent of Rs. 251/8/ per month for all the six shops and to vacate them by July 31, 1957.
In paragraph 5 of the written statement the defendant denied this contract and alleged that in 1953 there was only an enhancement of rent.
The first two courts found that in 1953 there was no new contract of tenancy, that there was only an increase of rent and that the other terms and conditions of the tenancy remained unaltered.
This finding was not vitiated by any error of law.
A mere increase or reduction of rent does not necessarily import the surrender of the existing lease and the grant of a new tenancy.
As stated in Hill and Redman 's Law of Landlord and Tenant, 14th ed., article 385, p. 493 : "But a surrender does not follow from a mere agreement made during the tenancy for the reduction 992 or increase of rent, unless there is some special reason to inter a new tenancy, where for instance, the parties make the change in the rent in the belief that tile old tenancy is at an end.
" In the present case the first two courts on a review of the entire evidence came to the conclusion that the increase of rent did not import a new demise.
This finding of fact was binding on the High Court in second appeal.
The High Court was in error in holding that there was one, integrated tenancy of the six shops.
As to the second question the defendant denied that he sub let the two shops.
The courts below concurrently found that this denial was false and that he sub let the two shops to his brotherin law Ram Gopal.
There was no pleading nor any issue that the sub letting of the two shops was made with the permission of the landlord.
It was not the case of the defendant at any stage of the trial that he had obtained the permission of the landlord for sub letting the two shops.
In the absence of any pleading and any issue on his joint the first two courts were in error in holding that the two shops were sub let with the permission of the landlord.
The permission of the landlord for the sub letting is not established from the mere fact that the landlord realised rent after the sub letting in the absence of proof hat the landlord had then clear knowledge of the sub lease.
The date of the sub letting of the two shops is not mentioned in the plaint.
In the absence of any pleading and any issue on his question the High Court 'was in error in recording the finding that the two shops were sub let towards the end of 1947 after the Jaipur Rent Control Order 1947 came into force.
We can only say that the sub letting was sometime after 1945.
As to the third question : section 13(1) of the Rajasthan Premises (Control of Rent & Eviction) Act, 1950 provides : "Notwithstanding anything contained in any law or contract, no Court shall pass any decree, or make any order, in favour of a landlord, whether in execution of a decree or otherwise, evicting the tenant so long as he is ready and willing to pay rent therefor to the full extent allowable by this Act, unless it is satisfied " The sub section then sets out several grounds of ejectment under twelve main heads.
Clause (e) mentions the following ground : " that the tenant has assigned, sub let or otherwise parted with the possession of, the whole or any part of the promises without the permission of the landlord.
" 993 The appellant 's contention is that sub letting before the Act came into force is not within the purview of clause (e).
The High Court held that the two shops were sub let after October 15, 1947 when the Jaipur Rent Control Order, 1947 came into force, that the sub letting was a ground of ejectment under paragraph 8 ( 1 ) (b) (ii) of that Order and that the tenant 's liability for eviction on this ground continued after the promulgation of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950.
With regard to this line of reasoning it is sufficient to say that the plaintiffs have not established that the sub letting was after October 15, 1947.
The case must be decided on the footing that on the date of the sub letting, no Rent Control legislation was in force.
The question whether a subletting before the coming into force of the Act is within the purview of clause (e) of section 13(1) depends upon the construction of that clause.
The relevant words are "has sub let".
The present perfect tense contemplates a completed event connected in some way with the present time.
The words take within their sweep any sub letting which was made in the past and has continued up to the present time.
It does not matter that the sub letting was either before or after the Act came into force.
All such sub lettings are within the purview of clause (e).
Sections 26 and 27(1) of the Act throw considerable light on the construction of section 13(1).
They are as follows : "26.
No decree for the eviction of a tenant from any premises in areas to which this Act extends for the time being, passed before the date of commencement of this Act shall in so far as it relates to the eviction of such tenant be executed against him, as long as this Act, remains in force therein, except on any of the grounds mentioned in section 13 and under the circumstances specified in this Act.
27(1) In all suits for eviction of tenants from any premises in areas to which this Act has been extended undersection 2, pending on the date specified in the notification under that section, no decree for eviction shall be passed except on one or more of the grounds mentioned in section 13 and under the circum stances specified in this Act.
" Section 26 bars the execution of a decree for eviction passed before the commencement of the Act except on any of the grounds mentioned in section 13 and under the circumstances specified in the Act.
Likewise, section 27(1) bars the passing of a decree for eviction in a pending suit except on one or more of the grounds under 994 section 13 and under the circumstances specified in the Act.
Sections ' 26 and 27(1) clearly contemplate that the grounds of eviction mentioned in section 13 may have arisen before the Act came into force.
The argument that section 1 3 ( 1 ) (e) takes away vested rights and should not be given a retrospective effect is based on fallacious assumptions.
Apart from the Rent Act the landlord is entitled to eject the tenant on the expiry of the period mentioned in the notice to quit.
Section 13(1) protects the tenant from eviction except in certain specified cases.
If one of the grounds of ejectment is made out the tenant does not qualify for,protection from eviction.
We find no reason for presuming that section 13 (1) (e) is not intended to apply to sub lettings before the Act came into force.
If the "tenant has sub let" the premises without the permission of the landlord either before or after the coming into force of the Act, he is not protected from eviction under section 13 ( 1 ) (e), and it matters not that he had the right to sub let the premises under section 108(j) of the Transfer of Property Act.
The plaintiffs have thus established the ground of eviction under section 1 3 (1 ) (e) with regard to the two shops on the northern side of the staircase of the temple.
With regard to the four other shops the courts below concurrently found that they were sublet with the permission of the land lord.
In our opinion, the plaintiffs are entitled to a decree for ejectment of the defendant from the two shops and the claim for eviction from the other four shops should be dismissed.
In the result, the appeal is allowed in part.
The decree passed by the High Court for eviction of the defendant from the four shops is set aside and the suit in so far as it claims eviction from the four shops is dismissed.
The decree passed by the High Court for eviction of the defendant from the other two shops on the northern side of the staircase of the temple mentioned in paragraph 4 of the plaint is affirmed.
Parties will pay and bear their own costs throughout, in this Court and in all the courts below.
The defendant will have one month 's time to vacate the two shops.
Y.P. Appeal allowed in part.

dataset_name: IN-Abs

summary:
The respondent landlord let out to the appellant four shops and later one let out to him two more shops.
The respondent filed a suit alleging that subsequent to the letting of the shops, by a contract, the rent was consolidated and increased and that the shops were sub let by the appellant, so the appellant be ejected from all the six shops under section 13 (1) (e) of the Rajasthan Premises (Control of Rent and Eviction) Act.
The appellant denied the contract and denied the subletting altogether.
The trial court dismissed the suit, and the first appellate court affirmed the decree.
Both these courts concurrently found that new contract of tenancy was not created, it was only an increase of rent, the other terms of the tenancy remained unaltered, and that the two shops were sub let but with the permission of the landlord.
The High Court, in second appeal, reversed the decree of the courts below, and held that there was one integrated tenancy of all the shops, that the four shops were sub let with the permission of the landlord, but the later two were sub let without permission, and that having sub let a part of the premises without the permission, the decree for possession of all the shops must be passed.
appeal to this Court, the appellant tenant contended that (i) the tenancy of all the six shops were not one integrated; (ii) two shops were not sublet without the permission of the landlord; and (iii) the sub letting was before the Jaipur Rent Control Order, 1947 came into force, which was repealed and continued by the promulgation of the Rajasthan Premises (Control of Rent & Eviction) Act, 1950, and therefore ejectment could not be claimed under section 13(1) (e) of the Act.
HELD : The appellant could not be ejected from four shops, but ought to be ejected from the two shops.
(i) A mere increase or reduction of rent does not necessarily import the surrender of the existing lease and the grant of a new tenancy.
In the present case the first two courts on a review of the entire evidence came to the conclusion that the increase of rent did not import a new demise.
This finding of fact was binding on the High Court in second appeal and it erred in holding that there was one integrated tenancy of the six shops.
[991 H 992 B] (ii) In the absence of any pleading and any issue on the question of sub letting, the first two courts were in error in holding that the two shops were sub let with the permission of the landlord.
The permission of the landlord for the sub letting cannot be established from the mere fact that the landlord realised rent after the sub letting in the absence of proof that the landlord had then clear knowledge of the sub lease.
[992 D] The date of the sub letting of the two shops is not mentioned in the plaint.
In the absence of any pleading and any issue on this question the 990 High Court was error in recording the finding that the two shops were sub let towards the end of 1947 after the Jaipur Rent Control Order 1947 came into force.
It can only be said that the sub letting was sometime after 1945.
[992 E] (iii) Section 13(1)(e) of the Act was intended to apply to sub letting before the Act came into force.
If the tenant had sub let the premises without the permission of the landlord either before or after the coming into force of the 'Act, he was not protected from eviction under section 13(1) (e), and it matters not that he had the right to sub let the premises under section 108(j) of the Transfer of Property Act.
The present perfect tense, by words "has sub let" in section 13(1)(e) of the Act contemplates a completed event connected in some way with the present time.
The words take within their sweep any sub letting which was made in the part and has continued up to the present time.
It did not matter that the subletting was either before or after the Act came into force.
Further sections 26 and 27(1) of the Act contemplated that grounds of eviction mentioned in section 13 may have arisen before the Act came into force.
[993 D 994 A]


judgement:
Appeal No. 2456 of 1966.
Appeal from the judgment and order dated January 27, 1964 of the Patna High Court in Misc.
Judicial Case No. 299 of 1958.
D. Narsaraju, section K. Aiyar, R. N. Sachthey and B. D. Sharma, for the appellant.
C. K. Daphtary, Narain Rao, V. D. Narayan and D. Goburdhun, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Indetermining the taxable income of the respondent firm for the assessment year 1948 49 the Income tax Officer added to the income returned a sum of Rs. 1,60,000 as 'undisclosed receipts '.
The order was confirmed in ' appeal by the Appellate Assistant Commissioner, and by the Tribunal.
The Income tax Officer had in the meantime commenced a proceeding for the levy of penalty and in exercise of the power under section 28 (1) (c) of the Indian Income tax Act, 1922 he directed the respondent firm to pay Rs. 60,000 as penalty.
The Appellate Assistant Commissioner in appeal confirmed the order.
The Income tax Appellate Tribunal rejected the contention of the respondent that the order imposing penalty upon the firm after the original firm was dissolved was without jurisdiction.
The Tribunal referred at the instance of the respondent firm the following question to the High Court of Patna for opinion; "Whether on the facts and in the circumstances of the case the imposition of penalty under section 28 (1) (c) of the Indian Income tax Act, upon the petitioner firm (respondent) as constituted at the time of levy of penalty was legal and valid?" The High Court called for a supplementary statement of the case and pursuant thereto the Tribunal submitted a statement on the specified points raised by the order of the High Court that (1)The firm which carried on the business during the calendar year 1947 was dissolved on July 7, 1951 when Butto Kristo Roy, one of the partners, died.
(2)During the previous year 1947 there was no instrument of partnership in existence, but the terms of the oral partnership were the same as set out in the partnership deed dated October 17, 1949.
985 (3) The business of the firm was continued with effect from July 8, 1951 by the new firm as successor to the business of the old firm.
The terms of the partnership were the same as set out in the deed dated October 17, 1949 and the partners and their shares were also the same except that Baidyanath Roy took the place of Butto Kristo Roy.
(4) With effect from April 28, 1952, the business was carried on by a partnership constituted by Baidyanath Roy and Bijali Kanti Roy under an instrument dated August 27, 1952.
There was no dissolution of the firm, which was carrying on the business; there was only a change in the constitution of the old firm from April 28, 1952.
The High Court held that penalty could be legally levied only upon the original firm constituted in the account year relevant to the assessment year 1948 49 and not upon the new firm constituted under the deed dated April 27, 1952.
The Tribunal and the High Court approached the problem before them on the assumption that the source of the power of the Income tax Officer to impose a penalty was in section 44 of the Indian Income tax Act, 1922.
In so assuming, in our judgment, they were in error.
Section 44 of the Indian Income tax Act, 1922, as it stood at the relevant date, in so far as it is material provided : "Where any business, profession or vocation carried on by a firm has been discontinued every person who was at the time of such discontinuance a partner of such firm shall, in respect of the income, profits and gains of the firm be jointly and severally liable to assessment under Chapter IV and for the amount of tax payable and all the provisions of Chapter IV shall, so far as may be, apply to any such assessment".
The section is fairly plain : it applies to cases of discontinuance of the business of a firm and not where there is dissolution of the firm but not discontinuance of its business.
In section M. section Karuppiah Pillai vs Commissioner of Income tax, Madras(1), in dealing with the effect of section 44 of the Indian Income tax Act, 1922, before it was amended by Act 7 of 1939, a Full Bench of the Madras High Court observed "This section (s.44) only applies when there has been discontinuance of the, business, The section (1) 911.T.R. I. 986 says that if a business is discontinued the partners shall nevertheless be jointly and severally liable for the profits which had been earned".
In Shivram Poddar vs Income tax Officer, Central Circle II, Calcutta and Anr.(1) this Court examined the scheme of section 44 (before it was amended by the Finance Act of 1958) and its inter relation with the provisions of sections 25(1), (2), 26(1), (2) and 28 (1) (c) in some detail.
The Court observed : "Section 44 operates in two classes of cases; where there is discontinuance of business, profession or vocation carried on by a firm or association, and where there is dissolution of an association.
It follows that mere dissolution of a firm without discontinuance of the business will not attract the application of s.44 of the Act. .
The reason for this distinction appears from the scheme of the Income tax Act in its relation to assessment of the income of a firm.
A firm whether registered or unregistered is recognised under the Act as a unit of assessment (sections 3 and 2(2)), and its income is computed under clauses (3) and (4) of section 23.
as the income of any other unit.
Section 25(1) relates to assessment in cases of a discontinued business whether the business is carried on by a firm or by any other person. . .
Then there is the special provision relating to assessment when at the time of making an assessment it is found that a change has occurred in the constitution of a firm, or a firm has been newly constituted : section 26(1).
The date on which the change has occurred is immaterial; it may be in the year of account, in the year of assessment or even after the close of the year of assessment, The Income fax Officer has under section 26(1) to assess the firm as constituted at the time of making the assessment, but the income, profits and gains of the previous year have, for the purpose of inclusion in the total income of the partners, to be apportioned between the partners who were entitled to receive the same.
Subsection (2) of section 26 relates to assessment in the case of succession to a person (which expression includes a firm) carrying on a business by another person in such capacity. . .
Discontinuance of business has the same connotation in section 44 as if has in section 25 of the Act; it does not (1) 987 cover mere change in ownership or in the constitution of the unit of assessment.
Section 44 is, therefore, attracted only when the business of a firm is discontinued, i.e. when there is complete cessation of the busi ness and not when there is a change in the ownership of the firm, or in its constitution, because by reconstitution of the firm, no change is brought in the personality of the firm, and succession to the business and not discontinuance of the business results. .
But the Income tax Act recognises a firm for purposes of assessment as a unit independent of the partners constituting it; it invests the firm with a personality which survives reconstitution.
A firm discontinuing its business may be assessed in the manner provided by section 25(1) in the year of account in which it discontinues its business; it may also be assessed in the year of assessment.
In either case it is the assessment of the income of the firm.
Where the firm is dissolved, but the business is not discontinued, there being change in the constitution of the firm, assessment has to be made under section 26 (1), and if there be succession to the business assessment has to be made under section 26(2).
The provisions relating to assessment on reconstituted or newly constituted firms, and on succession to the business are obligatory.
Therefore, even when there is change in the ownership of the business carried on by a firm on reconstitution or because of a new constitution, assessment must still be made upon the firm.
When there is succession, the successor and the person succeeded have to be assessed each in respect of his actual share.
This scheme of assessment fumishes the reason for omitting reference to dissolution of a firm from section 44 when such dissolution is not accompanied by discontinuance of the business".
Two other cases decided by this Court may be briefly noticed.
In C. A. Abraham vs Income tax Officer, Kottayam and Another(1) there was discontinuance of the business of the firm consequent upon dissolution of the firm, section 44 was held applicable, and it was held that imposition or penalty being a process of assessment the.
Income tax Officer was not incompetent to levy penalty after discontinuance of the business.
In Commissioner of Income tax, Madras and Another vs section V. Angidi Chettiar (2) this Court held that the Income tax Officer could exercise under section 44 read with section 28 power to impose penalty upon the firm which discontinued its business on dissolution caused by the death of one of the partners (1) (2) 988 Section 44 therefore only applied to those cases in which there had been discontinuance of the business and not to case, in which the business continued after reconstitution of the firm or there was succession to the business.
Cases of reconstitution of the firm or succession to the business of the firm are covered by sections 26(1) and (2).
"Assessment" in Chapter IV of the Income tax Act, 1922, includes a proceeding for imposition of penalty.
Section 28 of the Act authorises the Income tax Officer, if satisfied, in the course of any proceeding under the Act that any person has, inter alia, concealed the particulars of his income or deliberately furnished inaccurate particulars of such income, to direct that such person shall pay by way of penalty, a sum of money not exceeding the amount specified therein in addition to the incometax and super tax payable by such person.
The expression " person" includes for the purpose of section 28, a firm registered or unregistered.
If there is reconstitution of the firm, by virtue of section 26, the Income tax Officer will in imposing the penalty proceed against the firm.
If there is discontinuance of the business penalty will be imposed against the partners of the firm.
Before the Tribunal and the High Court the case was argued on the footing that section 44 alone was applicable.
Whether under the terms of section 26 read with section 28, penalty may be imposed upon the new partners for the failure of the partners of the firm constituted in the year of account relating to the assessment 1948 49 was never investigated.
The question raised by the Tribunal is in terms sufficiently comprehensive to embrace an enquiry whether partners of the firm in existence on July 30, 1954, were liable to be assessed to penalty as successors in interest of the partners of the original firm in existence in the year of account relating to the assessment year 1948 49.
But in a reference under section 66 of the Indian Income tax Act, 1922, only the question which was either raised or argued before the Tribunal may be answered, even if the language of the question framed by the Tribunal may apparently include an enquiry into other matters which could have been, but were not, raised or argued.
The appeal fails and is dismissed.
In the circumstances of the case there will be no order as to costs in this Court.
G.C. Appeal dismissed.

summary:
The respondent was a firm on which penalty under section 28(1)(c) of the Indian Income tax Act, 1922 was imposed by the Income tax Officer in respect of the assessment year 1948 49.
At the time when the penalty was imposed the constitution of the firm had changed though the same business was continued by the reconstituted firm.
The appeals filed by the respondent before the Appellate Assistant Commissioner and the Tribunal were rejected.
In reference the High Court held that penalty could be legally imposed upon the original firm constituted in the account year relevant to the assessment year 1948 49 and not upon the new firm constituted in 1952.
In coming to their conclusions the Tribunal as well as the High Court proceeded on the assumption that the source and power of the Income tax Officer to impose a penalty was in section 44 of the Indian Income tax Act, 1922.
In appeal by the Revenue to this Court, HELD : (i) Section 44 only applies to those cases in which there has been discontinuance of the business and not to cases in which the business continues after the reconstitution of the firm, or there is succession to the business.
Cases of reconstitution of the firm or succession to the business are covered by sections 26(1) and (2).
The Tribunal and the High Court were therefore in error in relying on section 44 of the Act.
[988 A; 985 D E] (ii) Assessment in Ch.
IV of the Income tax Act 1922 includes a proceeding for imposition of penalty and the expression 'person ' includes for the purpose of section 28 a firm registered or unregistered.
If there is reconstitution of the firm by virtue of section 26, the Income tax Officer will in imposing the penalty proceed against the firm.
If there is discontinuance of the business penalty will be imposed against the partners of the firm.
[988 B D] In the present case, however, this Court could not go into the question whether penalty on the respondent firm was leviable under the terms of sections 26 and 28 even though the question raised by the Tribunal was in terms sufficiently comprehensive to embrace the enquiry.
In a reference under section 66 of the Indian Income tax Act, 1922, only the question which was either raised or argued before the Tribunal may be answered, even if the language of the question framed by the Tribunal may apparently include an enquiry into other matters which could have been but were not, raised or argued.
[988 D F] Shivram Poddar vs Income tax Officer, Central Circle II, Calcutta & Anr., , C. A. Abraham vs Income tax Officer, Kottayam and I.T.R. 425 and Commissioner of Income tax, Madras & Anr.
V. section V. Angidi Chettiar, , applied.
section M. section Karuppiah Pillai vs Commissioner of Income tax Madras, , approved.


judgement:
Appeal No. 661 of 1966.
Appeal by special leave from the judgment and order dated December 8, 1964 of the Punjab High Court, Circuit Bench at Delhi in Civil Revision No. 92 D of 1962.
S.C. Manchanda, section K. Mehta, and K. L. Mehta, for the appellant.
Bishan Narain, I. section Sawhney and M. R. Chhabra, for the respondents.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from a judgment of the Punjab High Court (Circuit Bench at New Delhi) dismissing a petition for revision directed against the concurrent judgments of the courts below dismissing the action for eviction filed by the appellant against the respondents from a premises on Ajmal Khan Road, Karol Bagh, New Delhi.
The facts may be succinctly stated.
By means of a rent deed dated February 13, 1950 the appellant, who is the owner of the suit premises inducted as a tenant Labha Mal Arora, now deceased, who was a practising Advocate.
Clauses (2) and (6) of the rent deed were in the following terms "2.
That the tenant agrees to use the property for his residence.
6.That the tenant shall not assign or sublet the above said property or any part thereof without the written consent of the landlord, or utilise the Property for any purpose other than that mentioned above.
" On the same date a letter exhibit D 2 was written by the appellant to the late Labha Mal Arora saying: "As per our oral talk regarding your tenancy for my house No. 6/64, I have no objection your having your professional office "alongwith residence" there provided it is not inconsistent with the provisions of Delhi Im provement Trust Act.
" It appears and it has been so found, that Labha Mal Arora who had his office at a different place shifted the same to the suit premises where he was residing with his family.
He died in the year 1952.
Till 1952 the premises were being used only for residence by his sons and widow.
in August 1957 Chamanlal respondent No. 1, who qualified himself as a legal practioner, started having an office in the premises.
It would appear that the other 11 son respondent No. 3 also started practising as a lawyer in the same premises some time later.
On 21 11 1957 the appellant served a notice on the sons and widow of the deceased Labha Mal Arora that it has been learnt that they had constructed a double storeyed building in Naiwala Karol Bagh and that since the suit premises were required bona fide for the personal residence of the appellant they should shift to their house and vacate the rented premises.
This was followed by a second notice to the same effect.
As the possession of the premises was not delivered the appellant instituted a suit for ejectment against the respondents under the Delhi & Ajmer Rent Control Act, 1952 (hereinafter called the old Act).
Two grounds were taken for seeking eviction.
One was that the respondents had built a large residential house and were liable to be ejected under section 13(1)(h) of the old Act.
The second was that the premises were required bona fide for personal use.
It may be mentioned that the second ground was abandoned in the trial court.
The suit was contested by the respondents on the ground that the late Labha Mal Arora had taken the premises on rent for residence as well as for an office for professional purposes and the premises had been used as residence cum office.
For this reason it was asserted that the construction of a residential house by the respondents did not furnish a ground for eviction.
During the pendency of the suit the Delhi Rent Control Act, 1958 (hereafter called the new Act) came into force.
Section 14(1)(h) which was equivalent to section 13(1)(h) of the old Act contained the word 'suitable ' which was omitted as it appeared before the word "residence" in section 13(1)(h); the relevance and significance of that omission will be noticed presently.
The trial court relied inter alia on the letter Ext.
D 2 and the statement of Chaman Lal respondent according to whom two rooms were used by the late Labha Mal Arora as his office and another one room was being used by his clerk and held that the premises had been let for "residence cum business purposes".
The argument that the late Labha Mal Arora had only been granted a licence to use the premises for professional purposes and that the licence came to an end on his death, was repelled.
It was found that the respondents had built a residential house, and since the premises in suit had been let out to their predecessor in interest not for residential purpose alone but also for business purposes no eviciton could be ordered under the provisions of section 13(1)(h) of the old Act or section 14(1) (h) of the new Act.
The Additional Senior Sub Judge dismissed the appeal preferred by the appellant in agreement with the decision of the trial court.
The following portion from his judgment relating to the finding with regard to the purpose for 12 which the premises had been let out to the late Labha Mal Arora may be reproduced: "It is in evidence that prior to taking the premises in suit on rent from the appellant, Labha Mal deceased, was having his professional office as an advocate in Sadar Bazar, Delhi, and on taking the premises in suit on rent he had shifted his office in the suit premises.
This fact is fully supported by the statement of Shri Chaman Lal, respondent No. 1, and the notices, exhibit D.W. 9/1, and D.W. 9/2 issued by Shri Labha Mal from the suit premises.
Shri Chaman Lal has stated that out of the five rooms of the suit premises, two rooms were ' used by his deceased father as office.
From the above also 'it is proved that the suit premises were let by the appellant to Shri Labha Mal deceased for residence cum business purposes.
" On the question of the ambit and scope of section 13(1)(4) _of the old Act the learned Judge expressed the opinion that it would be unreasonable to hold that a tenancy which had been created both for purposes of residence and carrying on a profession could be successfully terminated merely by showing that the tenants had acquired a suitable residence.
The appellant approached the High Court on the revisional side.
J. section Bedi, J. considered the rent deed Ext.
P 3 and the letter exhibit D 2 as also the other evidence and came to the same conclusion at which the courts below had arrived.
Reliance was placed on the additional fact that when the suit was instituted the premises were being used by Chamal Lal both for purposes of residence and office.
Before dealing with the contentions raised on behalf of the appellant it is necessary to refer to section 13(1)(h) of the old Act and section 14 (1) (h) and section 57 of the new Act.
Section 13 (1) (h) of the old Act contained a provision that if the Court was satisfied inter alia that the tenant had whether before or after the commencement of the Act built, acquired vacant possession of or been allotted a suitable residence it could order ejectment.
In section 14(1)(h) of the new Act the only change that was made was that the word "suitable" before the word "residence" was omitted.
Under section 57 of the new Act notwithstanding the repeal of the old Act all suits and other proceedings pending under that Act were to be continued and disposed of in accordance with provisions of the old Act.
According to the first proviso to subsection (2) the court or other authority "shall have regard to the provisions of this Act.
,, In Karam Singh Sobhi & Anr.
vs Shri Pratap Chand 13 & Anr.
(1) this Court had to consider the effect of what was contained in section 57 of the new Act.
It was held that the effect of the first proviso to section 57(2) was that pending proceedings would continue under the old Act with this addition that where the new Act had slightly modified or clarified the previous provisions, those modifications and clarifications would govern the case.
Similarly in Brij Kishore & Others vs Vishww Mitter Kapur & Others(1) it was laid down that the first proviso to section 57(2) of the new Act must be read harmoniously with the substantive provisions of subs.
(2) and the only way of harmonising the two was to read the expression "shall have regard to the provisions of this ' Act" as merely meaning that where 1 the new Act had slightly modified or clarified the previous provisions those modifications and clarifications should be applied.
These words did not take way what was provided by sub section
(2) and ordinarily the old Act would apply to pending proceedings.
It has been contended by Mr. section C. Manchanda for the appel lant that the new section would be applicable as no radical departure has been made in section 14(1) (h) by omission d the word "suitable" and that there was only slight modification or clarification of the previous provision, namely, section 13(1) (h).
In our opinion whether section 1 3 (1 ) (h) of the old Act or section 14 ( 1 ) (h) of the new Act is applied the result, as will be presently seen, will be the same in the instant case.
Coming to the question whether the suit premises were taken by the late Labha Mal Arora for residence only or for residence as well as for use as office for carrying on his professional work of a legal practitioner, it may be observed that the concurrent finding of the court below is that the premises had been taken for residential cum business or professional purposes.
That finding being one of the fact must be accepted as final.
It would, therefore, seem that the decision of this Court in Dr, Gopal Das Verma vs Dr. section K. Bhardwaj and Another(") can be appositely applied.
In that case it was held that a tenant could not be ejected under section 13(1)(h) because the tenancy of premises let out or used for residence and carrying on of profession could not be terminated merely by showing that the tenant had acquired a suitable residence.
There the premises had been let out to a doctor who was an ear, nose and throat specialist.
It was found that the premises had been used by the tenant for professional as well as residential purposes with the consent of the landlord.
The case, therefore fell outside section 13 (1) (e) but even under section 1 3 ( 1 ) (h) eviction could not be ordered.
This is what was said in that connection.
(1) (2) A. I. R. (52) (3) ; at p. 685.
14 "If the premises from which ejectment is sought are used not only for residence but also for profession how could section 13(1)(h) come into operation? One of the, purposes for which the tenancy is acquired is professional use, and that cannot be satisfied by the acquisition of premises which are suitable for residence alone, and it is the suitability for residence alone which is postulated by section 13(1)(h).
Therefore, in our opinion, it would be unreasonable to hold that the tenancy which has been created or used both for residence and profession can be successfully terminated merely by showing that the tenant has acquired a suitable residence.
" In the above case this Court further held that section 2(g) of the old Act which defined the word "Premises" referred to three kinds of user to which the premises can be put to i.e. residence, commerce and any other purpose.
This necessarily included residence and commerce combined.
Since it was shown that the premises had been let both for residence and for commercial purposes it did not follow that the premises ceased to be premises under section 2(g); they continued to be premises under the last clause ' of that provision.
The definition of 'premises ' in the new Act is contained in section 2(1) and it is the same as in section 2(g) of the old Act.
The word 'tenant ' is defined by section 2 (1 ) of the, new Act to mean "any person by whom or on whose account or behalf the rent of any premises is or but for a ' special contract would be, payable . .
Having regard to section 14(1)(h) of the new Act the original tenantin the present case was one who was in occupation of premises which were used for a composite purpose, namely, residence and profession.
There could, therefore, be no eviction merely by acquisition of vacant possession of a residence by such a tenant and the position would be the same with regard to his heirs and legal representatives, the present respondents.
It is quite clear that section 14(1)(h) can apply only where a tenant is in occupation of a premises which are only residential; then alone he would have to go if he acquires or has residential accommodation of his own.
Mr. Manchanda has next contended that the decision of this Court in Dr. Gopal Das Verma 's case(1) is distinguishable because it appeared from various facts that the dominant intention was to use the premises as a nursing home.
He submits that in the present case the dominant intention was to use the premises as residence and the late Labha Mal Arora was merely given permission or licence which was of a personal nature to have his (1) [1962] 2 S.C.R.678 at p.685.
15 office as well there.
We are unable to find that any test of dominant intention was applied 'in Dr. Gopal Das Verma 's case(1).
The position in England is different where premises are let partly for business purposes and partly for residence.
There the statutory provisions lay down that where a dwelling is let partly for business purposes and partly for residence, the Rent Act applies to the whole(1).
Moreover where there is no covenant as to user and the question is what user was contemplated, the Court will infer what use was contemplated by the tenancy agreement; the test was "the main purpose" or "predominant intention" or "the prevailing contemplation" or "a preponderating contemplation" for the letting.
(2 ) (ibid, p. 69).
We are unable to derive any assistance from the English cases on the point. ' Lastly Mr. Manchanda sought to raise the question of the permission contained in the letter Ext.
D 2 being a licence which was personal to late Labha Mal Arora and which should be deemed to have come to an end on his death.
It is further pointed out that after his death for a number of, years the respondents used the premises purely for residence.
In view of the finding of the courts below that the premises had been let to the predecessorin interest of the respondents for residence cum business or profession, this submission cannot be entertained.
For all the above reasons this appeal fails and it is dismissed with costs.
, Y.P. Appeal dismissed, (1) ; at p. 685.

summary:
The predecessor in interest of the respondents who was a practising advocate, took on rent certain premises for residence.
He could with the written consent of the appellant landlord set up his professional office also there.
After the death of their predecessor in interest the respondents lived in the premises and sometimes later two of the respondents qualified a.% lawyers and started having an office in the premises.
The appellant filed a suit for the respondents ' eviction on the ground that the respondents had acquired a "suitable residence" by building a large residential house and were liable to be ejected under section 13 (1) (h) of the Delhi & Ajmer Rent Control Act, 1952.
During the pendency of the suit the Delhi Rent Control Act, 1958 came into force and under section 14(1) (h) of the Act, the word "suitable" was omitted.
The trial Court dismissed the suit holding that since the premises had been let out to their predecessor in interest not for residential purpose alone but also for business purposes, no eviction could be ordered under the provisions of section 13 (1) (h) of the old Act or section 14(1) (h) of the new Act.
The first appellate Court, and the High Court in revision affirmed the order of the trial Court.
Dismissing the appeal this Court, HELD:Assuming, that section 14(1)(h) of the new Act, applied, having regard to its language, the original tenant in the present case was one who was in occupation of premises which were used for a composite purpose, namely, residence and profession.
There could, therefore, be no eviction merely by acquisition of vacant possession of a residence by such a tenant and the position would be the same with regard to his heirs and legal representatives, the present respondents.
Section 14(1) (h) can apply only where a tenant is in occupation of premises which are only residential; then alone he would have to go if he acquires or has residential accommodation of his own.
[14 F] The decision of this Court in Dr. Gopal Das Verma vs Dr. section K. Bhardwaj ; applied apprositely to this case.
The test of dominant intention with regard to the use of the premises was not applied in Dr. Gopal Das Vermals case.
[13 F G; 15A] In view of the finding of the courts below that the premises had been let to the predecessor in interest of the respondents for residence cum profession, the submission that the permission was personal to the predecessor in interest of the respondent, which came to an end on his death could not be entertained.


judgement:
Appeal from a judgment and decree of the Patna High Court dated 25th March, 1949, in A.S. 2280 of 1948 reversing an appellate _decree of the Subordinate Judge in Suit No. 62 of 1948.
Baldev Sahay (T. K. Prasad, with him) for the appel lant.
N.C. Chatterjee (H.J. Umrigar, withhim) for the respond ent. 1951.
February 2.
The judgment of the Court was deliv ered by FAZL ALL J.
This is an appeal from a judgment and decree of the High Court of Judicature at Patna reversing the appellate decree of a Subordinate Judge in a suit insti tuted by the respondents.
The facts of the case are briefly these.
The respondents have been in occupation as a monthly tenant of several blocks of premises belonging to the appellants at a monthly rental of Rs. 112.
The rent for the months of March, April and May, 1942, having fallen into arrears, they remitted it along with the rent for June, on 28th June, 1947, by means of two cheques.
As the appellants did not accept the cheques, on 4th August, 1947, the re spondents remitted the amount subsequently by postal money order.
On 12th August, 1947, the appellants, maintaining that there was non payment of rent and hence the respond ents were liable to be evicted, under section 1 1 (1) (a) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 (Bihar Act III of 1947), applied to the House Control ler for the eviction of the respondents from the premises.
Section 11 (1) (a) of the Act runs as follows : "Notwithstanding anything contained in any agreement or law to the contrary and subject to the provisions of section 12, where a tenant is in possession of any building, he shall not be liable to be evicted therefrom, whether in execution of a decree or otherwise, except 147 (a) in the case of a month to month tenant, for non payment of rent or breach of the conditions of the tenancy, or for subletting the building or any portion thereof with out the consent of the landlord, or if he is an employee of the landlord occupying the building as an employee, on his ceasing to be in such employment ;" On 30th August, 1947, the respondents, whose money order had in the meantime been returned by the appellants, deposited the rent up to the month of June in the Office of the House Controller.
Notwithstanding this deposit, the House Controller passed an order on the both November, directing the eviction of the respondents by 10th May, 1948, and holding that they had made themselves liable to eviction by reason ' of non payment of rent.
The order of the House Controller was upheld by the Commissioner on appeal on the 27th April, 1948, and thereupon the respondents filed the present suit in the Patna Munsif 's Court for a declaration that the order of the ContrOller dated the 10th November, 1947, was illegal, ultra vires and without jurisdiction.
The suit was dismissed by the Munsif and his decree was upheld on appeal, but the 'High Court decreed the suit holding that the order of the Rent Controller was without jurisdiction.
The appellants were thereafter granted leave to appeal by the High Court, and they have accordingly preferred this appeal.
The High Court has delivered a somewhat elaborate judg ment in the case, but it seems to us that the point ' aris ing in this appeal is a simple one.
The main ground on which the respondents have attacked the order of eviction passed by the House Controller is that in fact there was no non payment of rent, and, since no eviction can be ordered under the Bihar Act unless non payment is established, the House 'Controller had no jurisdiction to order eviction.
On the other hand, one of the contentions put forward on behalf of the appellants is that there was non payment of rent within the meaning of that expression as used in the Act, since the rent was not paid as and when it 148 fell due.
It was pointed out that the rent for the month of March became due in April and the rent for April became due in May, but no step was taken by the respondents to pay the arrears until the 28th June, 1947.
It appears that at the inception of the tenancy, the respondents had paid one month 's rent in advance, and it had been agreed between them and the appellants that the advance rent would be adjusted whenever there was default in payment of rent for full one month.
It was however pointed out that the advance payment could be adjusted only for one month 's rent, but, in the present case, the rent for three months had become due, and, since in a monthly tenancy the rent is payable for month to month, the rent for each month becoming due in the subse quent month, non payment of that rent at the proper time was sufficient to attract the provisions of section 11(1) (a) of the Act.
The appellants also raised a second contention, namely, that having regard to the scheme of the Act, the House Controller was fully competent to decide whether the condition precedent to eviction had been satisfied, anal once that decision had been arrived at, it could not be questioned in a civil court.
This contention was accepted by the first two courts, and the first appellate court dealing with it observed as follows : "But the Buildings Control Act has authorised the Con troller to decide whether or not there is nonpayment of rent and it is only when he is satisfied that there has been nonpayment of rent that he assumes jurisdiction.
If the question of jurisdiction depends upon the decision of some fact or point of law, and if the court is called upon to decide such question, then such decision cannot be collater ally impeached (vide 12 Patna 117).
In my opinion when the Controller assumed the jurisdiction on being satisfied that there was non payment of rent and proceeded to pass an order of eviction.
I think the Civil Court can have no jurisdic tion to challenge the validity of such order.
" The High Court did not however accept this view, and after referring to section 111 of the Transfer of 149 Property Act, proceeded to propound its own view in these words: "Regard being had to the circumstances in which the Act under consideration was enacted and its object, as stated in the preamble as being 'to prevent unreasonable eviction of tenants ' from buildings, it would seem that the expres sion 'non payment of rent ' in section 11 in the context in which it is used must be given an interpretation which would have the effect of enlarging the protection against determi nation of a tenancy enjoyed by a tenant under the ordinary law.
The Legislature, therefore, by enacting that a tenant shall not be liable to be evicted 'except for nonpayment of rent ' should be held to have intended to protect a tenant from being evicted from a building in his possession for being a defaulter in payment of rent, if he brings into Court all the rent due from him before the order of his eviction comes to be passed .
If, as contended for on behalf of the respondents, section 11 of the Act were to be construed as entitling a landlord to apply for eviction of a tenant on the ground of irregular payment of rent amounting to ' non payment ' of rent and as empowering the Controller to determine as to whether irregular payment of rent amounts to non payment of rent within the meaning of sub section (1)of section 11, and subsection (3) of section 18 were to be construed as making the decision of the Controller on this question of law a final one, it will appear that not only this Act will have conferred a right upon the landlord very much in excess of the right that he enjoys under the ordinary law in the matter of determination of tenancies, but that it will have conferred very much larger power on the Controller than that possessed by the Civil Courts under the ordinary law in the matter of passing decrees for eviction of tenants.
The principle of law and equity on which relief against forfei ture for ',non payment of rent ' is based, will have been completely abrogated, and the protection of a tenant in possession of a building instead of being enlarged will 150 have been very much curtailed.
A construction of these provisions, which is calculated to bring about these conse quences, cannot and is not in accordance with the circum stances to which this Act was intended to apply and indeed cannot be accepted.
The contention of Mr. Lalnarain Sinha on behalf of the respondent that the circumstances disclosed in the petition raised the question for determination by the Controller whether a case of non payment of rent in law was established, and his decision of that question, even if wrong in law, is not liable to be questioned in the Civil Court must be over ruled.
" It seems to us that the view taken by the High Court is not correct.
Section 11 begins with the words "Notwithstand ing anything contained in any agreement or law to the con trary," and hence any attempt to import the provisions relating to the law of transfer of property for the inter pretation of the section would seem to be out of place.
Section 11 is a self contained section, and it is wholly unnecessary to go outside the Act for determining whether a tenant is liable to be evicted or not, and under what condi tions he can be evicted.
It clearly provides that a tenant is not liable to be evicted except on certain conditions, and one of the conditions laid down for the eviction of a month to month tenant is non payment of rent.
Sub section (8) (b) of section 11 provides that the "Controller shall, if he is satisfied that the claim of the landlord is bona fide, make an order directing the tenant to put the landlord in possession of the building" and if he is not so satisfied he shall make an order rejecting the application.
Section 16 empowers the Controller to make enquiries and inspections and to summon and enforce the attendance of witnesses and compel the production of documents in the same manner as is provided in the Code of Civil Procedure.
Section 18 pro vides that any person aggrieved by an order passed by the Controller may within 15 days of the receipt of such order by him, prefer an appeal to the Commissioner of the Divi sion, and it also prescribes the procedure for the hearing of the appeal.
Sub section (3) 151 of this section states that "the decision of the Commission er and subject only to such decision, an order of the Con troller shall be final, and shall not be liable to be ques tioned in any Court of law whether in a suit or other pro ceeding by way of appeal or revision.
" The Act thus sets up a complete machinery for the investigation of those matters upon which the jurisdiction of the Controller to order eviction of a tenant depends, and it expressly makes his order final and subject only to the decision of the Commis sioner.
The Act empowers the Controller alone to decide whether or not there is non payment of rent, and his deci sion on that question is essential before an order can be passed by him under section 11.
Such being the provisions of the Act we have to see whether it is at all possible to question the decision of the Controller on a matter which the Act clearly empowers him to decide.
The law on this subject has been very lucidly stated by Lord Esher M.R. in The Queen vs Commissioners for Special Purposes of the Income Tax(1), in these words : "When an inferior court or tribunal or body, which has to exercise the power of deciding facts, is first estab lished by Act of Parliament, the legislature has to consider what powers it will give that tribunal or body.
It may in effect say that, if a certain state of facts exists and is shown to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things, but not otherwise.
There it is not for them conclu sively to decide whether that state of facts exists, and, if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction.
But there is another state of things which may exist.
The legislature may intrust the tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction, on finding that it does exist, to proceed further or do (1) , at .319.
20 152 something more.
When the legislature are establishing such a tribunal or body with limited jurisdiction, they also have to consider, whatever jurisdiction they give them, whether there shall be any appeal from their decision, for otherwise there will be none.
In the second of the two cases I have mentioned it is an erroneous application of the formula to say that the tribunal cannot give themselves jurisdiction by wrongly deciding certain facts to exist, because the legis lature gave them jurisdiction to determine all the facts, including the existence of the preliminary facts on which the further exercise of their jurisdiction depends; and if they were given jurisdiction so to decide without any appeal being given, there is no appeal from such exercise of their jurisdiction.
" On the same lines are the following observations of Sir James Colville in The Colonial Bank of Australasia vs Wil lan(1), which is a case dealing with the principles on which a writ of certiorari may be issued : "Accordingly, the authorities. establish that an adju dication by a Judge having jurisdiction over the subject matter is, if no defect appears on the face of it, to be taken as conclusive of the facts stated therein; and that the Court of Queen 's Bench will not on certiorari quash such an adjudication on the ground that any such fact, however essential, has been erroneously found.
" There can be no doubt that the present case falls within the second category mentioned by Lord Esher, because here the Act has entrusted the Controller with a jurisdiction, which includes the jurisdiction to determine whether there is non payment of rent or not, as well as the jurisdiction, on finding that there is nonpayment of rent, to order evic tion of a tenant.
Therefore, even if the Controller may be assumed to have wrongly decided the question of non payment of rent, which by no means is clear, his order cannot be questioned in a civil court.
It seems to us that on this short ground this appeal must succeed, and we (1) , at p. 443.
153 accordingly allow the appeal, set aside the judgment and decree of the High Court and restore the decree of the courts below.
The appellants will be entitled to costs throughout.
Appeal allowed.

summary:
Section 11 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947, has entrusted the Controller with a jurisdiction, which includes the jurisdiction to determine whether there is non payment of rent or not, as well as the jurisdiction, on finding that there is non payment of rent, to order eviction of a tenant.
Therefore, even if a Controller has wrongly decided the question wheth er there has been non payment of rent, his order for evic tion on the ground that there has been non payment of rent cannot be questioned in a civil court.
Queen vs Commissioners for Special Purposes of Income Tax (21 O.B.D. 313) and Colonial Bank of Australasia vs Willan (L.R. P.C. 417) relied on. 146


judgement:
il Appeals Nos. 213A and 213B of 1953.
Appeals by Special Leave against the Judgment and Order dated the 24th June, 1953, of the Election Tribunal, Ludhiana, in Election Petition No. 153 of 1952.
C. K. Daphtary, Solicitor General for India, (Harbans Singh Doabia and Rajinder Narain, with him) for the appellant in Civil Appeal No. 213A. Tilak Raj Bhasin and Harbans Singh for respondent No. 2 in Civil Appeal No. 213A and the appellant in Civil Appeal No. 213B. Naunit Lal for respondents Nos. 3 and 19 in both the appeals.
May 21.
The Judgment of the Court was delivered by BOSE J.
These are two appeals against the decision of the Election Tribunal at Ludhiana.
The contest was for two seats in the Pun jab Legislative Assembly.
The constituency is a double member constituency, one seat being general and the other reserved for a Scheduled Caste.
The first respondent is Atma Ram.
He was a candidate for the reserved seat but his nomination was rejected by the Returning Officer at the scrutiny stage and so he was unable to contest the election.
The successful candidates were Rattan Anmol Singh, the appellant in Civil Appeal No. 213 A of 1953, for the general seat and Ram Prakash, the appellant in Civil Appeal No. 213 B of 1953 for there served.
Atma Ram filed the present election petition.
The Election :Tribunal decided in 483 his favour by a majority of two to one and declared the whole election void.
Rattan Anmol Singh and Ram Prakash appeal here.
The main question we have to decide is whether the Returning Officer was right in rejecting the petitioner 's nomination papers.
The facts which led him to do so are as follows.
The Rules require that each nomination paper should be "subscribed" by a proposer and a seconder.
The petitioner put in four papers.
In each case, the proposer and seconder were illiterate and so placed a thumb mark instead of a signature.
But these thumb marks were not "attested".
The Returning Officer held that without "attestation" they are invalid and so rejected them.
The main question is whether he was right in so holding.
A subsidiary question also arises, namely, whether, assuming attestation to be necessary under the Rules, an omission to obtain the required attestation ' amounts to a technical defect of an unsubstantial character which the Returning Officer was bound to disregard under section 36(4) of the Representation of the People Act, 1951 (XLIII of 1951).
Section 33(1) of the Act requires each candidate to "deliver to the Returning Officer. a nomination paper completed in the prescribed form and subscribed by the candidate himself as assenting to the nomination and by two persons referred to in sub section (2) as proposer and seconder.
" Sub section (2) says that "any person whose name is registered etc. may subscribe as proposer or seconder as many nomination papers as there are vacancies to be filled. .
The controversy centers on the word "subscribed" which has not been defined in the Act.
The prescribed nomination form referred to in subsection (1) of section 33 is to be found in Schedule II.
In this form we have the following: "9.
Name of the proposer 12.
Signature of the proposer 484 13.
Name of the seconder. . . . . . 16.
Signature of the seconder.
" The Oxford English Dictionary sets out thirteen shades of meaning to the word ',subscribe", most of them either obsolete or now rarely used.
The only two which can have any real relation to the present matter are the following: 1. "To write (one 's name or mark) on, originally at the bottom of a document, especially as a witness or contesting party; to sign one 's name to.
" This meaning is described as "rare." 2. "To sign one 's name to; to signify assent or adhesion to by signing one 's name; to attest by signing." This appears to be its modern meaning, and is also one of the meanings given to the word "sign", namely "to attest or confirm by adding one 's signature; to affix one 's name to (a document) late." One also finds the following in Stroud 's Judicial Dictionary, 3rd edition: "Subscribe.
(1) 'Subscribe ' means to write under something in accordance with prescribed regulations where any such exist But though this is the strict primary meaning of the word, it may sometimes, e.g., in the attestation of a will, be construed as 'to give assent to, or to attest ' or 'written upon "(3) 'Subscription is a method of signing; it is not the only method '; a stamped, or other mechanical impression of a signature is good, in the case of electioneering papers. " It is clear that the word can be used in various senses to indicate different modes of signing and that it includes the placing of a mark.
The General Clauses Act also says that " 'sign ' with reference to a person who is unable to write his name, includes 'mark ' But this is subject to there being nothing repugnant in the subject or context of the Act.
In our opinion, the crux of the matter lies there.
We have to see 485 from the Act itself whether "sign" and "subscribe" mean the same thing and whether they can be taken to include the placing of a mark.
The majority decision of the Tribunal holds that "sign" and "subscribe" are not used in the same sense in the Act because a special meaning has been given to the word I sign" and none to the word "subscribe", therefore, we must use "subscribe" in its ordinary meaning; and its ordinary meaning is to "sign" but not to "sign" in the special way prescribed by the Act but in the ordinary way; therefore we must look to the General Clauses Act for its ordinary meaning and that shows that when it is used in its ordinary sense it includes the making of a mark.
We agree with the learned Chairman of the Tribunal that this is fallacious reasoning.
The General Clauses Act does not define the word "subscribe" any more than the Representation of the People Act, and if it is improper to exclude the special meaning given to " sign " in the Representation of the People Act because the word "sign " is defined and not " subscribe," it is equally improper to import the special definition of " sign " in the General Clauses Act because that also defines only "sign" and not "subscribe" and also because the " subject " and " context " of the Representation of the People Act show that the writing of a signature and the making of a mark are to be treated differently.
The learned counsel for the respondent analysed the Act for us and pointed out that the word " subscribe " is only used in Chapter I of Part V dealing with the Nomination of Candidates while in every other place the word " sign " is used.
We do not know why this should be unless, as was suggested by the learned Solicitor General, the Legislature wished to underline the fact that the proposer and seconder are not merely signing by way of attesting the candidate 's signature to the nomination form but are actually themselves putting the man forward as a suitable candidate for election and as a person for whom they are prepared to vouch, also that the candidate 's signature imports more than a mere vouching for the accuracy of the 486 facts entered in the form.
It imports assent to his nomination.
We think the learned Solicitor General is probably right because section 33 speaks of "a nomination paper completed in the prescribed form and subscribed by the. candidate himself as assenting to the nomination." But however that may be, it.is evident from the form that " signatures are required.
It is also evident from the definition of sign " that the Legislature attached special importance to the fact that in the case of illiterate persons unable to write their names it is necessary to guard against misrepresentation and fraud by requiring that their signatures should be formally authenticated in a particular way.
A special statutory cloak of protection is thrown around them just as the ordinary law clothes pardanish in women and illiterate and ignorant persons and others likely to be imposed on, with special protective covering.
Now it is to be observed that section 2 calls itself an interpretation " section.
It says " (1) In this Act, unless the context otherwise requires. . . . . . . . . (k) 'sign ' in relation to a person who is unable to write his name means authenticate in such manner as may be prescribed.
" It is evident then that wherever the, element of signing " has to be incorporated into any provision of the Act it must be construed in the sense set out above.
Therefore, whether " subscribe " is a synonym for " sign " or whether it means " sign " plus something else, namely a particular assent, the element of " signing " has to be present: the schedule places that beyond doubt because it requires certain " signature*.
" We are consequently of opinion that the " signing," whenever a " signature " is necessary, must be in strict accordance with the requirements of the Act and that where the signature cannot be written it must be authorised in the manner prescribed by the Rules.
Whether this attaches exaggerated importance to the authorisation is not for us to decide.
What is beyond 487 dispute is that this is regarded as a matter of special moment and that special provision has been made to meet such cases.
We are therefore bound to give full affect to this policy.
Now if " subscribe " can mean both signing, so called,, and the placing of a mark (and it is clear the word can be used in both senses), then we feel that we must give effect to the general policy of the Act by drawing the same distinction between signing, and the making of a mark as the Act itself does in the definition of "sign.
" it is true the word "subscribe" is not defined but it is equally clear, when the Act is read as ' a whole along with the form in the second schedule, that "subscribe" can only be used in the sense of making a signature and as the Act tells us quite clearly how the different types of " signature " are to be made, we are bound to give effect, to ft.
In the case of a person who is unable to write his name his " signature " must be authenticated in " such manner as may be pres cribed.
" The prescribed manner is to be found in rule 2(2)of the Representation of the People (Conduct of Elections and Election Petitions) Rules, 1951.
It runs as follows : " For the purposes of the Act or these rules,, a person who is unable to write his name shall, unless otherwise expressly provided in these rules, be deemed to have signed an instrument or other paper if he has, placed a mark on such instrument or other paper in the presence of the Returning Officer or the presiding officer or such other officer as may be specified in this behalf by the Election Commission and such officer on being satisfied as to his identity has attested the mark as being the mark of such person.
" In view of this we are clear that attestation in the prescribed manner is required in the case of proposers and seconders who are not able to write their names.
The four nomination papers we are concerned with were not " signed " by the proposers and seconders in the usual way by writing their names, and as their marks are not attested it is evident that they have not been " signed ", in the special way which the Act 488 requires in such cases.
If they are not " signed " either in one way or the other, then it is clear that they have not been " subscribed " because " subscribing " imports a "signature" and as the Act sets out the only kinds of "signatures" which it will recognise as II signing" for the purposes of the Act, we are left with the position that there are no valid signatures of either a proposer or a seconder in any one of the four nomination papers.
The Returning Officer was therefore bound to reject them under section 36(2)(d) of the Act because there was a failure to comply with section 33, unless he could and should have had resort to section 36(4).
That sub section is as follows.
The Returning Officer shall not reject any nomination paper on the ground of any technical defect which is not of a substantial character.
" The question therefore is whether attestation is a mere technical or unsubstantial requirement.
We are not able to regard it in that light.
When the law enjoins the observance of a particular formality it cannot be disregarded and the substance of the thing must be there.
The substance of the matter here is the satisfaction of the Returning Officer at a particular moment of time about the identity of the person making _a mark in place of writing a signature.
If the Returning Officer had omitted the attestation because of some slip on his part and it could be proved that he was satisfied at the proper time, the matter might be different because the element of his satisfaction at the proper time, which is of the substance, would be there, and the omission formally to record the satisfaction could probably, in a case like that, be regarded as an unsubstantial technicality.
But we find it impossible to say that when the law requires the satisfaction of a particular officer at a particular time his satisfaction can be dispensed with altogether.
In our opinion, this provision is as necessary and as substantial as attestation in the cases of a will or a mortgage and is on the same footing as the II subscribing " required in the case of the candidate himself If there is no signature and no mark the form would have to be rejected and their 489 absence could not be dismissed as technical and unsubs tantial.
The "satisfaction " of the Returning Officer which the rules require is not, in our opinion, any the, less important and imperative.
The next question is whether the attestation can be compelled by the persons concerned at the scrutiny stage.
It must be accepted that no attempt was made at the presentation stage to satisfy the Returning Officer about the identity of these persons but evidence was led to show that this was attempted at the scrutiny stage.
The Returning Officer denies this, but even if the identities could have been proved to his satisfaction at that stage it would have been too late because the attestation and the satisfaction must exist at the presentation stage and a total omission of such an essential feature cannot be subsequently validated any more than the omission of a candidate to sign at all could have been.
Section 36 is mandatory and enjoins the Returning Officer to refuse any nomination when there has been " any failure to comply with any of the provisions of section 33. . .
The only jurisdiction the Return ing Officer has at the scrutiny stage is to see, whether the nominations are in order and to hear and decide objections.
He cannot at that stage remedy essential defects or permit them to be remedied.
It is true he is not to reject any nomination paper on the ground of any technical defect which is not of a substantial character but he cannot remedy the defect.
He must leave it as it is.
If it is technical and unsubstantial it will not matter.
If it is not, it cannot be set right.
We agree with the Chairman of the Election Tribunal, that the Returning Officer rightly rejected these nomination papers.
The appeals are allowed with costs and the order of the Election Tribunal declaring the elections of the two successful candidates to be wholly void is set aside.
The election petition is dismissed, also with costs.

summary:
Under section 33(1) of the Representation of the People Act, 1951, each nomination paper should be "subscribed" by a proposer and a seconder.
Where the proposer and the seconder of a nomination paper (as in the present case) are illiterate and so place thumb marks instead of signatures and those thumb marks are not attested, the nomination paper is invalid as attestation in the prescribed manner in such a case is necessary because of rule 2(2) of the Representation of the People (Conduct of Elections and Election Petitions) Rules, 1951, which requires it.
Signing, whenever signature is necessary, must be in strict accordance with the requirements of the Act and where the signature cannot be written it must be authorised in the manner prescribed by the Rules.
62 482 Attestation is not a more technical or unsubstantial requirement within the meaning of section 36(4) of the Act and cannot be dispensed with.
The attestation and the satisfaction must exist at the presentation stage and a total omission of such an essential feature cannot be subsequently validated at the scrutiny stage any more than the omission of a candidate to sign at all could have been.
Section 36 of the Act is mandatory and enjoins the Returning officer to refuse any nomination when there has been "any failure to comply with any of the provisions of section 33."