HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Andhra Pradesh v. H. E. H. Mir Osman Ali Khan
Civil Appeals Nos. 46-49 of 1964
[1966] 2 SCR 296 ·
Indian Income-tax Act, 1922: sections 3, 4, 8, 41, 60, 60A and 66(1) · Finance Act, 1950: sections 2 and 13 · Part B States (Taxation Concessions) Order, 1950 · Constitution of India: Articles 245, 246 and 372; Union List Entry 82
Sources & disclosures includedDownload original judgment / order
3-judge bench; unanimous judgment delivered by K. Subba Rao, J. · K. Subba Rao, J. · J. C. Shah, J. · S. M. Sikri, J.
Assessment years: 1950-51, 1951-52
01 · Facts of the case
After extension of the 1922 Act to Hyderabad, the former Nizam claimed covenant and international-law immunity, full Part B State relief, and exemptions for income-tax-free Hyderabad securities held directly and through two trusts (SCR pp.298-299; PDF pp.3-4).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
The covenant preserved personal privileges, not tax immunity; Hyderabad lacked the international personality necessary for sovereign immunity. Prior-year income became assessable after the charging extension. The concession order scaled rates rather than creating full exemption. Specified securities retained income-tax exemption through trusts, but the private-property condition for super-tax protection failed after transfer (SCR pp.299-316; PDF pp.4-21).
Source: Primary judgment: discussion
03 · Judicial decision
All four appeals were partly allowed and the reference answers modified issue by issue, with each side bearing its own costs in both courts (SCR pp.315-316; PDF pp.20-21).
Source: Primary judgment: decision
04 · Outcome / in whose favour
Mixed: Revenue won on general assessability and super-tax on trust-held securities; the assessee won the specified income-tax exemptions (SCR pp.309-316; PDF pp.14-21).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: separate charge, rate concession, personal privilege, security-specific exemption and representative assessment. Trust income may retain statutory character while a private-property condition can fail on transfer (based on SCR pp.309-316; PDF pp.14-21).
Source: Primary judgment: review point
Source & verification
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Statutory scope
The judgment applies abolished super-tax, historical princely-State arrangements and transitional instruments; it is not current immunity or trust-tax law.
Later treatment
Source checked 2026-10-11. Later judicial treatment and current statutory applicability have not been comprehensively checked; no current-law or citator clearance is represented.
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