JUDGMENT Collister and Bajpai, JJ. - This is a reference u/s 66(2) of the Indian income tax Act and ha been made by the Commissioner, Central and United Provinces, at the instance of Kunwar Bishwanath Singh, the Assessee in the present case. It appears that the income tax authorities hold the view that the income of His Highness the Maharaja of Benares who is a person residing out of British India. If it has any connection, direct or indirect, with any business or property in British India, can be chargeable to income tax on the ground that it shall be deemed to be income accruing or arising within British India and they, therefore, started certain proceedings for the assessment year 1934-35. The income tax Officer of Benares issued a notice directly on His Highness the late Maharaja and on a return being filed made an assessment. 2. After an appeal, which was unsuccessful, to the Assistant Commissioner there was a reference to this Court and this very Bench decided the reference, which is reported as Maharaja of Benares v. Commissioner of income tax 1938 AWR (HC) 247 : 1938 ALJ 34. The contention advanced then on behalf of His Highness was that the entire proceedings taken by the income tax authorities in the case were in direct violation of the mandatory procedure prescribed by the Act inasmuch as the income tax authorities had not, before proceeding to assessment, fixed upon an agent of the non-resident principal u/s 42 of the Act. We acceded to the contention advanced on behalf of His Highness and held that, granting that the Assessee was a non-resident, the income tax Officer was precluded by certain provisions of the Indian income tax Act from serving a notice on him without appointing an agent within the meaning of Section 43 of the Act. 3. On receipt of a copy of our judgment the Commissioner of income tax forwarded it to the Assistant Commissioner and he on the 14th of February, 1933, set aside the assessment in connection with the assessment year 1936-37, regarding which an appeal had been filed earlier before him and directed a fresh assessment to be made after the appointment of an agent u/s 43 of the Act. We do not know exactly how the situation stood regarding the assessment year 1934-35 about which reference had been made to us. We do not know exactly how the situation stood regarding the assessment year 1934-35 about which reference had been made to us. The income tax Officer of Benares then after entering into correspondence with the Chief Secretary of the Benares State and getting a reply from him to the effect that the proper person to be appointed as agent was not the Chief Secretary, but Diwan Nizamat Kunwar Bishwanath Singh, issued a notice to the litter intimating to him the intention of the income tax Officer to appoint him as agent to Captain His Highness the Maharaja Sir Aditya Narain Singh Bahadur, K.C.S.I., D. Litt within the meaning of Section 43 of the Indian income tax Act. In spite of proper service of the aforesaid notice Kunwar Bishwanath Singh failed to appear, nor was any communication received from him by post. The income tax Officer then passed an order treating Kunwar Bishwanath Singh as the agent of His Highness the Maharaja of Benares for the assessment year 1936-37 and in this reference we are concerned with that assessment year alone. It is conceded on all hands that a notice u/s 22(2) of the Act calling for a return must be issued within the assessment year, that is before the 31st of March, 1937, in the present case. The income tax Officer, however, could not issue an ordinary notice u/s 22(9) because by the time the record came to him from the Assistant Commissioner the financial year 1936-37 was over and he, therefore, issued notice u/s 34 read with Section 22 on the agent on the 23rd of February, 1938, that is within one year of the end of the year 1936-37. 4. In response to these notices the late Maharaja's agent filed a return of income and in response to further notices under Sections 23(2) and 22(4) made an appearance by counsel before the income tax Officer, who on the 1st of August, 1938, passed an order assessing Kunwar Bishwanath Singh, agent to His Highness the Maharaja of Benares, on an income of Rs. 40,908, which consisted, of Rs. 19,618 as income from property and Rs. 21,290 as income from "other sources". This latter income was made up among other things of a sum of Rs. 2,702 on account of zar-i-chaharum and Rs. 3,033 on account of Nazrana. 5. 40,908, which consisted, of Rs. 19,618 as income from property and Rs. 21,290 as income from "other sources". This latter income was made up among other things of a sum of Rs. 2,702 on account of zar-i-chaharum and Rs. 3,033 on account of Nazrana. 5. An appeal against this order was preferred before the Assistant Commissioner of income tax, who dismissed it on the 22nd of September, 1938. The Assessee Kunwar Bishwanath Singh then applied to the Commissioner for reference to this Court u/s 66(2) of the Act. Five questions of law were formulated in the application which are mentioned at page 11 of the printed statement of the case. 6. Questions Nos. 2 and 3 were not referred to us and a separate application u/s 66(3) was filed before us and it was prayed that we should require the Commissioner to state a case on those two questions as well, but we have rejected that application. The Commissioner, however, referred questions Nos. 1, 4 and 6 with some verbal alterations to us. 7. The first question which the Assessee wanted to be referred to us was: Whether the notice dated the 8 3rd February, 1938, alleged to have been issued u/s 34 of the Indian income tax Act was invalid. 8. When the matter was before the Assistant Commissioner, a plea was taken there to the effect that the notice purporting to have been issued u/s 22 and Section 34 was invalid, illegal and ultra vires. These two pleas challenged the validity of the notices on all possible grounds on which it could be challenged, but the learned Commissioner has referred the question of law arising out of this plea in the following terms: Whether the notice dated the 23rd February, 1938, issued to Kuwar Bishwanath Singh was valid in law in view of the decision of the Calcutta High Court in the case of Messrs. Mahaliram Ramjidas? 9. Learned Counsel for the Assessee contended at the very outset that the learned Commissioner ought not to have limited the scope of the first question inasmuch as the notice was challenged not only on the basis of the decision of the Calcutta High Court just referred to but on other grounds as well. Mahaliram Ramjidas? 9. Learned Counsel for the Assessee contended at the very outset that the learned Commissioner ought not to have limited the scope of the first question inasmuch as the notice was challenged not only on the basis of the decision of the Calcutta High Court just referred to but on other grounds as well. Learned Counsel for the referor has drawn our attention to the appellate order of the Assistant Commissioner and has said that the only-contention which was advanced before the Assistant Commissioner was a contention based on the Calcutta case of In Re: Mahaliram Ramjeedas, AIR 1938 Cal 557 and he has drawn our attention to certain observations of their Lordships of the Privy Council in the Commissioner of income tax Bihar and Orissa v. Kameshwar Singh of Darbhanga 1933 AWR 2 74 at page 86 : 1933 ALJ 527 at page 537, where it is said: The duty of the High Court u/s 66(5) is to 'decide the questions of law raised' by the case referred to them by the Commissioner and it is for the Commissioner to state formally the questions which arise. Here the High Court itself formulated the question to be decided as being-- ...Whether the interest (i.e. the sum of Rs. 6,09,571 due as interest by the debtor) can be considered to have been received and assessable? Their Lordships deprecate this departure from regular procedure, but in the circumstances have not thought it proper to decline to express their view on the question thus informally presented. 10. The contention of the Learned Counsel for the Department, therefore, is that we should content ourselves by answering the question as referred by the Commissioner and should not frame the question ourselves. 11. We think that, if we make the alteration as suggested by Learned Counsel for the Assessee, we shall not be formulating any question ourselves, but only giving effect to the question that was raised by the Assessee throughout and to which effect was also given by the learned Commissioner in a limited manner. 11. We think that, if we make the alteration as suggested by Learned Counsel for the Assessee, we shall not be formulating any question ourselves, but only giving effect to the question that was raised by the Assessee throughout and to which effect was also given by the learned Commissioner in a limited manner. The Assistant Commissioner had before him the plea that the notice issued u/s 22 read with Section 34 was invalid, illegal and ultra vires and when ha proceeded to decide that plea he thought that the Learned Counsel for the Assessee meant by that plea that the income tax Officer had failed to make a preliminary enquiry as laid down by their Lordships of the High Court of Judicature at Calcutta In Re: Mahaliram Ramjeedas, AIR 1938 Cal 557 and it was only on that ground that the Assistant Commissioner repelled the general plea of the Assessee and he was of the opinion that the "income altogether escaped assessment". Mr. Banerji on behalf of the Assessee has contended that no income escaped assessment and it is on that ground also that the notice is being attacked. We think we are not attempting to do anything which might, even within the scope of the observations of their Lordships of the Privy Council, be considered to be irregular, but we are answering the question referred to us by the learned Commissioner without the imposition of the limitation contained in the phrase "in view of the decision of the Calcutta High Court in the case of In Re: Mahaliram Ramjeedas, AIR 1938 Cal 557 ". 12. The question that we propose to decide whether the notice dated the 23rd of February 1938, issued to Kunwar Bishwanath Singh was valid in law in view of the decision of the Calcutta High Court in the case of In Re: Mahaliram Ramjeedas, AIR 1938 Cal 557 or otherwise. We feel that the contention of the Assessee was general all along and the Assistant Commissioner noticed only the main argument advanced in this connection and might have ignored other arguments as being without substance. 13. We feel that the contention of the Assessee was general all along and the Assistant Commissioner noticed only the main argument advanced in this connection and might have ignored other arguments as being without substance. 13. It has been conceded by Learned Counsel for the Assessee that in view of the decision of their Lordships of the Privy Council in (1940) 8 ITR 442 (Privy Council) , it is not necessary for the Income tax Officer to hold a preliminary enquiry and to give the result of that enquiry (after convening and in the presence of the Assessee) on the question in the shape of a finding that the income has escaped assessment, but that if for any reason the income tax Officer holds the view that same income has escaped assessment a notice u/s 34 can be issued. What is, however, contended is that income in the present case has not escaped assessment and reliance in the main is placed on the case of Sir Rajendra Nath Mukerjee v. Commr. of Income Tax, (1934) 61 Ind App 10, AIR 1934 PC 30 more particularly on the passage which occurs at page 290 et seq. The facts of the Privy Council case may be stated. There were two firms, Burn and Company and Martin and Company The partners of Martin and Company as individuals purchased the shares of the partners of Burn and Company and thus became owners of Burn and Company but the partners had not purchased the business of Burn and Company with funds belonging to Martin and Co but with other funds belonging to themselves as individuals. A notice was issued to Bum and Co, calling for a return of their total (sic) and a notice was also issued to Martin and Company The returns were made by both firms, but (sic) and Company made a note that they should not he assessed but their income should be included in the income of Martin and Company The income tax Officer combined the incomes of Burn and Company and Martin and Company and assessed them as one on the return made by Martin and Company The return made by Burn and Company was not made the subject of any assessment order. The High Court held that this was illegal and therefore the assessment order passed on Martin and Company was revised by the income tax authorities and the income of Burn and Company was omitted. The income tax authorities then proceeded to assess the income of Burn and Company without taking any action u/s 34, merely treating the assessment as not having been completed and proceeded therefore u/s 23. When the assessment had been made on Burn and Company, they appealed to the Assistant Commissioner, who rejected the appeal and confirmed the assessment. They then asked for a reference u/s 66(2) The High Court held that the income tax Officer could proceed u/s 23(1) and it was not correct that the income had escaped assessment and that therefore the only remedy left to the income tax authorities was to proceed u/s 34. The Assessee, Burn and Company, then appealed to their Lordships of the Privy Council and the passage to which we have referred to above summarizes the argument of the Assessee and the view of their Lordships. Their Lordships say: The Appellants, however, submit that this is a case of income escaping assessment within the meaning of Section 34. Assessment, they argue, is a definite act, indeed the most critical act in the process of taxaction. If an assessment is not made on income within the tax year, then that income, they submit, has escaped assessment within that year and can be subsequently assessed only u/s 34 with its tune limitation. This involves reading the expression 'has escaped assessment' as equivalent to 'has not been assessed'. Their Lordships cannot assent to this reading. It gives too narrow a meaning to the word 'assessment' and too wide a meaning to the word 'escaped'. That the word 'assessment' is not confined in the statute to the definite act of making an order of assessment appears from Section 66 which refers to 'the course of any assessment'. To say that the income of Burn and Company which in January, 1928, was returned for assessment and which was accepted as correctly returned, though it was erroneously included in the assessment of Martin and Company, has 'escaped' assessment in 1927-28 seems to their Lordships an inadmissible reading. To say that the income of Burn and Company which in January, 1928, was returned for assessment and which was accepted as correctly returned, though it was erroneously included in the assessment of Martin and Company, has 'escaped' assessment in 1927-28 seems to their Lordships an inadmissible reading. The fact that Section 34 requires a notice to be served calling for a return of income which has escaped assessment strongly suggests that income, which has already been duly returned for assessment, cannot be said to have 'escaped' assessment within the statutory meaning. 14. We have for ourselves italicised the word 'duly' and we think some importance is to be attacked to that word We think it was argued for the Assessee Burn and Company that, since there had been no assessment order in respect to that income during the year of assessment, their income had 'escaped' assessment and then assessment u/s 34 alone could be made subsequently, subject to its time limit. The Privy Council repelled that argument. They held that since Burn and Company had duly made a return of their income in response to a notice it could not be said that their income had escaped assessment within the statutory meaning. Their Lordships then went on to say that they found themselves in agreement with the view expressed in In re. Lachhiram Basantlal (1930) 58 Cal 909 : AIR Cal 545 by the learned Chief Justice (Rankin) : 'Income has not escaped assessment if there are pending at the time proceedings for the assessment of the Assessees' income which have not yet terminated in a final assessment thereof. 15. It will thus appear that their Lordships were of the opinion that the assessment of Burn and Company was pending all along and there was no necessity to issue a notice u/s 34. They further observed: It may be that, if no notice, calling for a return u/s 22, is issued within the tax year, then Section 34 provides the only means available to the Crown of remedying the omission, but that is a different matter. 16. They further observed: It may be that, if no notice, calling for a return u/s 22, is issued within the tax year, then Section 34 provides the only means available to the Crown of remedying the omission, but that is a different matter. 16. Learned Counsel for the Department has argued that in the present case no notice had been issued to the Assessee, but a notice had been issued to the Maharaja, who was not the Assessee and on whom notice could not be Issued by reason of Sections 42 and 43 of the Indian Income Tax Act and the return that was filed by the late Maharaja was not a due return, that the notice was invalid and the assessment, if any, was invalid--which assessment was of course set aside by the Assistant Commissioner and the position, therefore, is that there had been no notice, no return and no assessment and the case comes within the observations of their Lordships when they say that if no notice calling for a return u/s 22 is issued within the tax year, then Section 34 provides the only means available to the Crown of remedying the omission. 17. It was argued on behalf of the Assessee, relying on the case of AIR 1933 284 (Lahore) , that it was impossible to hold, on the facts of the persent case, that the income had escaped assessment. We might mention that this case has been overruled by the Full Bench case of the Lahore High Court itself in AIR 1935 742 (Lahore) , where the entire case law on the subject his been reviewed and where the two learned Judges of the Court who formed the majority had expressed their opinion as to the true scope of the meaning of the passage which we have quoted. 18. 18. It is not necessary for us to say anything more than what we have already said in this connection except to point out emphatically that in the present case we hold the view, a view supported by our decision in an earlier case, to which we shall refer presently, that the former notice issued to His Highness the Maharaja was not a notice within the meaning of Section 22(2) and the return filed by the Maharaja was not a due return and the assessment proceedings were started in illegality and conducted in illegality and irregularity and the entire proceedings were void from start to finish; and as their Lordships point out in the case of Commissioner of income tax v. Khemchand Ramdas 1938 AWR (PC) 163 : 1938 ALJ 754, the word 'assessment' is used in income tax Act as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the tax-payer. In our judgment, the whole procedure adopted by the income tax Officer oh the former occasion was illegal and irregular and income had escaped assessment so far as the Assessee was concerned. We might at this stage quote usefully from what we said when the earlier reference came to us at the instance of His Highness the Maharaja of Benares, in the case reported in Maharaja of Benares v. Commissioner of income tax 1938 AWR (HC) 247 : 1938 ALJ 34. We said: It will be seen that the word 'agent' for the purposes of Section 42 has a wider scope than it has in ordinary use...when the agent in British India is invested with the character of Assessee in the mandatory terms which we find in Section 42(1) and to the apparent exclusion of the principal, it would seem to follow that the non-resident principal is divested of that character.... It appears to us that in the case of a person residing out of British India who has property or business connections in British India, the income tax authorities are not competent to serve notices upon him; such notices must be served upon his agent in British India or upon such person as may be deemed to be his agent within the meaning of Section 43 and who will be treated as such. The proviso to Section 42 does not, to our minds, militate against the view that we have taken and does not support the opinion of the Commissioner that it is open to the income tax Officer to address notices direct to the Assessee even though he be a nonresident. 19. We differed in this respect from the view taken by the learned Judges of the Madras High Court in the The Deputy Commissioner and Secretary of the Chief Commissioner of Income Tax Vs. Bhanjee Ramjee and Co., AIR 1921 Mad 212 . At the instance of His Highness and invited by him we took the view that the notice issued to him was wholly illegal and it comes with ill grace from the mouth of his agent that the former notice and the former proceedings which culminated in the assessment order could be considered for any purposes whatsoever and that the income of the Assessee did not escape assessment within the meaning of that expression in Section 34 of the Act. We are, therefore, of the opinion I that the notice dated the 23rd of February, 1938, issued to Kunwar Bishwanath Singh was valid in law and we answer the first question in the affirmative. 20. The second question is: Whether the income from nazrana and from zar-i-chaharum was 'agricultural income' within the meaning of Section 2(1) of the Act? 21. Learned Counsel for the Assessee had to concede and indeed it is not open to argument, that the income derived from zar-i-chaharum was not agricultural income. Zar-i-chaharum is one-fourth of the sale price of houses when houses are transferred by one person to another and according to custom His Highness is entitled to this one-fourth of the sale price. This can in no sense be called agricultural income and would not therefore be exempt. This settles the matter so far as the sum of Rs. 2,702 is concerned. There is, however, another sum, namely Rs. 3,033 on account of nazrana and it was contended on behalf of the Assessee that this nazrana represented not only sums received from persons to whom building permission had been accorded by the State but sums from cultivatory tenants to whom land had been let out. We, however, find that nowhere was it pleaded on behalf of the Assessee that the sum of Rs. 3,033 included the nazrana received from cultivatory tenants. We, however, find that nowhere was it pleaded on behalf of the Assessee that the sum of Rs. 3,033 included the nazrana received from cultivatory tenants. The Assistant Commissioner held that the nazara in the present case meant the consideration received for granting permission to a person to build a house on a plot of land and the Commissioner also said in the statement of the case, that this was a customary fee taken by the Maharaja for permission to build houses on lands owned by him. None of these sources of income can, therefore, be said to come under agricultural income and they were, therefore, ' rightly taxed by the Department. 22. Our answer to question No. 2 is in the negative. 23. We now propose to consider question No. 3 It runs as follows: Whether the fact that the late His Highness the Maharaja of Benares was a Ruling Chief of an Indian State exempted him from taxation under the Act in respect of income from property owned by him in British India? 24. When this case was before us on the 4th of October, 1940, we passed the following order: One of the questions that has been referred to us in this case by the learned Commissioner of income tax, Central and United Provinces, for our decision is whether the fact that the late His Highness the Maharaja of Benares was a ruling Chief of an Indian State exempted him from taxation under the Act in respect of income from property owned by him in British India and Learned Counsel for the Assessee at the very threshold of the discussion on this point drew our attention to the case of Duff Development Company v. Kelantan Government 1924 LR AC 797 and pointed out that in matters like these there was a well established practice and we should follow the same. In that case Viscount Cave, after stating the facts, observed as follows: First, it was argued that the Government of Kelantan was not an independent sovereign State, so as to be entitled by international law to the immunity against legal process which was defined in the Parlement Beige (5 P.D. 197). In that case Viscount Cave, after stating the facts, observed as follows: First, it was argued that the Government of Kelantan was not an independent sovereign State, so as to be entitled by international law to the immunity against legal process which was defined in the Parlement Beige (5 P.D. 197). It has for some time been the practice of our Courts, when such a question is raised, to take judicial notice of the sovereignty of State and for that purpose (in any case of uncertainty) to seek information from a Secretary of State; and when information is so obtained the Court does not permit it to be questioned by the parties. Information of this character was obtained from a Secretary of State and accepted without question in Taylor v. Barclay 2 Sim. 213 and Mighell v. Sultan of Johore (sic) 894, 1 Q.B. 149 and those cases were followed in Foster v. Globe Venture Syndicate 1909 1 Ch. 811 and in The Gagara 1919 p. 95. In the present case the requisite inquiry was addressed by Master Jelf (while the summons to enforce the award was pending before him) to the Secretary of State for the Colonies (an answer was received from the Under Secretary) 25. It is submitted before us that we should also enquire from the Political Department about the exact status of His Highness the late Maharaja of Benares and after taking judicial notice of the fact determine the question as to how far under international law certain privileges can be extended to His Highness the Maharaja of Benares. We, therefore, direct the Registrar of this Court to write a letter to the Political Secretary to the Government of India to let us have an answer to the following question: Was His Highness the late Maharaja of Benares recognised by the Government of India as the ruler of a sovereign State?. While answering the question the Political Secretary may care to study the English case to which reference has already been made and more particularly what has been said at page 814 of the Reports. The case will be listed before us on receipt of the reply. 26. While answering the question the Political Secretary may care to study the English case to which reference has already been made and more particularly what has been said at page 814 of the Reports. The case will be listed before us on receipt of the reply. 26. In reply to the letter sent by the Registrar of this Court the Secretary to His Excellency the Crown Representative has sent the following certificate in connection with the status of Captain His late Highness Maharaja Sir Aditya Narayan Singh Bahadur, K.C.S.I., Maharaja of Benares: Captain His late Highness Maharja Sir Aditya Narayan Singh Bahadur, K.C.S.I., Maharaja of Benares, had been recognised by His Majesty as the Ruler of the Indian State of Benares. His Majesty's Government did not regard or treat His Highness or his subjects as subjects of His Majesty and they did not regard or treat Benares State as being part of British India or of His Majesty's dominions. Benares is an Indian State and the late Maharaja was a Ruler as defined in Sub-section (1) of Section 311 of the Government of India Act, 1935. But, though His late Highness was thus not independent, His Majesty's Government accorded to him the status of a sovereign Ruler under the suzerainty of His Majesty exercised through His Majesty's Representative for the exercise of the functions of the Crown in its relations with Indian States. As such he possessed various attributes of sovereignty, including internal sovereignty, which was not derived from British Law, but was inherent in the Ruler; subject, however, to the suzerainty of His Majesty and to the exercise by His Majsty's Representative of such rights, authority and jurisdiction as had by treaty, grant, usage, sufference, or otherwise, passed to and were exercisable by His Majesty. These included the conduct of international relations, the exercise of jurisdiction over Europeans and Americans, interference to settle disputes as to succession to the State the suppression of gross misrule in the State and the regulation of armaments and the strength of military forces. The late Maharaja was, in regard to proceedings in the civil Courts in India, covered by the provisions of Sections 85 and 86 of the Indian Code of Civil Procedure. 27. The late Maharaja was, in regard to proceedings in the civil Courts in India, covered by the provisions of Sections 85 and 86 of the Indian Code of Civil Procedure. 27. Our attention has also been drawn by the learned Advocate General to the Instrument of Transfer dated 1st April, 1911, by which certain powers were conferred on the Maharaja (this Instrument of Transfer is to be found at page 89 in Vol. II of Aitchison's Treaties Engagements and Sanads). By this Instrument of Transfer Parganas Bhadohi and Kera Mangraur of the Family Domains of the Raja of Benares at present administered by the British Government, as well as the tract (comprising the Fort of Ramnagar and its appurtenances) defined in the Schedule to the Instrument, were constituted as a State under the suzerainty of His Majesty and granted in that condition to the Rajas of Benares under such restrictions and conditions as may be necessary for safeguarding to the residents of those territories the rights and privileges they had enjoyed under the British administration and whereas the said Maharaja was established as a Ruling Chief with full powers in the said territories subject to the suzerainty of His Majesty it was declared by paragraph 26 of the Instrument Within the other estates now in possession of His Highness Sir Prabhu Narayan Singh, G.C.I.E., which are outside the State of Benares, he shall continue to have the status and responsibilities of a landholder under the ordinary law and within the pargana of Kaswar Raja he shall assume that status and those responsibilities. 28. When an earlier reference which is reported as Maharajah of Benares v. Commissioner of income tax 1938 AWR (HC) 247 : 1938 ALJ 34 was before us, it was conceded before the Assistant Commissioner of income tax that the property and the sources of income which formed the subject matter of the contested assessment belonged personally to His Highness the Maharaja and were not part of the State of which he was the Ruler. Mr. Banerji on behalf of the Assessee submitted that any concession made on the former occasion could not be made applicable to the present assessment because the assessment year is different and the property may be different and further because the proceedings relating to assessment were not initiated properly on the former occasion. Mr. Banerji on behalf of the Assessee submitted that any concession made on the former occasion could not be made applicable to the present assessment because the assessment year is different and the property may be different and further because the proceedings relating to assessment were not initiated properly on the former occasion. We have not thought fit to remit an issue as to the nature of the property and it is not necessary to get a clear finding on the question as to whether the property from which income is derived and which is sought to be assessed belongs personally to His Highness or is a part of the State. It is conceded on behalf of the Department that income derived from properties owned by the State would be exempt, but it is said that in the present case the income was derived by His Highness in his personal capacity. We shall, therefore, answer the question referred to us on the assumption that the property which yields income in the present case is property belonging to the Maharaja in his personal capacity and is not property belonging to the State. Mr. Banerji then proceeded with his argument on the main question and drew our attention to Maxwell's Interpretation of Statutes, seventh edition page 127, where the learned author says: Under the same general presumption that the Legislature does not intend to exceed its jurisdiction, every statute is to be so interpreted and applied, as far as its language admits, as not to be inconsistent with the comity of nations, or with the established rules of international law. If therefore, it designs to effectuate any such subject, it must express its intention with irresistible clearness to induce a Court to believe that it entertained it, for if any other construction is possible, it would be adopted to avoid imputing such an intention to the Legislature. For instance, although foreigners are subject to the criminal law of the country in which they commit any breach of it and also, for most purposes, to its civil jurisdiction, a foreign sovereign, an ambassador, the troops of a foreign nation and its public property, are, by the law of nations, not ' subject to them and statutes would be read as tacitly embodying this rule. 29. He also quoted the case of Forbes v. Attorney General for Manitoba 1937 App. Cas. 29. He also quoted the case of Forbes v. Attorney General for Manitoba 1937 App. Cas. 260, where it was laid down at page 268 that an income tax was the most typical form of direct taxation and submitted that sovereigns had immunity from direct taxation. To support the latter submission several books on International law written by eminent authors were cited In Hall's International Law, eighth edition, at page 220 it is written that a sovereign, while within foreign territory, possesses immunity from all local jurisdiction in so far and for so long as he is there in his capacity of a sovereign. He cannot be proceeded against either in ordinary or extraordinary civil or criminal tribunals, he is exempted from payment of all dues and taxes, he is not subjected to police or other administrative regulations, his house cannot be entered by the authorities of the State and the members of his suite enjoy the same personal immunity as himself. 30. Holland in his lectures on International law observes at page 201: An Ambassador is exempt from taxation and also from customs dues; by right as to property held in his representative capacity and by courtesy as to property held otherwise. 31. It is contended that if an ambassador is exempt from taxation not only with respect to property held in his representative capacity but also with respect to property held otherwise, a sovereign is all the more so exempt. The passage in Holland is based upon another passage in Hall's International law at page 235 where the learned author says: The person of a diplomatic agent, his personal effects and the property belonging to him as representative of his sovereign, are not subject to taxation. Otherwise he enjoys no exemption from taxes or duties as of right. By courtesy however, most, if not all, nations, permit the entry free of duty of goods intended for his private use. 31. Oppenheim in his book on International law, Vol. I, fifth edition at page 590 says: He (meaning a sovereign) must be granted so-called exterritoriality conformably with, the principle, par in parem non habet imperium according to which one sovereign cannot have any power over another sovereign. He must, therefore, in every point he exempt from taxation, rating and every fiscal regulation and likewise from civil jurisdiction, except when he himself is the Plaintiff. 32. He must, therefore, in every point he exempt from taxation, rating and every fiscal regulation and likewise from civil jurisdiction, except when he himself is the Plaintiff. 32. Later on where the various privileges of diplomatic envoys are discussed, at page 626 the fifth privilege of an envoy in reference to his exterritoriality is said to be exemption from taxes and the like. Our attention is also drawn to the case of The Parlement Belge 5 Probate Division 197 where it was held that as a consequence of the absolute independence of every sovereign authority and of the international comity which induces every sovereign state to respect the independence of every other sovereign state, each state declines to exercise by means of any of its Courts any of its territorial jurisdiction over the person of any sovereign or ambassador, or over the public property of any state which is destined to its public use, or over the property of any ambassador, though such sovereign, ambassador, or property be within its territory. 33. The point and force of the above principle was explained at page 210 and it was said: ...that the public property of every state, being destined to public uses, cannot with reason be submitted to the jurisdiction of the Courts of such state, because such jurisdiction, if exercised, must divert the public property from its destined public uses; and that, by international comity, which acknowledges the equality of states, if such immunity, grounded on such reasons, exist in each state with regard to its own public property, the same immunity must be granted by each state to similar property of all other states. The dignity and independence of each state require this reciprocity. 34. It was contended on behalf of the Assessee that no privilege was being claimed for the property, in which case the question whether the property was the property of the State or the personal property of the Ruler might be relevant, but the privilege was being claimed for the person of the Ruler who was claiming immunity from the procedure by which an attempt was made to levy direct taxation on him. 35. 35. We are not called upon to give a decision on the question of what would happen in the case of an independent sovereign Ruler when the authorities cited on behalf of the Assessee and the argument of the learned Advocate General that u/s 3 and Section 4 of the Indian income tax Act income and not the person is taxed might have to be seriously considered, but we have to deal with the income which the Maharaja of Benares receives from property in British India and the letter from the Secretary to his Excellency the Crown Representative and the Instrument of Transfer to which reference has been made in an earlier portion of our judgment make it clear that His Highness cannot claim the immunity which an independent sovereign might claim. Although His Majesty's Government did not regard or treat His Highness or his subjects as subjects of his Majesty and although they did not regard or treat Benares State as being part of British India or of his Majesty's dominions, yet his Status was that of a sovereign Ruler under the suzerainty of His Majesty and His Majesty's Representative exercised certain rights including the conduct of international relations, the exercise of jurisdiction over Europeans and Americans, interference to settle disputes as to succession to the State, the suppression of gross mis-rule in the State and the regulation of armaments and the strength of military forces and it was specifically recognized that His late Highness was "not independent". The exercise of rights mentioned above by the suzerain State is inconsistent with the idea of sovereignty in the state over which the suzerainty is exercised. As Oppenheim at page 165 in his book says: Suzerainty is a term which was originally used for the relation between the feudal lord and his vassal; the lord was said to be the suzerain of the vassal. But although such suzerainty has disappeared, modern suzerainty involves only a few rights of the suzerain State over the vassal State and such rights are principally international rights, it being a kind of international guardianship. But although such suzerainty has disappeared, modern suzerainty involves only a few rights of the suzerain State over the vassal State and such rights are principally international rights, it being a kind of international guardianship. A distinction is drawn by Oppenheim between vassal States and protected States and Oppenheim says that when a weak State surrenders itself by treaty into the protection of a strong and mighty State in such a way that it transfers the management of all its more important international affairs to the protecting State then an international union is called into existence between the two States and the relation between them is called protectorate and that learned author is of the opinion that the position of the Indian States to great Britain is like that of vassal States which have no international relations whatever either between themselves or with foreign States (pp. 165 and 166). Hall, however, is of the opinion that the States in the Indian Empire of great Britain are protected States, but even then, according to him, "they are not subjects of international law". He says at page 28: Indian native states are theoretically in possession of internal sovereignty and their relations to the British Empire are in all cases more or less defined by treaty; but in matters not provided for by treaty a 'residuary jurisdiction' on the part of the Imperial Government is considered to exist and the treaties themselves are subject to the reservation that they may be disregarded when the supreme interests of the Empire are involved, or even when the interests of the subjects of the native princes are gravely affected. The treaties really amount to little more than statements of limitations which the Imperial Government, except in very exceptional circumstances, places on its own action. No doubt this was not the original intention of many of the treaties, but the conditions of English sovereignty in India have greatly changed since these were concluded and the modifications of their effect which the changed conditions have rendered necessary are throughly well understood and acknowledged. 36. No doubt this was not the original intention of many of the treaties, but the conditions of English sovereignty in India have greatly changed since these were concluded and the modifications of their effect which the changed conditions have rendered necessary are throughly well understood and acknowledged. 36. In Section 26 of the Instrument of Transfer it is distinctly mentioned that in the other estates in possession of His Highness which are outside the State of Benares--and presumably the income derived in the present case which is sought to be assessed is from such estates--he shall continue to have the status and responsibilities of a landholder under the ordinary law and this implies that for such estates he shall be subject to the payment of land revenue etc. 37. It is, therefore, not possible to give to His Highness the same immunity from taxation which might be possessed by other independent sovereign Rulers. 38. It was mentioned in the certificate of the Secretary in the Political Department that His Highness was a Ruler as defined in Sub-section (1) of Section 311 of the Government of India Act, 1935 and although Federation has not come in yet, some indication of the status and rights of His Highness is afforded from Section 155 of the Government of India Act. Sub-section (1) Clause (b) provides that a Ruler shall not be exempt from any Federal taxation in respect of any lands, buildings or income being his personal property or personal income. 39. u/s 60 of the Indian income tax Act the Central Government may, by notification in the Gazette of India, make an exemption, reduction in rate or other modification, in respect of income tax in favour of any class of income, or in regard to the whole or any part of the income of any class of persons and the Finance Department Notification No. 878-F. (Income tax), dated the 21st of March, 1922, as amended or added to from time to time, does not exempt the income derived by Ruling Chiefs and princes of India from their private property. Nothing would have been easier than to make a provision to that effect just as the interest on Government securities held by, or on behalf of, Ruling Chiefs and Princes of India as their private property has been exempted at No. 8 of the various exemptions. Nothing would have been easier than to make a provision to that effect just as the interest on Government securities held by, or on behalf of, Ruling Chiefs and Princes of India as their private property has been exempted at No. 8 of the various exemptions. In striking contrast we have No. 1 where the official salaries and fees which a representative or consular employee of a foreign State receives are exempt. 40. In our view question No. 3 ought to be answered in the negative and we answer accordingly. 41. The Assessee will have to pay the costs of this reference. The Advocate General is entitled to a fee of Rs. 200. Let a copy of our judgment be sent to the Commissioner of income tax under the seal of the Court and the signature of the Registrar.