IN THE HIGH COURT OF SIKKIM AT GANGTOK
(CIVIL EXTRA ORDINARY JURISDICTION)
DATED  :  05.10.2010
CORAM
HON’BLE MR. JUSTICE P.D. DINAKARAN, CHIEF JUSTICE
Writ Petition (C) No. 44 of 2009
Shri Chhabil Dass Agarwal,
S/o late Dipchand Agarwal,
R/o Singtam Bazar,
P.O. & P.S. Singtam,
East Sikkim.
…Petitioner
-versus-
1. The Union of India,
    Through the Secretary,
    Ministry of Finance,
    Government of India,
    North Block, New Delhi.
2. The Commissioner of Income Tax,
    West Bengal – I, Ayakar Bhawan,
    7, Chowringhee Square, Calcutta-69.
    At present:
    (Range II, Siliguri & Sikkim),
    Income Tax Department,
    Aayakr Bhavan, Matigara,
    Siliguri, West Bengal-734010.
3. The Deputy Commissioner of Income Tax,
    Circle – I, Siliguri, Central Revenue Building,
    Hakimpara, Siliguri, District Darjeeling2
    At present:
    (Circle - II, Siliguri & Sikkim),
    Income Tax Department,
    Aayakr Bhavan, Matigara,
    Siliguri, West Bengal-734010.
4. The Assistant Commissioner of Income Tax,
    Circle – I, Siliguri, Central Revenue Building,
    Hakimpara, Siliguri, District Darjeeling
    At present:
    Gangtok Circle, Ministry of Finance,
    Department of Revenue,
    Bhanupath, Gangtok-737 101.
5. The Chairman, Central Board of Direct Taxes,
    Government of India, North Block,
    New Delhi-110001.
6. The State of Sikkim,
    Through the Chief Secretary,
    Government of Sikkim,
    Gangtok-737 101.
7. The Income Tax Officer,
    Income and Sales Tax Department,
    Government of Sikkim, Gangtok-737 101.
…Respondents.
For the petitioner : Mr. A.K. Upadhyaya, Sr. Advocate
with Mr. Ashim Chhetri, Advocate
For the respondents : Mr. A. Moulik, Sr. Advocate with
Mr. N.G. Sherpa, Advocate for
respondents No. 1 to 5.
Mr. J.B. Pradhan, Addl. Advocate
General and Mr. S.K. Chettri,
Assistant Government Advocate
for respondents No. 6 and 7. 3
JUDGMENT
Dinakaran, CJ
1. The assessee is the writ petitioner.  The relevant
Assessment Years are 1995-1996 and 1996-1997.  The assessee
has challenged the order of assessment dated 11.12.2009 on the
file of the 4
th
 respondent, namely, Assistant Commissioner of
Income Tax, Circle  – I, Siliguri, confirming, the earlier
assessment orders dated 09.07.2001 and 28.03.2001 for the
Assessment Years 1995-1996 and 1996-1997 respectively based
on the best judgment order passed under Sections 144/147 of
the Income Tax Act, 1961.
2.   The impugned assessment order dated 11.12.2009 is
passed in continuation of the Orders of this Court dated
15.07.2009 in W.P.(C) Nos. 31 and 38 of 2001.
3. A perusal of the said Order dated 15.07.2009 in
W.P.(C) Nos. 31 and 38 of 2009 reveals that the said writ
petitions were originally disposed of by an Order dated
21.07.2005, which reads as hereunder:
 “In the result, the writ petition is closed on
withdrawal with a direction to the parties to maintain
status quo with regard to the matter till the final decision
in the matter is taken by the Committee concerned.
However, it is made clear that the Committee shall
expedite the matter and dispose of the same, thus taking 4
a decision in the matter as early as possible, preferably
within 3 (three) months from the date of receipt of this
order.
…………………………………….  The parties are given
liberty to approach this  Court if they are aggrieved by
the decisions of the Committee, if so advised.  …………….”
4. Concededly the issue, then, was: whether the income
of the non-Sikkimese residing in Sikkim is taxable?  As the said
question was referred to a Committee and the decision of the
Committee was pending, this Court passed an Order dated
21.07.2005, as referred to above.
5. However, as being mentioned, the said writ petitions
No.31 and 38 of 2001 were taken for further hearing on
27.04.2006 and this Court passed an Order dated 27.04.2006 in
W.P.(C) Nos. 31 and 38 of 2001, which reads as hereunder:
“[1]  ……………………………………………………..
[2] This Writ Petition was allowed to be withdrawn with a
direction to the parties to maintain status quo in regard to
the matter till the final decision is taken by the
Committee.  Vide Order dated 02.03.2006, on the prayer
made by the State for extension of time as mentioned in
Court’s order dated 21.7.2005 the office was directed to
list the main Writ Petition on 05.06.2006 for necessary
orders.
[3]  The issue, which was involved in this Writ Petition is
under consideration in Writ Petition No. 13 of 2006.
[4] Let this Writ Petition be listed under heading To Be
Mentioned on 15.05.2006 along with Writ Petition No.
13/2006.”5
6. By virtue of Section 4 of the Finance Act, 2008,
Section 10 (26 AAA) of Income Tax Act, 1961 was inserted,
which reads as hereunder:
 “4. In section 10 of the Income-tax Act, -
(a) after clause (26AA) as omitted by the Finance
Act, 1997, the following clause shall be inserted and
shall be deemed to have been inserted with effect
from the 1
st
 day of April, 1990, namely: -
‘(26AAA) in case of an individual,  being a Sikkimese,
any income which accrues or arises to him-
(a) from any source in the State of Sikkim; or
(b) by way of dividend or interest on securities;
Provided that nothing contained in this clause shall
apply to a Sikkimese woman who, on or after the 1
st
 day
of April, 2008, marries an individual who is not a
Sikkimese.
Explanation.- For the purpose of this clause,
“Sikkimese” shall mean –
(i) an individual, whose name is recorded in the
register maintained under the  Sikkim Subjects
Regulation, 1961 read with the Sikkim Subject Rules,
1961 (hereinafter referred to as the “Register of Sikkim
Subjects”), immediately before the 26
th
 day of April,
1975; or
(ii) an individual, whose name is included in the
Register of Sikkim Subjects by virtue of the Government
of India Order No. 26030/36/90-I.C.I., dated the 7
th
August, 1990 and Order of even number dated the 8
th
April, 1991; or
(iii) any other individual, whose name does not
appear in the Register of Sikkim Subjects, but it is
established beyond doubt that the name of such
individual’s father or husband or paternal grandfather or
brother from the same father has been recorded in that
register;’”
                                                            (emphasis supplied)6
7. Both the Writ Petitions (C) No. 31 and 38 of 2001
were, thus, taken along with the Writ Petition No. 13 of 2006 on
15.07.2009.  However, the result was the same,  as this Court
by an Order dated 15.07.2009, once again, reiterated the earlier
Order dated 21.07.2005, as hereunder:-
“8.   In consideration of the above facts and
circumstances and also upon hearing of the learned
Counsel for the parties, we reiterate the order
dated 21.07.2005 and with a liberty to the parties
to approach this Court6 or any other
appropriate/competent authority or forum for
rederssal of any grievances in this regard.”
8. In the meanwhile, the Central Board of Direct Taxes
(for short, ‘CBDT’), namely 5
th
 respondent herein, by exercising
the power conferred on them under Section 119 (2) (a) of the
Income Tax Act, 1961 passed Instruction No. 8 of 2008 dated
29.07.2008, which reads as hereunder:
 “    INSTRUCTION NO 8/2008, Dated: July 29, 2008
           ORDER UNDER SECTION 119(2)(a) OF
                  THE INCOME TAX ACT, 1961
Vide Finance Act,2008, a new clause (26AAA) has been
inserted in section 10 of the In come Tax Act, 1961 (‘Act’)
with retrospective effect from assessment year
1990-91.  Under the said clause, the following income
accruing or arising to a Sikkimese individual is
exempt from tax-
(a) income from any source in the State of Sikkim; or
(b) income by way of dividend or interest on securities.
For the purpose of the clause, “Sikkimese” has been
defined in the Explanation thereto.7
2.  Income accruing or arising to a non-Sikkimese
individual residing in the State of Sikkim continues
to be liable to tax under the Act, in the case of such
individuals, it has been decided that-
(a) For assessment year 2007-08  or any preceding
assessment year,  no assessment or reassessment
shall be made with regard to the income-
(i)  income from any source in the State of
Sikkim;  or
(ii)  income by way of dividend or interest on  
securities.
(b) In case any proceedings have been initiated for
assessment year 2007-08 or  any preceding
assessment year for not filing the return of income,
such proceedings shall be dropped.
(c) In case any  assessment or  reassessment
proceeding has been initiated for assessment year
2007-08 or  any preceding assessment year and
assessment orders have not been passed, the aforesaid
income shall be accepted as per the return.
(d) For the assessment year 2008-09 and  subsequent
assessment years, assessment or re-assessment, if
required, shall be made in accordance with the provisions
of the Income Tax Act, 1961.
3.  These instructions shall apply only to nonSikkimese individuals residing in the State of
Sikkim.
F.No.153/19/2007-TPL
(Vandana Ramachandran)
Under Secretary to the Govt. of India.”
             (emphasis supplied)
9.1 It is with this backdrop of the case, the Assessing
Officer, 4
th
 respondent passed the impugned assessment order
dated 11.12.2009 against the assessee for the Assessment Years
1995-1996 and 1996-1997 confirming the earlier orders of
assessment dated 09.07.2001 and 28.03.2001 based on the best 8
judgment under Sections 144/147 of the Income Tax Act, 1961,
respectively holding that the writ petitioner-assessee is liable to
pay the income tax demanded, and has also reserved the right to
levy interest under Section 220(2) of the Income Tax Act, 1961
for default in payment of tax separately,
9.2 The impugned order of assessment dated 11.12.2009
reads as under:
 “   OFFICE OF THE ASSISTANT COMMISSIONER OF
                 INCOME TAX, GANGTOK CIRCLE
       (Ministry of Finance, Department of Revenue)
               BHANUPATH, GANGTOK : SIKKIM
No. ACIT/Cir-Gangtok/2009-10/920     Dated:11/12/2009
To
Sri Chhabil Das Agarwal,
Singtam Bazar,
East Sikkim.
Subject: Writ Petitions I No. 38 & 31 of 2001
In the case of –
Shri Chhabil Dass Agarwal Vs. UOI &
                            Others
Ref: Your reminder letter No. Nil dated
07/11/2009
Received on 09/11/2009.
****
Kindly refer to the above.
The above Writ Petitions have been disposed of by
the Hon’ble High Court of Sikkim, Gangtok vide Hon’ble
Court’s order dated  15/07/2009 with the observation
that the new clause (26AAA) inserted in Section 10 of the
I.T. Act, 1961 of the has apparently taken care of the
grievance of the  assessee as projected in the above
Writ Petitions thereby giving liberty to the assessee to
approach the competent authority or forum, including
the Hon’ble High Court if the assessee is aggrieved in any
manner.
Relying on the order of the Hon’ble High Court
dated 15/07/2009, you had, vide a petition dated 7
th
August, 2009 addressed to the DCIT, Cir-Gangtok, Sikkim 9
sought cancellation of order u/s 144/147, tax
demand and withdrawal of penalty proceedings in
view of Instruction No. 8/2008 dated 29.07.2008
and the Order of the Hon’ble High Court of Sikkim dated
15/09/2009.
Subsequently,  you were requested to appear
and explain your case  vide letter No.
ITO/Gangtok/2009-10/739 dated 17/09/2009 fixing
compliance for hearing on 24/09/2009.   In response
you appeared on 24/09/2009 and sought
adjournment till the end of November, 2009 on the
ground that you have recently undergone major
prostate surgery and has been advised complete rest
for 2 months.  You also took the plea that you have not
been able to contact your representative who is based in
Kolkata.   However, your case has to be considered
within the purview of Board’s Instruction No. 8 of
2008 dated 29/07/2008.  Your contention as
reflected in your petitions dated 7
th
 August 2009 and
09
th
 Nov. 2009 is therefore, not tenable and cannot be
acceded to on the following grounds –
7. Board’s Instruction No. 8/2008 dated 29/07/2008
states that clause (26AAA) of sec. 10 of the I.T.
Act, 1961 exempts from tax in respect of income
arising or accruing to a Sikkimese individual in
relation to income accruing to him/her from (a) any
source in the State of Sikkim; or (b) by way of
dividend or interest on securities.
8. Para 2(a) of the Instruction states that for
assessment year 2007-08 or any preceding
assessment years, no assessment or reassessment shall be made with regard to the
income (a) from any source in the State of Sikkim,
or (b) income by way of dividend or interest on
securities.
9. Para 2(b) of the Instructions states that in case any
proceedings have been initiated for assessment
year 2007-08 or any preceding assessment year
for not filing the return of income, such
proceedings shall be dropped.
10. Para 2I of the Instruction states that in case any
assessment or re-assessment proceedings has
been initiated for 2007-08 or any preceding
assessment year and assessment orders have not
been passed, the aforesaid income shall be
accepted as per the return.10
11. Para 2(d) of the Instruction states that for the AY
2008-09 and subsequent assessment years,
assessment or re-assessment, if required, shall be
made in accordance with the provisions of the I.T.
Act, 1961.
12. Para 3 of the Instruction states that these
instructions shall apply only to non-Sikkimese
individuals residing in the State of Sikkim.
In the instant case, you will be  assessed as a
non-Sikkimese individual and hence your income is not
exempt within the meaning of section 10 (26AAA) of the
I.T. Act, 1961.
Order u/s 144/147 of the I.T. Act, 1961 for Ays
1995-96 and 1996-07 was passed on 09/07/2001 and
28/03/2001 respectively.  Since the assessment u/s
144/147 of the I.T. Act, 1961  were completed long
before the amendment inserting clause (26AAA) in
Section 10 of the I.T. Act, 1961 was made vide
Finance Act, 2008,  your plea for cancellation of
orders u/s 144/147, withdrawal of tax demand and
dropping of penalty proceedings do not stand the
test of Board’s Instruction No.  8/2008 dated
29/07/2008.  Your case does not fall under the
parameter of Para 2(a), 2(b), 2(c) or 2(d) of the
Instruction 8 /2008 dated 29/07/2009 as
proceedings u/s 144/147 of the I.T. Act, 1961was
completed long before the insertion of clause
(26AAA) in section 10 of the I.T. Act, 1961.
In view of the above, you are liable to pay the
demand as indicated below-
3. Assessment Year 1995-96: Rs,2,45,87,625
          4. Assessment Year 1996-97:   Rs.     6,05,474
Total     : Rs.2,51,93,099
Interest u/s 220(2) of the I.T. Act, 1961
for default of tax will be computed separately.
You are therefore, requested to pay the
outstanding demand within seven days of the receipt of
this letter failing which appropriate recovery measures as
per law will be initiated against you.
   Sd/-
      (Anju Sherpa)
      DCIT, Cir-Gangtok, SIKKIM”
                                        (emphasis supplied)11
10. Mr. A.K. Upadhyaya, learned Senior Counsel
appearing for the writ petitioner-assessee contends:-
(i)  that  the impugned order is violative of principles
of natural justice, because, even though the writ petitionerassessee requested for an opportunity of being heard,  he
was not given a fair and reasonable opportunity on the
ground that his case  is not falling  under any of the
clarifications referred to in para 2(a), (b), (c) and (d) of the
Instruction No.8 of 2008 dated 29.07.2008, as his income
for the Assessment Year 1995-96 and 1996-97 were
already initiated and assessed as early as 09.07.2001 and
28.03.2001 based on ‘best judgment’;
(ii)  that the Assessing Officer has committed an
illegality in confirming the earlier orders of assessment
dated 09.07.2001 and 28.03.2001 for the Assessment
Years 1995-96 and 1996-97 respectively which were made
on ‘best judgment’;
(iii) that the case of the writ petitioner-assessee
could not be equated to any of the failure mentioned under
Section 144 of the Indian Income Tax Act, 1961 warranting
a best judgment assessment; 12
(iv) that the case of the assessee differs from the
cases of failure mentioned under section 144 of the Income
Tax Act, 1961, on account of the insertion of  Section 10(26
AAA) of the Income Tax Act, 1961,  read with  Instruction
No. 8 of 2008 dated 29.07.2008 issued by the CBDT which
provides certain benevolent relief to the non-Sikkimese
residing in the State of Sikkim, in as much as the
Instruction  No. 8 of 2008 dated 29.07.2008  issued by
CBDT, exercising its power under section 119(2) of the
Income Tax Act, 1961 is binding on the Assessing Officer;
(v) that Section 10(26AAA) of the Act, as well as the
Instruction No.8 of 2008 dated 29.07.2008 have
retrospective effect from 01.04.1990 and, therefore,
reconfirming the earlier assessment orders passed on
09.07.2001  and 28.03.2001, ignoring the Instruction No. 8
of 2008 dated 29.07.2008 of the CBDT is arbitrary and
unreasonable;
(vi) that the refusal of the benefit under Instruction
No. 8 of 2008  dated 29.07.2008 to the writ petitionerassessee alone  is also discriminatory, because the
assessment proceedings initiated against similarly placed
persons are dropped; and13
(vii) that, in any event, the Assessing Officer failed to
appreciate that the writ petitioner-assessee is also entitled
for the benefit of the Instruction No.8 of 2008 dated
29.07.2008 of the CBDT.
11. Per contra Mr. A. Moulik, learned  Senior  Counsel
appearing for the respondent-revenue contends:
(i)   that Section 10(26 AAA) of the Income Tax Act,
1961 does not provide any benefits to the  non-Sikkimese
individual;
(ii)  that even though, Instruction No.8 of 2008
dated 29.07.2008 provides certain benefits   to the nonSikkimese residing in the State of Sikkim namely, viz.:-
(a)  For assessment year 2007-08 or any
preceding assessment year, no assessment
or  reassessment shall be made with
regard to the income-
(i)   income from any source in the State
of Sikkim; or
(ii)  income by way of dividend or interest
on securities.
(b)   In case any proceedings have been
initiated for assessment year 2007-08 or 14
any preceding assessment year for not
filing the return of income, such
proceedings shall be dropped.
(c)  In case any assessment or  reassessment
proceeding has been initiated  for
assessment year 2007-08 or any preceding
assessment year and assessment orders
have not been passed, the aforesaid
income shall be accepted as per the return.
(d)  For the assessment year 2008-09 and
subsequent assessment years, assessment
or re-assessment, if required, shall be
made in accordance with the provisions of
the Income Tax Act, 1961,
the case of the petitioner does not come under either of the
said  cases,  as rightly viewed and  held  by the Assessing
Officer in the impugned proceedings dated  11.12.2009;
(iii) that it may not be proper for this Court to read
into the statute, which is not expressly provided in the fiscal
law;
(iv) that straining and  stretching the provisions of
the tax laws beyond  its limit, by exercising the power of 15
judicial review under Article 226 of the Constitution of
India,  is not permissible; and
(v) that the Assessing Officer has rightly rejected
the contention of the writ petitioner-assessee and
confirmed the earlier assessment orders dated 09.07.2001
and 28.03.2001 for the Assessment Years 1995-96 and
1996-97 respectively as the case of the writ petitionerassessee is not governed under the instruction No. 8 of
2008 dated 29.07.2008.
12. I have given my careful consideration to the
submissions of both the sides.
13. The resultant  effect in the  impugned  proceedings
dated 11.12.2009 is nothing but confirming the earlier orders of
the best judgement passed on 9.07.2001 and 28.03.2001 for the
assessing years 1995-96 and 1996-97 respectively.
14. It is apparent on the face of the records that Section
10(26AAA) of the Income Tax Act, 1961 as well as  Instruction
No. 8 of 2008 dated 29.07.2008 issued by the CBDT have come
into force w.e.f. 01.04.1990 even before the disposal of the Writ
Petitions(C) No.31 and 38 of 2001 by order dated 15.07.2009.  16
15. Both the petitioner-assessee as well as respondentsrevenue were under impression that  Section 10(26AAA) of the
Income Tax Act, 1961 would apply to the case of the petitionerassessee, a non-Sikkimese residing in the State of Sikkim and
the same is evident from Para 51 of the order dated 15.07.2001,
which reads hereunder:-
“5. According to Mr. Moulik, since the
relevant provision is amended as noted above, the
grievance of the petitioner so projected in the
writ petition appears to have been well taken
care of and if the petitioner is aggrieved in
any manner, he may have the liberty to
approach the competent authority or forum
including this Court as was already observed
in the order dated 21.07.2005 whereby parties
were given liberty to approach this Court.”
                      (emphasis supplied)
16. Accordingly, the writ petitioner-assessee filed a
petition dated 07.08.2009 for cancellation of the demand of tax
and for withdrawal of penalty proceedings in view of the
Instruction No.8 of 2008 dated 29.07.2008.  The Assessing
Officer, however, by the  impugned proceedings dated
11.12.2009 held that:-
(i)  Section 10(26AAA) of the Income Tax Act, 1961 is not
at all attracted to the case of the petitioner-assessee, a nonSikkimese, and, therefore, the petitioner-assessee cannot seek
any benefit under Instruction No. 8 of 2008 dated 29.7.2008 nor
seek the withdrawal of penalty proceedings; and 17
(ii)  the  case  of the petitioner is also not governed by the
Instruction No.8 of 2008 dated 29.07.2008 issued by the CBDT
as neither of the clarification provided in sub-clauses (a), (b), (c)
and (d), referred thereunder would cover the  petitioner’s case,
because assessment proceedings of the petitioner-assessee were
already initiated and his income for the Assessment Years 1995-
96 and 1996-97 were already assessed by best judgment orders
dated 09.07.2001 and 28.03.2001.
17.   It is true that this Court in the case of fiscal laws,
particularly relating to withdrawal of tax demand and dropping of
penalty proceedings under the Income Tax provisions, has its
own limitation.
18. However, it is a settled law, that instruction of CBDT
issued under Section 199(2) of the Income Tax Act, 1961 are
binding on the income-tax authorities, even if they deviate from
the  provisions of the Act, so long as they seek to mitigate the
rigour of a particular section for the benefit of the assessee
(Vide: UCO Bank vs CIT 237 ITR 889).  Thus, the circulars and
instructions issued by the C.B.D.T.  exercising the power  under
Section 119(2)(a) of the  Income Tax  Act, 1961 is not only
binding  on the department i.e. Assessing Officer, but they can
also deviate from certain statutory provisions; and such deviation 18
is permitted, where  they are made for just and fair
administration of law.   The Instruction No.8 of 2008 dated
29.07.2008 undoubtedly mitigates the rigour of the statutory
provisions of the Act.  In that view of the matter it is not open for
the department to raise contention which is contrary to the
intention of the circular or instruction validly issued by CBDT
(Vide: CIT vs Abdul 248 ITR 744 and 753).  Therefore,  in my
considered opinion  the question of stretching  the provision
beyond its limit, as provided by  Instruction No.8 of 2008 dated
29.07.2008 by the CBDT, does not arise.
19. The impugned assessment order dated 11.12.2009 of
the Assessing Officer  is illegal and violative of principles of
natural justice as the Assessing Officer had confirmed the earlier
orders of the  best judgment  dated  09.07.2001 and 28.03.2001
for the Assessment Years 1995-96 and 1996-97  respectively,
even though  the case of the petitioner-assessee can not be
compared to any of the deliberate defaults   mentioned under
Sections 144/147 of the Income Tax Act, 1961 which warrants
the best judgment order.
20. Section 144 provides for passing a  ‘best judgment
assessment’ under four deliberate defaults committed by  the
assessee.  viz. 19
(i) Where the assessee has failed to make the return
required under s 139(1) and has not made a return
under s 139(4) or a revised return under s 139(5);
(ii) where there has been a failure to comply with the
terms of a notice issued under s 142(1) requiring the
assessee to produce accounts or other documents or
information specified therein;
(iii) where the assessee has failed to comply with the
AO’s direction under s 142(2A)  for getting the
accounts audited and furnishing the audit report; or
(iv) where the return has been made, and the AO serves
a notice under s 143 (2) upon the assessee requiring
his appearance or the production by him of evidence
in support of his return,  but the assessee does not
comply with the terms of the notice.
But, in  the instant case the petitioner-assessee  has not
committed any of the above defaults but claims certain privileges
and rights conferred on the non-Sikkimese residing in the State
of Sikkim based  on Instruction No.8 of 2008 dated 29.07.2008
issued by the CBDT  exercising their power conferred under
Section 119(2)(a) of the Income Tax Act, 1961 in consequence of
Section 10(26AAA) of the Income Tax Act, 1961 which came into
force w.e.f. 01.04.1990.  Such benevolent reliefs provided  to
the petitioner-assessee  cannot be rejected by the Assessing
Officer  by confirming the earlier  best judgement  dated              
09.07.2001 and 28.03.2001 for  the Assessment Years 1995-96
and 1996-97 respectively, even without providing a fair and
reasonable opportunity to the writ petitioner-assessee. The 20
Assessing Officer, therefore,  failed  to be guided by judicial
consideration and by rules of justice, equity and good conscience
in compliance of principles of natural justice, in spite of the
request of the assessee for adjournment on medical ground; but
had chosen to proceed technically, interpreting Section
10(26AAA) of the I.T. Act. 1961 as well as Instruction No. 8 of
2008 dated 29.07.2008 of CBDT and that they do not cover the
case of the petitioner as his assessment  had already  been
initiated and completed, even before the insertion of Section
10(26AAA) and Instruction No.8 of 2008 dated 29.07.2008 came
into force, over looking the fact that the said Section 10(26AAA)
of the Income Tax Act, 1961 and the Instruction No.8 of 2008
dated 29.07.2008  are given retrospective effect from
01.04.1990.
21. That apart, the Assessing Officer had committed an
error in holding that the Instruction No. 8 of 2008 dated
29.07.2008 is not applicable to the case of the petitionerassessee, as his assessments are already completed, because the
said Instruction No. 8 of 2008 dated 29.07.2008 is applicable
even  in the case of reassessment, in view of the word  ‘reassessment’ used in Paras 2(a) and 2(c) of   the Instruction No.8
of 2008 dated 29.07.2008, providing certain benefits of income 21
tax with regard to  the income  accruing or arising to a  nonSikkimese individual residing in the State of Sikkim. The question
of ‘re-assessment’ would arise only after assessment.  Therefore,
to  hold that in the case of the petitioner-assessee, assessment
proceeding had already been initiated and assessment orders had
also been passed based on best judgment as early as 09.07.2001
and 28.03.2001 for the assessment years 1995-96 and 1996-97
respectively and, therefore, the Instruction No.8 of 2008 dated
29.07.2008 of the CBDT  is not applicable to the petitionerassessee, is arbitrary, discriminatory and unreasonable. There is
an element  of discrimination in refusing the benefits  of  the
Instruction  No.8 of 2008    dated 29.07.2008 to the petitioner
merely because the assessment order had already been initiated
and  passed the best judgement orders dated 09.07.2001 and
28.03.2001 for the  assessment years 1995-96 and 1996-97
respectively, overlooking the clarification dated 29.07.2008 that
the same is applicable even in the case of re-assessment.
22. It is the settled law that benevolent circulars
(Instruction No. 8 of 2008 dated 29.07.2008) providing
administrative relief to the assessee have to be given effect to
even if they are issued subsequent to the decision (best 22
judgement orders dated 09.07.2001 and 28.03.2001) by an
authority under the Act (Vide: Bajaj vs. CIT 222 ITR 418).
23. Hence, I am convinced to interfere with the impugned
order dated 11.12.2009 for the assessment years 1995-96 and
1996-97  and to  quash the same for the reasons stated above.
Accordingly, the same is quashed.
24. However, it is open for the  Assessing  Officer  to
proceed with the matter, if  he is  so advised, of course, after
getting necessary clarifications from the CBDT as referred to
above.
The writ petition is ordered accordingly.  No cost.
      (P.D. Dinakaran, CJ)
                          05.10.10
Index  : Yes/No
Internet  : Yes/No

Source:highcourtofsikkim.nic.in

Indian economy to grow despite politics over policy paralysis: Lakshmi Mittal

Published: Sunday, Apr 29, 2012, 17:16 IST | Updated: Sunday, Apr 29, 2012, 21:57 IST
Place: New Delhi | Agency: PTI

NRI business tycoon Lakshmi N Mittal on Sunday said India's economy will continue to grow despite politics over policy paralysis.

"India story is definitely not over. We are in the process of continuous growth. India has tremendous potential to grow and we have a momentum to grow," the Chairman of ArcelorMittal - the world's biggest steelmaker - said here.

Mittal, who had stated in Bhatinda on Saturday that he would not complain of policy paralysis despite slow decision making, said Asia's third largest economy would continue to grow despite politics over policy paralysis.

"Whatever may happen in terms of politics, you may call it paralysis, I think the country will continue to grow. I am very positive about it," he said.

Growth in India, he said, had slowed because of economic crisis in the European Union.

"Before 2008 crisis...everyone believed that India is decoupled from global economy. The crisis showed we are not. Clearly, one reason why growth has been slowing in past one-and-half years is European crisis," he said, adding EU crisis was impacting global economy, which, in turn, was affecting growth in India.

The 7-7.5 per cent growth in India was a matter of envy for the world, he said drawing parallel to Brazil, another emerging economy, which was growing at 3-4 per cent only.

"While we should continue to strive for higher growth rate...I think we should not be contended, but I think we should not take it negatively that India growth story is over. There is tremendous potential," he added.

Newswallah: Long Reads Edition
By NEHA THIRANI

Reuters

Why has the promise of India remained unfulfilled? Basharat Peer enumerates the many reasons for India’s recent failures and uncertain future in an article in Foreign Affairs magazine. The piece argues that while India’s elite and growing middle class have become increasingly vociferous at expounding their aspiration for India to become a great power, the country has little to show for it. Mr. Peer analyzes two popular books from last year – “Behind the Beautiful Forevers,” by Katherine Boo, and “The Beautiful and the Damned,” by Siddhartha Deb – to show how increasing inequity hampers the promise of India’s growing international influence.
For Mr. Peer, both books demonstrate the desire for upward mobility at every socioeconomic level. However, the author chronicles recent events in the nation to show how corruption, inequality, deeply embedded poverty and poor governance have crippled the nation. Likening the contemporary moment in India to the Gilded Age in the United States, the author asks whether the much-touted democratic system has indeed become yet another hurdle for the country.

According to a latest data of the I-T Department (till November, 2011), a total of 13,74,03,213 PANs are valid at present.

---

April 26, 2012, 7:26 pm

How to Apply for a Student Visa to Study in the United States

By MARTIN BENNETT

Higher Education

The Choice on India Ink

Guidance on American college applications for readers in India from The Times’s admissions blog.

• Visit The Choice »
• Like The Choice on Facebook »

Martin Bennett is the EducationUSA outreach coordinator at the Institute of International Education.
If you are a senior in high school, you hopefully have made that all-important decision as to which U.S. college or university you will attend this fall. As an international student, you have another critical step to take before your dream becomes a reality: the student visa interview.
There is no need to feel anxious about your student visa interview. International students who are currently studying in the United States have reported that their initial fears were unfounded, and instead gave way to excitement and anticipation after their visas were approved.
Here is some advice about obtaining your student visa:

Schedule your student visa appointment.

1. Receive your certificate of eligibility for nonimmigrant student status: either Form I-20 (for F or M visa) or Form DS-2019 (for J visa).
To apply for a visa, you must first have received a Form I-20 or Form DS-2019. The academic institutions that admit you will send a Form I-20 (for F or M visa) or Form DS-2019 (for J visa) depending on the visa that matches your study status. You will receive the form only after you have:

• Been admitted to a Student and Exchange Visitor Program-approved institution or accepted in an exchange program.
• Provided evidence that you can meet all the costs of the program.
2. Pay the Student and Exchange Visitor Information System fee.
You must pay a S.E.V.I.S. fee (currently $200 for F or M visas) and complete the relevant forms before your visa interview. Follow the instructions carefully. For more information, you may also visit the U.S. government’s Study in the States Web site for students.

3. Schedule your appointment.
Once you receive the required documentation (I-20/DS-2019 and your S.E.V.I.S. fee receipt) for the school you wish to attend, you can make an appointment with the nearest U.S. embassy or consulate to apply for a student visa. Your visa can be issued up to 120 days before your arrival in the United States, so it is best to apply for your appointment as early as possible. Visa interview scheduling is done online or by phone at most U.S. embassies and consulates. In India, the appointments are made through V.F.S. Global.
You may go online to complete the U.S. Nonimmigrant Visa Application (DS-160) and pay the application fee.

Be prepared on the day of your student visa appointment:

Before you go to the U.S. consulate or embassy for your visa appointment, be sure to complete this quick checklist, as any inconsistencies in your information may delay the issuance of your visa.

• Ensure your passport is valid for at least six months beyond the end of your study in the United States and that your name is spelled correctly and appears the same on all documents.
• Be sure to have your Form I-20 or Form DS-2019 and your S.E.V.I.S. receipt.
• Confirm the date and time of your visa interview and that you have followed the instructions on the Web site of your nearest U.S. embassy or consulate.
• During the interview, be prepared to answer questions regarding ties to your home country, your English language skills, your academic background, the program in the United States to which you have been admitted and proof of your financial ability.

A vice consul at the U.S. Consulate in Monterrey, Mexico, offered the following advice to student visa applicants that sums up what the interviewing officers are looking for in visa applicants: “Because interviews are short, do your best to explain why you want to study in the United States, how you plan to support yourself while in school, and what your plans are for when your studies are finished.”
The U.S. Department of State issued 781,719 student and exchange visitor visas in fiscal year 2011. That is a worldwide acceptance rate of almost 86 percent. Monica Shie, a consular officer at the U.S. Embassy in New Delhi, reports that nearly one million Indians have received student visas over the last 10 years to study in the United States.
I wish you good luck. If you would like to speak with someone in person about the process, contact one of our EducationUSA Advising Centers, which host visa information sessions for students.

GOVERNMENT OF INDIA
MINISTRY OF   FINANCE
LOK SABHA
UNSTARRED  QUESTION NO 3412
ANSWERED ON    13.08.2010
TAX REBATE FOR DEVELOPMENT OF BACKWARD AREAS
3412 . Shri CHAUHAN MAHENDRASINH
 SANJAY SINH


Will the Minister of FINANCE be pleased to state:-


(a) whether relief from income tax and other taxes is provided to residents of backward regions/areas;

(b) if so, the details thereof, region-wise and conditions therefor; and

(c) the plans of the Union Government in this regard for future?
ANSWER

MINISTER OF THE STATE IN THE MINISTRY OF FINANCE (SHRI S.S. PALANIMANICKAM)

(a) to (c): As per the existing provisions of Income-tax Act, 1961 (Act), exemption from income-tax, subject to certain conditions is given to certain categories of people for certain areas as under -

Provisions for individual taxpayer in certain areas -

(A) Section 10(26) of the Income-tax act, 1961 (Act) provides that in the case of a member of a Scheduled Tribe as defined in clause (25) of article 366 of the Constitution, and residing in-

(i) any area specified in Part I or Part II of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution, or

(ii) in the States of Arunachal Pradesh, Manipur, Mizoram, Nagaland and Tripura, or

(iii) the areas covered by notification No. TAD/R/35/50/109, dated the 23rd February, 1951, issued by the Governor of Assam under the proviso to sub-paragraph (3) of the said paragraph 20 as it stood immediately before the commencement of the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), or

(iv) the Ladakh region of the State of Jammu and Kashmir,

any income which accrues or arises to him from any source in the areas or States aforesaid, or by way of dividend or interest on securities; shall be exempt from Income-tax.

(B) Section 10 (26AAA) of the Act provides that in case of an individual, being a Sikkimese, any income which accrues or arises to him from any source in the State of Sikkim; or by way of dividend or interest on securities shall be exempt from taxation under the following conditions-

(i) the exemption under this section shall not be available to a Sikkimese woman who, on or after the 1st day of April, 2008, marries an individual who is not a Sikkimese.

(ii) for the purposes of this clause, `Sikkimese` shall mean—

(a) an individual, whose name is recorded in the register maintained under the Sikkim Subjects Regulation, 1961 read with the Sikkim Subject Rules, 1961 (hereinafter referred to as the `Register of Sikkim Subjects`), immediately before the 26th day of April, 1975; or

(b) an individual, whose name is included in the Register of Sikkim Subjects by virtue of the Government of India Order No. 26030/36/90-1.C.I., dated the 7th August, 1990 and Order of even number dated the 8th April, 1991; or

(c) any other individual, whose name does not appear in the Register of Sikkim Subjects, but it is established beyond doubt that the name of such individual`s father or husband or paternal grand-father or brother from the same father has been recorded in that register.

Provisions for entities operating in certain areas -

The following tax incentives are available for industrially backward regions/areas under the Income Tax Act, 1961:

Jammu & Kashmir: Deduction in respect of the profits and gains is available under section 80-IB(4) of the Income Tax Act, 1961 at the rate of 100 per cent for five assessment years and 25 per cent for the next five assessment years for eligible `new` industrial undertakings in the State which commence operations between 1.4.1993 and 31.3.2012.

Himachal Pradesh and Uttarakhand: Deduction in respect of the profits and gains is available under section 80-IC of the Income Tax Act at the rate of 100 per cent for five assessment years and 25 per cent (30 per cent in the case of companies) for the next five assessment years for eligible industrial undertakings/ enterprises which commence operations or undertake substantial expansion between 7.1.2003 and 31.3.2012 in the two States.

North-Eastern States: Deduction of the profits and gains from manufacture/production of eligible articles or things, undertaking of substantial expansion for such activities and for carrying on any eligible business during the period 1.4.2007 to 31.3.2017 at the rate of 100 per cent is available to undertakings located in any of the region under section 80-IE of the Income Tax Act for 10 assessment years.

So far as indirect taxes are concerned, certain exemptions from Central Excise duty have been provided to units manufacturing excisable goods, other than goods in the negative list, in specified States/ areas such as the North East, Himachal Pradesh, Uttarakhand etc.

QUESTION DETAILS	Back
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
RAJYA SABHA
UNSTARRED QUESTION NO 2251
TO BE ANSWERED ON 22.03.2005
EXEMPTION OF CITIZENS OF SIKKIM FROM INCOME TAX

2251.	SHRI PYARELAL KHANDELWAL

Will the Minister of FINANCE be pleased to state:- 


(a) whether it is a fact that at the -time of merger of Sikkim with India in 1975 it was committed that citizens of Sikkim would be exempted from income tax and direct taxes;

(b) if so, whether Government are considering to impose income tax and other taxes oil the citizens of Sikkim against the said commitments;

(c) whether Government have received any memorandum from the State Government of Sikkim,

(d) if so, whether Government are considering the same, and

(e) the details of the memorandum received from Sikkim? 


ANSWER

MINISTER OF STATE IN THE MINISTRY OF F!N?,NCE:

(SHRI S.S. PALANIMANICKAM)

(a) & (b): Article 371F was inserted in the Constitution of India by the Constitution (36~ Amendment) Act, 1975, with effect from 26.04.1975, introducing special provision with regard to the State of Sikkim. The Article, inter alia, provides that notwithstanding anything in the Constitution of India, all laws in force immediately before the appointed day in the territories comprised in the State of Sikkim shall continue to be in force until amended of repealed. However, Clause (n) of the said Article provides that the President may, by public notification, extend with such restrictions or modifications as he thinks fit to the State of Sikkim any enactment which is in force in a State of India at the date of the notification. Pursuant to the above Constitutional amendment, the Ministry of Home Affairs issued a notification number S.O. 1028(E) dated 7h November, 1988, whereby direct tax laws of India including the Income-tax Act, 1961, the Gift Tax Act, 1958 anti the Wealth Tax Act, 1957 were extended to the State of Sikkim with effect from essessment year 1989-90. Further, through the Finance Act, 1989, the effective date of implementation of the direct tax laws to Sikkim was extended to assessment year 1990-91.

(c), (d) & (e): A Memorandum was submitted by the Chief Minister of Sikkim on 17.06.2004 requesting, inter alia, expeditious resolution of the impasse on the issues relating to the extension of direct tax laws to the State of Sikkim A high-power committee has been set up to resolve the issue. The Committee consists of the representatives of the State of Sikkim as well as the Government of India. The recommendations of the Committee are under formulation, with the last sitting having taken place on 4th March, 2005. 

Housing Data of the Census of India- 2011

STATE RECORDS MARKED IMPROVEMENT IN BASIC AMENITIES

GANGTOK, 11 April: Sikkim has recorded an improvement in the coverage of drinking water, dwelling units, latrine facilities, communication, and lighting according to the Housing Data of the Census of India- 2011 released officially by the Directorate of Census Operations, Sikkim for the State today. [For complete details read NOW! dated 16 March 2012].
PIB Gangtok Director, CK Dorjee, who was present as the chief guest, released the data today.
In his power-point presentation, Joint Director Census Operations Sikkim, Dr DK Dey informed that the number of houses in Sikkim was 169,022 which included 115,395 in rural and 53,627 in urban areas and the total number of households in the state was 128,131, which includes 92,370 in rural and 35,761 in urban areas. He added that the housing data consists of the number of houses, households, the condition of the census houses, amenities available and assets.
Dr Dey mentioned that the objective of this census was to know the condition of the houses, amenities available to the households and assets possessed by the households. He mentioned that Sikkim has shown a tremendous improvement in different areas of its coverage compared to the 2001 census. He stated that Sikkim has become urbanized in banking facilities, improvement in communication and mode of transport. He informed that in tap drinking water source, Sikkim stood on the fifth position in the country after Chandigarh, Puducherry, Himachal Pradesh and Goa.
The PIB Director stated that the population census provides valuable information about the land and its people at a given point of time which are essential inputs required for planning and developing sound policies and programmes aimed at fostering the welfare of the country and its people. Mr Dorjee added that the data sources have become indispensable for effective and efficient public administration besides serving the needs of the scholars, businessmen, industrialists, planners and electoral authorities. He stated that the Directorate of Census has already released Provisional Population Paper-I &II, containing Provisional population of the state, literacy rate, sex ratio, Rural Urban Population, which was based on enumerators’ abstracts.
Source:Sikkim Now

Jaipal Singh/European Pressphoto AgencyA farmer sorts silkworm cocoons at Marh village, about 18 miles from the northern Indian city of Jammu, the winter capital of Jammu and Kashmir.

The Dalai Lama Escapes from the Chinese

Monday April 20,1959

Source: TIME Magazine

May 28, 1959: Tenzin Gyatso, the 14th Dalai Lama, and his mother, shortly after the Tibetan Buddhist ruler fled his homeland for exile in northern India

Bettmann / CORBIS

Night had settled upon the roof of the world. With a jingling of harness and the clipclop of hooves, a small caravan wound slowly up the 17,000-ft. pass. Ahead lay the snowy summits of the Himalayas, an ocean of wind-whipped peaks and ranges that have served Tibet as a rampart since time began. Cavalrymen with slung rifles spurred forward; state officials in furs, wearing the dangling turquoise earrings of their rank, sat tiredly in the saddle; rangy muleteers in peaked caps with big earlaps goaded the baggage train up the steep path. As they passed a cairn of rocks topped by brightly colored flags printed with Buddhist prayers, each pious Tibetan added a stone to the mound, murmured the traditional litany: "So-ya-la-so."

They listened tensely for the sound of gunfire behind them, which would mean that the pursuing Red Chinese had clashed with the rearguard of Khamba tribesmen. Up front, scouts probed carefully to make sure Communist paratroops had not been dropped in the pass to bar their way. All of them—the 35 Khambas of the rearguard, the 75 officials, soldiers and muleteers—were charged with a solemn responsibility: to make good the escape from Tibet of the God-King in their midst—the 23-year-old 14th Dalai Lama.

Journey to Safety. As the Dalai Lama and his escort fled by night and hid by day in lamaseries, villages and Khamba encampments, the furious Red Chinese boasted that they had put down the three-day revolt in Lhasa that had served to cover the God-King's escape. Point-blank artillery fire drove diehard lamas from the Norbulingka, summer palace on the city's outskirts. Red infantrymen surged into the vast warrens of the Potala winter palace, rounded up defiant monks in narrow passages and dark rooms where flickering butter lamps made Tibet's grotesque gods and demons seem to caper on the walls. The corpses of hundreds of slain Lhasans lay in the streets and parks of the city, from the gutted medical college on Chakpori hill to the barricaded main avenue of Barkhor. Rifle fire and the hammer of machine guns rattled the windows of the Indian consulate general, whose single radio transmitter is the only communication link with the free world. And Red Chinese columns and planes crisscrossed the barren plateaus and narrow valleys of Tibet in search of the missing Dalai Lama.

Last week word came that the Dalai Lama had reached safety in the village of Towang, just across the Indian border. His two-week march to the frontier, it was said, had been screened from Red planes by mist and low clouds conjured up by the prayers of Buddhist holy men.

Aroused Asia. The 1956 rape of Hungary by the Soviet Union did not rouse the frustrated rage in Asia that it did in Western Europe and the U.S. White v. white colonialism does not stir Asians much. But the crime against Tibet has opened many Asian eyes. The independent Times of Indonesia warned that Red China was losing what few friends it had left. From Japan to Ceylon, Asians angrily recalled the fine words of Red China's Premier Chou En-lai at the Bandung Conference in 1955, when he warmly embraced Nehru's Panch Shila (Five Principles) and specifically promised to respect "the rights of the people of all countries to choose freely a way of life as well as political and economic systems." India's press and public demanded that Nehru be at least as forthright in denouncing Red China as he was in denouncing Britain and France during the Suez invasion, and were impatient with his bland impeachments of Peking. In Buddhist Cambodia, a newspaper that often echoes Cambodia's neutralist royal family urged Red China to withdraw its troops from Tibet and prove "that it respects the hopes of all peoples for liberty and self-determination."

Buffer State. Over the centuries, the mountain-locked nation of Tibet has often been overrun by invaders—Mongols, Manchus and Gurkhas, but most often Chinese. Whenever China was strong, it would send a garrison to occupy Lhasa. Whenever China was weak Tibetans would drive the garrison out. In 1904, uneasy about Russian encroachments in central Asia, the British launched an expedition from India and captured Lhasa with little difficulty. To keep each other at arm's length, Britain and Czarist Russia agreed to make a buffer state of Tibet and signed the Convention of 1907 recognizing China's "suzerainty" over Tibet. No one bothered to define suzerainty, nor did anyone consult the Tibetans.

Large chunks of Tibetan territory disappeared. The provinces of Amdo and Kham were taken by China, Sikkim ended up with India, Ladakh went to Kashmir. Today there are more Tibetans living outside Tibet than in it (1,700,000 to 1,300,000).

The Yellow Hat. The nation's sole defense over the centuries was the Three Precious Jewels of Tibetan Buddhism: the Buddha, the Doctrine and the Community. Power lay with the contending monks and noblemen. The Red Hat sect, which allows its lamas to marry, was gradually overborne by the celibate Yellow Hat sect. This was made official in 1557 when a Mongol khan gave the seal of rulership to the leading Yellow Hat monk and named him Dalai (Ocean of Wisdom) Lama. The fifth Dalai Lama is famous for building the vast Potala. He also felt the need to honor his favorite teacher by naming him the Panchen (Teacher) Lama, and put in his keeping Tibet's second largest city, Shigatse. He thus created a rivalry that has plagued Tibet ever since. Generally, the Dalai Lama has had the support of whatever power is ruling in India, and the Panchen Lama of the ruling power in China.

The Search.

 The present Dalai Lama's predecessor was one of the greatest of his line. He lived long and governed well. In 1933, warned by the State Oracle that his end was approaching, he summoned a photographer all the way from Nepal to take a final picture, and shortly thereafter this most sacred Living Buddha shed the garment of his body in order to assume another. While by Lamaist teaching his soul went to dwell for 49 days in the famed Lake Chö Kor Gye before taking up residence in a newborn infant, his corpse was embalmed by being cooked in yak butter and salt, its face painted with gold, and the mummy seated upright facing south in a shrine of the Potala.

Who was the newborn infant in whom his soul was reincarnated? A four-year search began, and became another of the endless legends of Tibet. The regent, who ruled the state during the interregnum, journeyed to Lake Chö Kor Gye and, after gazing into its mirrored waters, reported a vision of a three-storied lamasery whose golden roof was necked with turquoise, and a winding road that led to a gabled farmhouse of a type unknown to Lhasans. Search parties went out in all directions without success. Finally the oracle of Samye monastery, Tibet's oldest, went into a trance, recommended that the search be extended to the Chinese province of Tsinghai, whose Amdo region is largely populated by Tibetans.

In Tsinghai. the priestly caravan was met by the ninth Panchen Lama, who had fled to China after difficulties with the 13th Dalai Lama. Near death himself, the Panchen Lama was not bitter, and suggested the names of three young boys who might be possible candidates. The first child had already died when the lamas reached him; the second ran screaming at the sight of them. At the home of the third child, on the shores of fabled Lake Koko Nor, the monks were struck dumb. Just as in the regent's vision, there was a peasant house with a gabled roof, there was a winding road and, beyond, a three-storied lamasery whose golden dome sparkled with turquoise tiles.

As the awed monks approached the farmhouse, a small boy rushed toward them from the kitchen crying, "Lama! Lama!" His name was Lhamo Dhondup; he was two years old; and one of his brothers was already a Living Buddha at Kumbum monastery. Interrogated, the child gave the correct title of every official in the party, even picking out those who were disguised as servants. The second test required that he examine duplicate rosaries, liturgical drums, bells, bronze thunderbolts, and teacups, and select the ones that had belonged to him in his previous life as the 13th Dalai Lama. He did it with ease. Overjoyed, the lamas also found that the child had the required physical marks: large ears, and moles on his body that represented a second pair of arms. Then, in the final test, he was offered a choice of identical walking sticks. To the monks' horror, little Lhamo chose the wrong one—but at once threw it away. Seizing the right stick, he refused to be parted from it.

Finding the Dalai Lama proved easier than getting him home to Lhasa. The Chinese warlord of Tsinghai demanded $30,000 before he would let the boy leave. Glumly, the lamas paid it and set out for Tibet. They were stopped at the border. The warlord wanted more money, and it took two years of negotiations and a further payment of $90,000 before the Dalai Lama, by then four years old, could go in triumph to the palace of Potala.

Polygyny & Prayer. The Tibet he would one day rule is a preserved relic of ancient oriental feudalism. Twice as large as Texas, lying in the very heart of Asia, it is a land of mountains and craterlike valleys that seem to have been ripped from the moon. Its people are handsome, cheerful and indescribably dirty. About four-fifths of them work to support one-fifth, who are shut up in lamaseries. What little land is not owned by the monks belongs either to the Dalai Lama or to about 150 noble families, who have kept their names and acres intact down the centuries by a mixture of polygyny and polyandry. To safeguard their ancestral estate, three brothers will often share a single wife, and all children are considered to be fathered by the eldest of the brothers. Recently, a highborn Lhasa woman was simultaneously married to a local nobleman, to the Foreign Minister of Tibet, and to the Foreign Minister's son by another wife.

Religion is lived by all the people. Hundreds of lamaseries house thousands upon thousands of monks and nuns whose days are spent in meditation and prayer. There are nearly as many Living Buddhas as there are lamaseries, including one female incarnation whose name translates as "Thunderbolt Sow." Prayer is everywhere, on the lips of men and on flags and bits of paper stamped with woodblock imprints of the sacred words: "Om mani padme hum [Hail, the jewel in the lotus)." The phrase flutters from tall poles outside villages, from trees and cairns; it is stuffed inside the chortens' hollow towers at crossroads, and revolves constantly in the prayer wheels in every temple, nearly every house. There is gold in Tibet that cannot be mined for fear of offending the gods of earth, though panning gold from the river beds is permitted.

When a Tibetan dies, his body is carried to the top of a mortuary hill, hacked into pieces by body breakers and left to be picked clean to the bone by scavenger birds and beasts. Tibetan sons keep their fathers' skulls and use them as drinking cups out of filial piety. On stormy days, when blizzards smother the high mountain passes, lamas cut out paper horses and scatter them to the winds to carry help to any poor traveler foundering in the deep snow. Meeting a stranger, a Tibetan sticks out his tongue in friendly greeting.

Tibet is cold, filled with silence and bones, haunted by demons; yet Tibetans are a strangely happy people. In the brief two months of summer, they swarm from their dirty, smoke-filled houses, set up white tents with blue trimmings on the river meadows, sing, drink milk beer and tell stories. They splash together in the streams for their first baths of the year. Nearly every visitor to penetrate the forbidden land has been enchanted by its people. They do few things terribly well, but everything with zest. Explorer Fosco Maraini believes they have found the secret of liberty, which is "to live like a flower or a stone; sheltering from the rain in bad weather, enjoying the sun if it is fine, breathing in the fullness of the afternoon, the sweetness of evening, the mysteriousness of night, with equal joy and wisdom. Perhaps that is why you hear singing everywhere, fine music that fades away into space as if it were spontaneously generated." Coming back to the outside world from Tibet, travelers miss the serenity and peace, the brimful feeling of being at one with nature and the universe, the unfailing courtesy of Tibetans, and their pious avoidance of cruelty to any living thing.

Defender of the Faith. For the four-year-old Dalai Lama, arrival in Tibet meant an end to childhood. He was enthroned at Lhasa in 1940 and endowed with many names—the Tender, Glorious One, the Holy One, the Mighty of Speech, the Excellent Understanding, the Absolute Wisdom, the Defender of the Faith. He sat through the hours-long ceremonies without complaint, a slim, grave-eyed boy with protuberant ears.

The Dalai Lama's peasant family came with him to Lhasa, and his father was made a noble, but he saw little of them. His days were spent with monkish tutors, in learning the Tantric texts of Lamaism and the complex religious ceremonials. At night he went to sleep in the enormous, fortresslike Potala, and could hear the palace gates close harshly and the ringing shouts of the watchmen as they marched through the long, twisting corridors. Without playmates or attending parents, the Dalai Lama matured early, and at 14 he visited Lhasa's great monasteries of Drepung and Sera to engage in religious disputation with their learned abbots. This was a critical moment, for upon his intelligence and agility of mind would depend the future balance of power. He would not be deposed should he fail the examination, but he could be turned into a puppet—a Living Buddha who was easily manipulated by shrewd and able monks.

At Drepung monastery thousands of red-robed lamas crouched on their haunches in a graveled courtyard while the 14-year-old Dalai Lama preached to them on the Tantric texts in a clear, boyish voice, but with the composure and assurance of an adult. A Tibetan-speaking Westerner was there, an Austrian named Heinrich Harrer, who had escaped from a prisoner-of-war camp in India and painfully made his way to asylum in Lhasa. The debate that followed between the abbot and the Dalai Lama was a genuine contest of wits, says Harrer, in which the God-King was "never for a moment disconcerted," while the venerable abbot "was hard put to hold his own."

But the Dalai Lama was still too young to govern, and his state was run for him by regents. Two of them quarreled, and Lhasa was rocked by a brief civil war in 1947, in which howitzers were used to end the defiance of the monks of Sera lamasery. More important to Tibet and the Dalai Lama was another civil war: that in China. As Chiang Kai-shek's Nationalists were driven from the mainland to Formosa, it was inevitable that the Reds would soon attempt to assert the Chinese suzerainty that had been largely ineffectual for nearly 40 years.

In 1950 the test came. When a Red Chinese "liberation" army was poised on the Tibetan frontier, the nomad Khamba tribesmen asked Lhasa if it intended to fight. The Dalai Lama's advisers could not make up their minds. The fortress of Chamdo surrendered with scarcely a shot fired, and the Khambas decided that Lhasa had lost its nerve, and made no move to stop the Reds.

The young Dalai Lama was seldom consulted in such matters. He passed his time in study and in a new absorption in Western gadgets. He took many photographs, often wandered on the terraces of the Potala armed with a telescope with which he could examine the busy life of his city without ever being permitted to join in it. Each spring he traveled in solemn procession through ranks of bowing, weeping people to the summer palace; each autumn he solemnly returned to the Potala. The Austrian Harrer tutored him in Western science and technology, found in the Dalai Lama an insatiable urge for learning, a fascination with modern matters such as the construction of jet planes, but a total acceptance of his own godhead. Once, remarking on his previous incarnation as the 13th Dalai Lama, he said musingly: "It is funny that the former body was so fond of horses and that they mean so little to me."

As the Red Chinese pushed toward Lhasa, the Tibetan National Assembly sent an urgent plea to the United Nations for help against the aggressors. It was rejected with the pious hope that China and Tibet would unite peacefully. The uncertain Tibetan government called on the State Oracle to decide what the Dalai Lama should do. He urged flight.

Before leaving Lhasa, the Dalai Lama was hastily invested with full power as the ruler of Tibet and the regency abolished. In command of his country for the first time, just as it seemed on the point of dissolution, the Dalai Lama withdrew to the Indian border but did not cross over. Since it was clear that no power on earth was interested in aiding Tibet, the God-King opened negotiations at a distance with Red China. In May 1951, a 17-point agreement was signed between the two nations: Red China agreed that Tibet could retain autonomy and promised no change in the Dalai Lama's status, function or power. Tibet surrendered control of its foreign relations to Red China.

Journey to Peking. Returning to Lhasa, the 17-year-old Dalai Lama received the Red emissaries with frank curiosity. Much of what they proposed—schools, roads, hospitals, light industry—met his approval. Many Tibetans welcomed the break with the feudal past, argued: "We must learn modern methods from someone—why not the Chinese?" The Dalai Lama made a six-month visit to Mao Tse-tung's new China, listened patiently to lectures on Marxism and Leninism, saw factories, dams, parades. Back in Tibet, Red technicians set to work. Some 3,000 Tibetan students were shipped off to school in Red China. But things went wrong from the start. The hard-driving Red cadres filled with Communist zeal made little impression on the individualistic Tibetans, who felt that the inner perfection of a man's soul was more important than an asphalt surface on a road. Sighed the Dalai Lama: "China and Tibet are like fire and wood."

His words were proved true in the border province of Kham, where the Reds had been longer in control. The lamaseries of Kham were looted of their treasure and their land collectivized. Nomad Khamba tribesmen were driven from the pastureland they had used for centuries. Tribal chiefs resented their loss of power te the commissars. The Khambas, great shaggy men often 6 ft. tall, with leather boots, 3-ft. swords and rifles they are born and die with, fought back. Snipers bushwhacked lone Red couriers on the new road to Lhasa. Khamba bands ambushed military convoys. The embittered monks drove off the Chinese farmers sent to take over their land. To teach them a lesson. the Chinese Reds sent bombing planes and leveled the intransigent lamaseries.

For four years the guerrilla war raged along the border. More and more dispossessed Khambas crossed over into Tibet proper and roused their fellow tribesmen in the Tsangpo valley to join the revolt. In Lhasa, monks grumbled at the religion-destroying teachings of the Red Chinese; Tibetans complained at soaring prices and the confiscation of grain and wool. The Reds applied pressure on the Dalai Lama to quiet his people. To an anxious crowd assembled in the Norbulingka gardens, the God-King said blandly: "If the Chinese Communists have come to Tibet to help us, it is most important that they should respect our social system, culture, customs and habits. If Chinese Communists do not understand the conditions and harm or injure our people, you should immediately report the facts to the government, and we can immediately ask that the guilty ones be sent back to China."

When the rebel Khamba tribesmen began attacking Red outposts within 40 miles of Lhasa, the Red commander demanded that the Dalai Lama prove his "solidarity" by ordering his 5,000-man bodyguard against the rebels. It was a shrewd move, for in the past Lhasa had had its own troubles with the Khambas, who recognized the spiritual rule of the Dalai Lama but had a habit of killing his tax gatherers and robbing caravans. The God-King solved it neatly: he sent a message to the Khambas saying cryptically that "bloodshed was not the answer," but flatly refused to lend Tibetan troops on a punitive expedition.

Unable to break the Dalai Lama's will, the Red commander decided on a show of strength. Last month, while Lhasa was still crowded with monks, pilgrims and peasants who had attended the New Year's Festival, the Red general sent a curt note ordering the Dalai Lama to appear, alone, at Communist headquarters.

Lhasa was appalled. It was unthinkable that a message should go directly to the Dalai Lama instead of being reverently submitted through his Cabinet. It was even worse to demand that the Living Buddha attend a meeting alone without his ceremonial train of senior abbots and court officials. On hearing the news, the Dalai Lama's mother burst into tears. Thousands of weeping women surged around the Indian consulate general and begged the consul to accompany them while they handed a protest petition to the Red Chinese. The monks of the city's three great lamaseries prepared to die before letting the Dalai Lama be taken from them. Hidden stores of arms were passed out to the furious populace. Khamba tribesmen with their rifles, swords and lean, savage dogs began to filter into Lhasa. The nervous Chinese set up machine-gun posts, trained artillery on the Potala and the Norbulingka palaces.

On March 17 the Dalai Lama, his mother, sister and two brothers, guarded by a fanatic escort, slipped out of Lhasa and moved north, where there were few Chinese patrols. Traveling only at night, the party carefully circled the city and headed south toward the Indian border. On March 19 the fighting started in

Lhasa, and only after three days, when the city's whitewashed houses, its palaces and lamaseries were a smoldering shambles, did the Red Chinese realize they had been outwitted, and set up the propaganda cry that the Dalai Lama had been kidnaped and was being held "by duress."

Asian Algeria. The smashing of the revolt in Lhasa was as brutal as the action of Soviet Russian tanks in Budapest. But Tibet is not another Hungary: it is more likely to become Red China's Algeria, a festering war to the knife that can be neither won nor lost. The Communist garrisons should be able to hold the cities and the main roads. They can even find a handful of Tibetan collaborators, like their tame puppet, the tenth Panchen Lama, a wan young man of 22 who is unable to control the monks of his own lamaseries. But the Red troops, estimated at 60,000-80,000, must be supplied from a base 70 miles distant, over a single, hazardous road that can be easily cut by Khamba guerrillas.

At week's end the Khamba rebels were reportedly joined by equally fierce Amdowa and Golok tribesmen, spreading the fires of revolt the length and breadth of Tibet, and putting into the field against the Chinese Reds an estimated 100,000 warriors, who were carrying the fight to the Chinese provinces of Szechwan and Tsinghai as well as Tibet proper. The Red radio protested plaintively that "reactionary elements" from China itself had joined the battle.

The rest of the world cheered the rebels and denounced their oppressors but made no other move. India, the biggest free neighbor, was giving shamefaced support to Premier Nehru's reiterated insistence that "India was anxious to have friendly relations with Red China."

When the Dalai Lama this week finally made his way through the jungles of

Assam to the airfield at Bomdila, he was welcomed by officials of the Indian government before being flown to a mountain resort at a safe distance from the Tibetan border—so as not to give offense to Red China. He will be inundated by the good wishes of the free world, but for the foreseeable future, the Dalai Lama and 3,000,000 Tibetan patriots can only put their trust—as their ancestors did before them —in the Three Precious Jewels of Tibetan Buddhism: the Buddha, the Doctrine and the Community.

Source: TIME magazine

Read more: http://www.time.com/time/magazine/article/0,9171,864579,00.html#ixzz1rdgtqT4g