HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Bihar & Orissa v. Patney & Co.
Civil Appeal No. 326 of 1957
[1959] Supp. (2) SCR 868 ·
Indian Income-tax Act, 1922: non-resident receipt; section 66(1)
Sources & disclosures includedDownload original judgment / order
3-judge bench · B. P. Sinha · J. L. Kapur · M. Hidayatullah
Assessment years: 1945-46
01 · Facts of the case
A Secunderabad non-resident earned commission of Rs.35,202 and Rs.5,302 from Madura and Bombay firms. Cheques posted in British India were received at Secunderabad under an express arrangement for payment there and treated as payment.
Source: Primary report: SCR 870–873
02 · Discussion by the Hon’ble Court
Posting constitutes receipt by the creditor where an express or implied authority makes the post office the creditor’s agent. Here the express place-of-payment agreement required receipt at Secunderabad; the Ogale Glass Works postal agency inference did not govern.
Source: Primary report: SCR 872–874
03 · Judicial decision
The commission was not received in British India on these facts; the High Court’s conclusion for the assessee was correct.
Source: Primary report: SCR 874
04 · Outcome / in whose favour
Revenue’s appeal was dismissed with costs.
Source: Primary report: SCR 874
05 · AKHB REVIEW POINT
The place of receipt depends on the payment agreement and conduct, not merely the bank or dispatch location. Preserve the express Secunderabad payment term when distinguishing postal-receipt cases. The territorial framework is historical.
Source: Primary report: SCR 873–874
Source & verification
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Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
Source checked 2026-10-23. Subsequent treatment and present-law applicability have not been comprehensively checked.
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