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DCIT vs. Ford India Limited (ITAT Chennai)

COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: January 31, 2017 (Date of pronouncement)
DATE: March 17, 2017 (Date of publication)
AY: 2011-12, 2012-13
FILE: Click here to download the file in pdf format
CITATION:
Taxability of "Other income" under DTAA: Income which is not chargeable under specific provisions of Articles 6 to 21 cannot be taxed under the residuary provision. Only income not covered by specific Articles (e.g. alimony, lottery income, gambling income, damages etc) can be charged as "Other income"

(i) There is no dispute that there is no specific provision for taxation of fees for technical services in India Thailand tax treaty. There is also no dispute that Fuji Asia Co Ltd Thailand and Auto Alliance Co Ltd Thailand did not have any permanent establishments in India.

(ii) The stand of the Revenue, however, is that the income embedded in the amounts received by the assessee could anyway be taxed as ‘other income’ under the respective tax treaties. There is a decision of a coordinate bench of this Tribunal, in the case of DCIT VS TVS Electronics Ltd [(2012) 52 SOT 287 (Chennai)], which support this school of thought and holds that

“Admittedly, Chapter III of DTAA between India and Mauritius did not provide for taxing any fees paid for technical services. Only for a reason that DTAA is silent on a particular type of income, we cannot say that such income will automatically become business income of the recipient. In our opinion, when DTAA is silent on an aspect, the provisions of the Act has to be considered and applied.”

However, nothing turns on this decision as the principle laid down therein find favour with the jurisdictional High Court. In the case of Bangkok Glass Industries Pvt Ltd Vs ACIT [(2013) 257 CTR 356 (Mad)], Hon’ble Madras High Court rejected this school of thought and dealing with India Thailand tax treaty, which does not have FTS clause, rejected the claim of the revenue that even though the Thai entity did not have any PE in India and, for that reason this amount could not have taxed in India under article 7, FTS could be taxed as ‘other income’ under article 22. Their Lordships, in this context, also observed that, “Since the said income does not fall as miscellaneous income, the same cannot be brought under art. 22.” Of course, the question as to what really constitutes miscellaneous income, as visualized by Their Lordships, covered by Article 22 was left open- a question which we will endeavor to humbly address. As we deal with this aspect of the matter, and to explain the related principle in little more detail. Let us first take a look at the relevant treaty provision. The relevant treaty provisions are as follows:

ARTICLE 22- Other income

Items of income of a resident of a Contracting State, wherever arising, not expressly dealt with in the foregoing Articles may be taxed in that State. Such items of income may also be taxed in the Contracting State where the income arises.

(iii) To understand the scope of these treaty provisions, which are broadly in pari materia with the provisions of article 21 of UN Model Convention, we find guidance from the OECD Model Convention Commentary which states that

“The Article covers income of a class not expressly dealt with in the preceding articles (e.g. an alimony or a lottery income) as well as income from sources not expressly referred to therein (e.g. a rent paid by a resident of a Contracting State for the use of immovable property situated in a third State). The Article covers income arising in third States as well as income from a Contracting State”.

In other words, an income is of such a nature as, on satisfaction of conditions specified in the related provision, could be taxed under any of these specific treaty provisions, cannot be covered by this residuary clause. Take for example, income earned by a resident of a contracting state by carrying on business in the other contracting state. When, for example, article 5 provides that the income of resident of a contracting state, from carrying on business in the other contracting state, cannot be taxed in the source state unless such a resident has a permanent establishment in the other contracting state, i.e. source state, it cannot be open to the tax administration of source state to contend that even if it cannot be taxed as business income, it can be taxed as ‘other income’ nevertheless. It is important to bear in mind the import of expression ‘not expressly dealt with in the foregoing articles’. Similarly, if independent personal services cannot be taxed in the source state as minimum threshold limit of fixed base is not satisfied, such a treaty concession cannot be nullified by invoking article 21. When a particular nature of income is dealt with in the treaty provisions, and its taxability fails because of the conditions precedent to such taxability and as specified in that provision are not satisfied, that is the end of the road for taxability in the source state. It is also important to bear in mind the fact that article 21 states that it applies to the “items of income of a resident of a Contracting State, wherever arising, which are not expressly dealt with in the foregoing articles of this Agreement”. Therefore, it is not the fact of non taxability under the operative articles (i.e. article 6 to 21) which leads to taxability under residuary clause in article 22, but the fact of income of that nature being covered by those articles which can lead to taxability under article 22. There could be many such items of income which are not covered by these specific treaty provisions, such as alimony, lottery income, gambling income, rent paid by resident of a contracting state for the use of an immoveable property in a third state, and damages (other than for loss of income covered by specific provisions of the treaty) etc. This is how UN Model Convention Commentary, which is referred to earlier in this order, also explains the scope of this article. In our humble understanding, therefore, article 22 does not apply to items of income which can be taxed in any situations under article 6-21 whether or not such an income is actually taxable under these articles. The question then arises whether income earned by the recipients in question, i.e. Fuji Asia Co Ltd-Thailand ad Auto Alliance Co Ltd-Thailand, can be said to in the nature of an income which is not expressly dealt with by other operative articles (i.e. article 6 to 21) of the treaty. The income earned by these entities was in the regular course of their business, and there is no dispute about this fundamental aspect. There cannot also be dispute about the fact that in the event of these entities satisfying the conditions regarding existence of permanent establishment in India, the amounts so received by these entities would have been taxable as business income. The income in question is thus clearly dealt with by article 7 read with article 5 and the reason why it has not been taxed is that the entities concerned did not have permanent establishments in India. Clearly, therefore, the income in question is covered by the provisions of the Indo Thai tax treaty but is not taxable on the facts of the case before us as the recipients did not have a PE in India. Once we come to the conclusion that the income embedded in the payments in question is of such a nature which is covered by articles 6 to 21 of the treaty but is not taxable in India as the condition precedent for the taxability under the related article is not satisfied, it is an inevitable corollary of this finding that article 22 cannot be pressed into service in respect of the said income. As we hold so, we are alive to the fact that there is no specific taxability provision, under India Thailand tax treaty with respect to taxability of fees for technical services. Profits earned by rendering fees for technical services are only a species of business profits just as the profits any other economic activity. However, without the character of such receipts in the nature of business receipts being altered, the fee for technical services is dealt with separately in some treaties for the reason because, under those treaties the related contracting states proceed on the basis that even in the absence of the permanent establishment or fixed base requirements, the receipts of this nature can be taxed, on gross basis, at the agreed tax rate, and, to that extent, such receipts does not fall in line with the scheme of taxation of business profits under art. 7 and professional income under 14. It is interesting to note that the moment the threshold limits for permanent establishment or fixed base, as the case may be, is satisfied, the taxability shifts on net basis as business profits or professional (independent personal services) income. The business receipts or professional receipts thus cannot be seen in isolation with the fees for technical services. Its only the fact of, and mode of, taxation in the absence of PE or fixed base, which gets affected as a result of the fees for technical services. When there is an FTS clause, the FTS gets taxed even in the absence of the PE or the fixed base, but the character of FTS receipt is the same, i.e. business income or professional (independent personal) income, in the hands of the same. When there is no FTS clause, this sub categorization of income becomes irrelevant, because FTS or any other business receipt, the income embedded in such receipts gets taxed only if there is a permanent establishment or fixed base- as the case may be. The scope of business profit and independent personal service completely covers the fees for technical services as well. With FTS article or without FTS article, the income by way of fees of technical services continues to be dealt with the provisions of articles relating to business profits, independent personal services, and additionally, in the event of existence of an FTS article, with the article relating to the fees for technical services.

(iv) In view of the above discussions, in our considered view, even though the remittances in question are in the nature of fees for technical services in the hands of Thai entities, the income embedded in these remittances is not taxable in India in the hands of these entities, in terms of the provisions of Indo Thai tax treaty. The plea of the Assessing Officer, for invoking the domestic law provisions in respect of fees for technical services, as the Indo Thai tax treaty does not specifically deal with the same, already stands negated by Hon’ble jurisdictional High Court in the case of Bangkok Glass Industries (supra), in the context of Indo Thai tax treaty itself. It is only elementary that under article 90(2) where the Government has entered into a tax treaty with any tax jurisdiction, in relation to the assessee to whom such treaty applies, “the provisions of this (i.e. Income Tax) Act shall apply to the extent they are more beneficial to that assessee”. While on this issue, we may also take note of the landmark Special Bench decision in the case of Motorola Inc. vs. Dy. CIT [(2005) 96 TTJ (Del)(SB) 1] wherein the Tribunal had, inter alia, observed that “DTAA is only an alternate tax regime and not an exemption regime” and, therefore, “the burden is first on the Revenue to show that the assessee has a taxable income under the DTAA, and then the burden is on the assessee to show that that its income is exempt under DTAA”. Quite clearly, when there is no taxability under the respective treaty provisions, there cannot be any taxability under the provisions of the Income Tax Act either.

Re Taxability of fees for technical services under the “Make Available” requirement

(v) We have noted that even going by the case of the Assessing Officer, it is at best a case of payment of fees for technical services but then it is not even the case of the Assessing Officer that by rendition of these services, there was any transfer of technology in the sense that the recipient of service was enabled to render this service on his own without recourse to the service provider. There is no dispute that the recipient of these amounts are based in USA and UK and are entitled to the benefits of India US Double Taxation Avoidance Agreement [(1991) 187 ITR St 102; Indo US tax treaty, in short] and India UK Double Taxation Avoidance Agreement [(1994) 206 ITR (St) 235; Indo UK tax treaty, in short]. There is also no dispute that in both of these treaties, there is ‘make available’ requirement in the article dealing with taxation of fees for technical services. These treaty provisions are as follows:

India UK tax treaty Article 13: Royalty and fees for included services

4. For the purposes of paragraph 2 of this Article, and subject to paragraph 5, of this Article, the term “fees for technical services” means payments of any kind of any person in consideration for the rendering of any technical or consultancy services (including the provision of services of a technical or other personnel) which : (a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3(a) of this article is received; or (b) are ancillary and subsidiary to the enjoyment of the property for which a payment described in paragraph 3(b) of this Article is received; or (c) make available technical knowledge, experience, skill know-how or processes, or consist of the development and transfer of a technical plan or technical design.

Indo US tax treaty Article 12- Royalty and fees for included services

4. For purposes of this Article, “fees for included services” means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including through the provision of services of technical or other personnel) if such services: (a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3 is received; or (b) make available technical knowledge, experience, skill, know-how, or processes, or consist of the development and transfer of a technical plan or technical design. [Emphasis by underlining etc supplied by us]

(vi) We find that the common thread in both of these tax treaties is the requirement of ‘make available’ clause. As learned counsel rightly puts it, its not simply the rendition of a technical service which is sufficient to invoke the taxability of technical services under the make available clause. Additionally, there has to be a transfer of technology in the sense that the user of service should be enabled to do the same thing next time without recourse to the service provider. The services provided by non residents did not involve any transfer of technology. It is not even the case of the Assessing Officer that the services were such that the recipient of service was enabled to perform these services on its own without any further recourse to the service provider. It is in this context that we have to examine the scope of expression ‘make available’.

(vii) As for the connotations of make available clause in the treaty, this issue is no longer res integra. There are at least two non-jurisdictional High Court decisions, namely Honble Delhi High Court in the case of DIT Vs Guy Carpenter & Co Ltd ([(2012) 346 ITR 504 (Del)] and Honble Karnataka High Court in the case of CIT Vs De Beers India Pvt Ltd [(2012) 346 ITR 467 (Kar)] in favour of the assessee, and there is no contrary decision by Honble jurisdictional High Court or by Honble Supreme Court. In De Beers case (supra), Their Lordships posed the question, as to “what is meaning of make available”, to themselves, and proceeded to deal with it as follows: The technical or consultancy service rendered should be of such a nature that it “makes available” to the recipient technical knowledge, know-how and the like. The service should be aimed at and result in transmitting technical knowledge, etc., so that the payer of the service could derive an enduring benefit and utilize the knowledge or know-how on his own in future without the aid of the service provider. In other words, to fit into the terminology “making available”, the technical knowledge, skill?, etc., must remain with the person receiving the services even after the particular contract comes to an end. It is not enough that the services offered are the product of intense technological effort and a lot of technical knowledge and experience of the service provider have gone into it. The technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider. Technology will be considered “made available” when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service that may require technical knowledge, skills, etc., does not mean that technology is made available to the person purchasing the service, within the meaning of paragraph (4)(b). Similarly, the use of a product which embodies technology shall not per se be considered to make the technology available. In other words, payment of consideration would be regarded as “fee for technical/included services” only if the twin test of rendering services and making technical knowledge available at the same time is satisfied. As we have noted earlier, it is not even the case of the Assessing Officer that the assessee, i.e. recipient of services, was enabled to use these services in future without recourse to the service providers. The tests laid down by Hon’ble Court were clearly not satisfied. For this short reason alone, the amounts in question were not taxable as fees for technical services under the provisions of the respective tax treaties. The law is well settled, we may add at the cost of repetition, that under article 90(2) where the Government has entered into a tax treaty with any tax jurisdiction, in relation to the assessee to whom such treaty applies, “the provisions of this (i.e. Income Tax) Act shall apply to the extent they are more beneficial to that assessee”. When the amounts are not taxable under the provisions of the respective tax treaties, there cannot be any occasion to deal with the provisions of the Income Tax Act.

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One comment on “DCIT vs. Ford India Limited (ITAT Chennai)
  1. true,

    i find after Simon commission review of the working of 1919 govt of india Act govt of India Act 1935 came yet no indian delegate accepted 1935 Act when so how come we are using taxation Acts of British era again mangled by india law makers –

    read my detailed article….on simon commission review of govt of india act 1915…

    Poltical movements since Autum 1927(-1938) – Round Table conferences – and Sir John Simon to review the Government of India Act 1919, leading to the Government of India Act of 1935, ( From recoded historical archives available) –
    Professor Emeritus Dr Guru Balakrishnan, (on Constitutional histoty of India)

    No Indian was associated with with Sir John Simon Commission sent by British Government in England in 1927, – that erupted ‘Black flag demonstrations’; ‘Mobs shouted, full throat – ‘Simon go back’.

    Muslim League also resolved and boycotted the Commission’ deliberations –
    Also Indian National Congress joined with Muslim League.

    The Simon Commission visited India of British Government ‘to Review the Working of the Government of India Act 1919;

    When Commission landed, ‘in many places, the British Police had forcibly to disperse ‘mobs’; at one such ‘melee’ in Lahore, Lala Lajpat Rai was injured. It was popularly believed that the ‘Lala ‘ had been ‘assaulted’, by inspector Saunders of Punjab Police.

    Later Saunders was shot dead. Thre young men -Bhagat Singh, Raj Guru, and Sukhdev , were convicted, of the murder and Executed on March 29, 1931.

    Bhagat Singh became the ‘Most famous Hero’ of all terrorists, in the annals of Indian Revolutiory History, Mahatma Gandhi wrote, ‘there has never been, within the living memory, so much ‘romance round any life, as has surrounded any life , that of Bhagat Singh’.

    Punjab Legislative Council nominated a committe under chairmanship of Sikandar Hayat Khan with ‘Ujjal Singh as Secretary ( an Arora of Shapur district – ownerd large estates in Multan district); he was elected to Punjab Legislative Council in 1926, was a ‘finance minister’ in Sachar government, and remained in the ‘hub of ‘Sikh politics’ till 1955. He was also nominated as Governor of the Punjab, thereafter.

    Ujjal Singh was the secretary to Punjab Legislative Council, under chairmanship of Sikhandar Hayat Khan furnished ‘evidence’* to the Simon Commission that came to review the working of Government of India Act of 1919) ;

    *‘A memorandum of Sikh representation, was presented to the Simon Commission, ( signatories – Shivdev Singh Oberoi (president of of Chief Khalsa Diwan – , and a member of States; Harbans Singh Attari, secretary of Chief Khalsa Diwan), Raghbir Singh Sandhawalia, Sunder Singh Majithia, and Mohan Singh Rais of Rawalpindi’.

    **submitted a report of evidence to the commission – it reads:

    ‘While ‘anxious’ to maintain their individuality, as a ‘separate community the Sikhs are always ready to cooperate with
    their sister communities for the development of a United Nation.

    They would, therefore, be first, to welcome a ‘Declaration that:

    ‘No considertions of castes and religion shall affect the matter of organization of a ‘National Government’,in the country’.
    They are prepared to ‘stand on Merit alone’;
    provided they , in common with others, are permitted to grow ‘unhampered by any impediments’,- in the way of Reservations for ‘any’ community’; (ibid).

    ‘If however, ‘separate representation was to continue, the memorandum demanded that in the Punjab Legislative communal proportions should be fixed as follows : 40% Muslim, 30% Hindu 30% Sikh.’

    ‘Claim was made for Sikh representation in Sindh (if it was to made into a separate province) , Delhi,, and NWFP.’

    while, the commission was at work, the Indian National Congress (INC) tried once more (as in 1916) to present the British Government, with a ‘Draft Constitution’ ageeable to Indians .

    In February, 1928, , itcalled a conference, of members of all important political parties , ‘to consider and determine the’principles of the constitution for India’, .

    The ‘major moving spirit’, behind the confernce was Mr. Motilal Nehru himself duly assisted by Mr. Jawaharlal Nehru as his Secretary –

    Slkhs were represented by Mangal Singh Gill .

    Nehru report recommended, – “the ‘abolision of separate electorates”; but ‘agreed to resevation of seats’ for Muslims, at the center, and in the provinces. ‘- In which they (Muslims) were a minority’; the only other people to whom, ‘this concession’ was recommended were ‘non – Muslims on NWFP.

    Mangal Singh did not ‘press’ for ‘special rights’ for his community in his home state or at the centre.

    (‘The committe met for over two months. At first, Mangal Singh, insisted, that, if the Muslims were given ‘separate rights’ , the Sikhs would ask (insist) for 1/3rd representation in the Punjab and 5% at the centre (union government).

    And, ‘if weightage was abolished , he would accept representation, ‘on the basis of, ‘of population’, with the right to contest other seats.

    The final decision to ‘give up’ all ‘communal representation’ was taken under the ‘inspiration of Dr. Ansari. ( Mangal was interviewd by Kushwant Singh Gill ).

    Indeed, ‘The Nehru report’ was an impressive exercise in political bargaining.

    Muslims took scant notice of it; and Sikhs rejected the report.

    One group led by Baba Kharak Singh was so angered by Nehru report that it severed its connection with Indian National Congress.

    Others led byMaster Tara Singh though equally emphatic in their rejection of the proposals but decided to continue their links with Congress; and so remained, in the mainsstream of National politics.

    Nehru report went into the National Archives of Congress Party . (yet it is ‘vibrant’.)

    [ (Mr. VP Singh ‘clever’ idea of ‘caste politics’, obviously cannot surface; but it surfaced, just because after Nehrus he was after all wanted to show his face, as some ‘or’ else, (like Dr.B.R. Ambedkar who played in Poona Pact with Gandhiji, for ‘Dalits’;) his untenable ‘caste idea’ would have been buried like Nehru Report in Archives too.

    He tried to revitalize the Mondal reports(full of make believe statistics relied) after PM Mr. Morarji Bhai’ shelved the Mondal Report when it is already over, by his covert methods of misusing the ‘most reliable caste report statistics ’- ( Mondal managed to create, (perhaps covertly) though Morarji Bhai correctly shelved that most useless report, it again showed up; ‘none ever questioned’ but caste mongers perpetuated, is a hard fact, one can never forgive – that led to ‘creamy layer’ idea when very poor brothers of thecastes still suffer without any jobs or some meaningful income in the ever growing most unreliable economy, where day by day every commodity price zooms thanks to successive governments even today in the so called “Modiraj’ now; (people are folled to=ime and again – people groaning under price pressure on essential commodities).]

    Purposely, the ‘Devious’ ‘Simon Commission’ was still then drafting its ‘proposals’,when Lord Irwin announced that ‘in a conference of Representatives’ (specifically to defraud Indians) by the British India which wanted to keep Indians ever ‘divided’; and the conference for the Indian States would be convened in London to discuss the question of granting ‘Dominion Status to Indians.

    (part I)(two parts article)
    Indian National Congress asked for a ‘Declaration – the conference would frame a Constitution for India.; and not merely discuss , ‘when or how? It was to be granted. But objective of conservative government under MacDonald to divide Indians in one way or the other,essentially.

    No such ‘Declaration’, was forthcoming., then.

    Congress decided to abstain from the conference deliberations, and its various sessions in December 1929, at Lahore session (now in Pakistan) passed a ‘Resolution’ in favour of complete ‘Independence’ for India;

    Political opinion in England hardened against ‘Nationalists’-(after all suddenly losing grip on India would be a very costly venture for England, besides disastrous for british revenue generation from India)

    March 1930 saw the ‘Simon Commission’ made its Report (after Mahatma Gandhi launched a campaign to break the law by getting into manufacture of ‘Salt’, which was government’s monopoly.

    Gandhi and most others in National leadership were imprisoned.

    Thus the situation led to ‘ the most important Indian Political party was unrepresented at the Conference held at London.)

    Report proposed a ‘federal constitution’ with bicameral legislatures at the centre (Union government);
    and autonomy is granted for the ‘constituent provinces’ and the ‘princely states’;

    The recommendations were ‘by far’ a step forward in regard to the Provinces; and where ‘Dyarchy’ was abolished, and they became obviously independent masters of their own homes; like – a great beginnng of ‘Divide and Rule’ idea seed planted.

    The said report did not recommend ‘wider powers’ for central government.

    It gave a certain measure of ‘reassurance’ to the Sikhs:

    ‘ they felt, ‘it would be ‘unfair’ for Mohameddans should retain the ‘considerable weightage’ they ‘now enjoy’ (then too) in the then six provinces; and that they should at the same time be imposed;, in the face of Hindu and Sikh staunch opposition (for such concession),- ‘ a definite ‘Muslim majority’ in the Punjab and in Bengal’, unalterable by any appeal to the electorate (Simon Report , Indian /statutory Commission Report.II, 71.)

    Recommendations obviously disappointed ‘progressive opinion’ , both in India and in England;

    By September , the Viceroy issued invitations’ to 66 Indians (50 from British India and 16 from the States to proceed to London to ‘deliberate’ on ‘the Recommendations’ found in the report;

    Two Sikh invitees (in addition Bhupendra Singh of Patiala, who was invited as he was ‘the Chancellor’ of Chamber of Princess).

    Sampuran Sibgh and UjjalSingh were also invitees.

    The ‘Akalis’ (supposed to be some ‘Immortal men’ ) , the party that really mattered, consisted largely of ‘jathedars’ ; ‘incable of grasping’ nicities of constitutional practice;
    Akhalis tacitly aquiciesied in the selection.

    First Round Table Conference:

    British Prime Minister Ramsay MacDonald in 1930 November his first ‘sinister motive to cause’- ‘divide and rule India’ surfaced by then obvious.

    He outlined Simon scheme for a Federal India – it provided a ‘divided – rule ‘ mechanism – one Federal and Provincial and Princely states – some kind of two independent entities;

    Princes not led by Bhupendra Singh of Patiala, expressed willingness to join Federation.

    What is the biggest hurdle?

    It was ‘communal representation’.

    Sikh delegates agreed to ‘joint electorates’ with ‘reservation of seats for minorities’; but they strongly opposed ‘communal majorities based on separate electorates’.(Sikhs demands were tabulated in 17 demands then)

    [(what is the present J&K problem, based on separate electorates – POK, J&K),

    (indeed Prices had a wide range thought – then too – see nothing is settling like a

    ‘square peg would not go in round hole’ –

    hence we have today, 70 yrs war like skirmishes in the J&K, several lost their lives;

    Princes ‘never wanted people to die’, that to happen then, too, appears; Princess seem more intelligent than our today’s great MPs of MLAs !) ]

    Muslims were unwilling to accept ‘joint electorates’, on any terms’, ;

    ‘Separate electorates’ won the day – not only because for Muslims, but also for Sikhs, Indian christians, Anglo-Indians, and other ‘untouchables’ – a ploy played by Mr Ramsay MacDonald under the Simon report!

    [First round table achieved more than either the British Government, or the Participants had anticipated. Highly doubtful. Neither did. Even now after independence we did practically ‘Nothing’; after all we are just doing some very slow, a quality of democracy that is okay, if we want democracy has to perpetuate – after all Citizens level knowledge is yet to grow say even about ‘one century is over’ from ourselves getting Independence, since 1947].

    This encouraged Lord Irwin to extend the hand of ‘friendship’ to the Mahatma, being basically a man with a good heart had the occasion of Lord Irwin landed thanks to good time for Indians..In every century, every experience, our experience still is wanting in ‘Experience’ and yet we need to expect to have ‘Experience’ always.

    On March 5, 1931,they signed a ‘Gandhi -Irvin Pact’ WHEREBY Nationalists were released from goal , the ‘passive resistance’ movement was called off.

    Mahatma accepted an invitation for the Second Round Table conference;

    He was the sole representative from Indian National Congress, accepted Invitation to go to London for the Second R.T conference. The delehgates to the first Round Table were re-invited;

    Second Round Table :

    This met at ‘Adverse circumstances’. The Progressive labour government had been defeated in the elections; Mr Ramsay MacDonald now presided over a coalition, largely ‘conservative’.

    Wedgewood Benn had been replaced by ‘ reactionary ‘Samel Hoare’ as Secretary of State; and , at, home, the gentle Irwin had been succeeded by the blimpian Willington, as Viceroy.

    The conference bogged down on the question of ‘Communal Representation’(a very painful issue).

    Mahatmaji tried to ‘resolve’ the issue by ‘private meetings with other delegates as also British officials – No success at all . His efforts proved abhortive because Mr Jinnah outright ‘rejected’ to give up ‘Separate Electorates’ (a very big bone of contention in later years too, that changed the couse of history for partition of India)

    On behalf of Sikhs , Ujjal Singh reiterated their talks’ outside the conference hall.
    offer to accept ‘Joint Electorates’;

    But,Ujjal Singh added, if ‘separate representation’ was conceded to any community, particularly Muslims, , the Sikhs ‘would insist’ on getting it as well ( a condition precedent he has put before the conference, after all any concession is given to one others too shall have is his principle, else not needed to every one!);

    He further added, ‘“Unless, the Communal Question’,which in the Punjab means the ‘Muslim-Sikh Question’ is settled, it is not possible for the Sikhs to commit themselves to the ‘federal scheme’ in which the Punjab would be an ‘autonomous body (province) (Second round table conference, Minorities Committee,I,89)’;

    Ujjal Singh and Sampuran Singh demnanded for the Sikhs 30% representation (In Bihar and Orissa , the Muslims constituted 11% of the population, had a representation of 25%, i.e 150% weightage; in the UP they had 14.8% (30% weightage given) i.e 100% weightage; in the Central Provinces (CP they had 4.4% of population (hadc15% representation, ie., 250% weightage. Anglo indians with .02% population of the Punjab(had 4000% weightage), . The Europeans had even greater weightage) (read census then)

    And 5% at the centre , with at least one Sikh member in the Central cabinet.

    Ujjal Singh presented an alternative a scheme for territorial adjustment of the Punjab.

    He proposed, that Rawalpindi and Multan Division (excepting the districts of Layallpur, and Montgomery) should be separated from the Punjab and attached to the NWFP , that would be ‘communal proportions’ in the
    Punjab 43.3% Muslims, 42.3% Hindu, and 14.4% Sikhs.

    In this Punjab,, the Sikhs, wouldn’t ask for any weightage; and would ask for it (territorial adjustment) in the NWFP and sindh if the ‘Muslims received ‘it’ in other provinces;
    This ‘eminently’ sensible’ and constructive proposal received little attention (‘details see the Second Round Table conference, Minorities committee, iii , pp1435-37) and consideration from the conference and ‘was rejected’, along with a similar , but from the Slkh point of view, less satisfactory – proposal was by AWG. Corbett, to ‘detach’ Ambala division from the Punjab and join it to the United Provinces.

    In the absence, of agreement amomg the ‘delegates’(everything depended on delegates), Ramsay MacDonald assumed the right, to adjudicate on joint verses separate representation.

    Second Rund Table indeed a dsmal failure.

    Many leaders were arrested InIndia when Mahatmaji landed from London.

    There in India was the Red short movement in NWFP; terrorists had renewed their activities Willingdon ‘promptly clamped’ Mahatamaji as he too protested.

    On April 16, 1932 MacDonald made his award on ‘communal representation’; separate electorates given to mnorities Sikhs, Christians, Muslims,aswell as ‘untouchables’ (this was later withdrawn in ‘Poona Pact’ by Dr BA Ambedkar with Mahatma Gandhi,THE UNTOUCHABLES WERE GIVEN HEAVY WEIGHTAGE in Mixed Hindu Seats’ (obviously unfair, but pressre worked on Mahatma Gandhi by by Dr.B.A Ambedkar).

    Muslims got 33.⅓ %age weightage in the centre and 86 out of 175 seats in Punjab. Sikhs too got weightage but NOT in same proportion, as follows:

    33 of 175 seats in Punjab Assembly;
    3 of 50 in NWFP;
    6 of 250 in Federal Legislative Assembly;
    4 of 150 in Council of States;

    Sikhs got nothing in United Provinces and Sindh; wherein it is said Sikhs were in by then ‘sizable numbers’.

    Award was a bitter blow to the Sikhs. It gave Muslims a permanent ‘communal majority’.

    (That Award (an eye sore) even today jolts BJP men against Muslims, when Congressmen talk on Secularism, if secularism why you need to give that Award by MacDonald then why we need to follow is the question RSS and BJP time and again raise.)

    Remarks: (observations by author)
    The other day, in the UP elections , BJP never gave tickets to Muslims but yet got 322 seats of 403 seats it netted;

    BJP Amit Shah or Ravi Shankar Prasad say, ‘today we are concerned with over all development and jobs generation , no more castes or religions based perceptions –

    obviously ‘ caste and religion have got the backseat, to be ‘edged out’ sooner than expected’ –

    if BJP winning spree goes on in 2019 election is the great message one needs to know –

    -‘even Indian National Congress of Mahatma Gandhi times never liked MacDonald’s Award, but Jinnah forced for it that made Jawaharlal accepting partition is better than granting ‘communal representation’ as such;

    that way Government of India Act of 1935 was questioned by Indians, that is, it showed obviously MacDonald’s Award did, (a mischivous activity) in the absence of settlement by all concerned shareholders of the independent India,

    However, after ‘most painful’ Partition of India in 1947, we drafted the Constitution of India, predominated by Dr. BR Ambedkar, and his speeches in the Constitutional Assembly, tillted in favor of so many clauses of the Government of India Act 1935.

    Now all the governments feel the ‘hard pinch of’ ‘caste politics’ and the very parties themselves day by day move to rectfy that means same situation that prevailed during Ramsay MacDonald’s Award was rejected by Indians is very obvious; after all ‘None can withstand too much inroads on ‘Equality’ that cannot be over played by so called ‘Equity ‘ idea touted under vert Art 14 of the constitution of India.

    The Constitutional Courts have to pull u their socks while interpreting the Constitutional tenets, Part III, Part IV, Part IVA of the Constitution.

    It is disturbing that could destabilize, that could mean even declaring several constitutional amendments as ‘ultra vires’ like the sch IX which was duly censored (declared ‘ultra vires’) in 2007 only, in the Constitutional bench in the Coelho v State of TN headed by then CJI Mr. Y.K Sabharwal.

    Now we, Judge Karnan of Calcutta High court misbehavior on very judiciary principles, as even, well-to-do today the Dalitmen think they can seek relief under ‘Atrocities Act, a far fetched thinking today, as all such things sooner or later might badly affect the “non creamy layer poor persons” of same set of communities;

    after all citizens would not tolerate ‘creamy layers’ misusing concessions of reservarions ideas;

    The Third Round Table was called to consider the ‘Reports’ of the committees that were deliberating during the previous months then in 1932s.

    Only 46 Indians were invited. Sikh nominee Master Tara Singh of Ferozpur protested against provincial Autonomy underpermanent and dominant Muslim majority in thepunjab. (in that way only toda’s UP elections just not inducted any Muslims as MLAsin UP elections by the BJP, one needs to note.
    Animosity is increasing againt Muslims as a religion here in India – ‘any over playing’ (if not properly mended) will have its own deleterious influences and results as is to be seen today).

    Tara Singh supported safeguards that would provide, such measures affect minorities should not be passed without the consentbof 3/5ths of the community concerned –

    ( it is like ‘creamy layer’ issues cannot be passed without the concent of the 3/5th of poor very same castes persons, as they are equally important before allowing ‘creamy layers’ to perpetuate concessions.)

    And be subject to the ‘Veto’ of the Governor (then);

    He pleaded for weightage in services, a 5% representation, in the Federal Legislature, and Sikh representation inthe Sindh (third round table conference, pp.99-100)

    Results of the conferencewere published in the form of a White
    Paper’ in March 1933;

    A joint committee of the two Houses of the Btitish Parliament was set up under Lord Linlithgow (later viceroy of India) to work out the details of the future administration of India*,

    (*some Indians were invited to collaborate with the committee‘s deliberations. The Sikhs were represented by Buta Singh Virk a lawyer of Shikarpura ,, who was a member of thePunjab Legislative Council.0

    On August 4 , 1935, the Governent of India Act of 1935 received the royal assent.

    It provided, for the Federation of Indian Provinces, and Princely States with two houses of parliament in the centre – Central Legislative Assembly, and Council of States , Six of the larger provinces, were to have two legislatures oftheir own.

    Rest including the Punjab were to have, only one.

    About 11.5% of the populatiion was enfranchised; gob=ving 30 millions the right to vote.
    Provinces were msde Masters in their own homes (subject to the reservation of special powers of intervention by Governors)
    The central government remained as before underthe control of the governor general .

    Dyarchy was reintroduced in the centre;

    Subjects like defence, and foreign affairs were reserved and so, the prerogative of the governor general.

    INC rejected the Governent of india Act 1935 because of the powers of ‘intervention’ given to governors in the provinces.

    Itresolved to capture the ‘power’ and then destroy the Constitution.

    The Muslim league followed suit. But reserved the right to try out the ‘provincial scheme’ for ‘whatever it is worth’; or ‘what it was worth it’;

    Princes who had shown alacrity in accepting federation;
    ‘developed cold feet’ when they realized , ‘it would mean surrendering of their ‘sovereignty’.

    Sikh political parties had already condemned the ‘Communal award’; they added their voice to the chorus of denunciation. Then Govt of India Act 1935 was a still born child then.

    In 1936-37, forst elections were held; Sikhs had a choice of backing of Congress or the Unionists. Congress predominantly anti-sikh Arya samajists led by swami Dayananda; Unionists , despite they championed agriculturists, they had ‘Mussalman Jats’ more rather less sikh agriculturists and Hindu Jats – Sikh and Hindu agriculturists were just second to Mussalman Jats.

    They could have formed alliances with one or other political parties; but none of the leaders had the foresight or the following to do so ;

    Instead they did split their forces into the Akali group Khalsa National Party; both of minor importance in provincial matters, and of none whatsoever on the national scene;

    In all provinces, except Bengal, Sindh, and the Punjab, it got a bare 10% of vote;

    Out of 175 seats, the Unionists won 96 and the Khalsa won 15-20 seats (some members constatly changed their allegiance); rest were communists, and independents.

    Sikander Hayat Khan chose his three of his muslim cabinet colleagues , twoo hindus, and one Sikh ( Surinder Singh Majithia).

    The rural Jat bias was in evidence as before, of six ministers only one of the hindus was an urban agriculturist .

    The Unionist Ministry did not have an easy time. Rumours of impending war wih Hitlerite Germany and the increased tempo of the nationalist movement indicated a change in the political barometer.

    People knew India would soon be free.But who would be masters of the Punjab – the Muslims or the Sikhs.

    (uncertainty indeed breed suspicion and hate; occassionally ‘hate’ exploded into violence. The most serious example of this, in 1938 over the possession of ‘Shahidgan’) -martys market (the notorious ‘nakhas’ referred to in volume I – claimed by Muslims to be a Mosque by the Sikhs to be in the Gurudwara.

    The Sikhs won their case in the high court ; but not before many Muslims had been ‘shot’, by the police and a few thousand imprisoned for ‘defying the law’.)
    ( Part II – ends).

    *******

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