HIS HOLINESS SILASRI KASIVASI MUTHUKUMARASWAMI THAMBIRAN Vs. AGRICULTURAL INCOME TAX OFFICER KUMBAKONAM

JUDGEMENT

(1.) ALL these writ petitions raise a common question of law as to the scope of section 4(b) introduced in the Tamil Nadu Agricultural Income-tax Act, 1955 (V of 1955). The said section 4(b) came to be introduced by the Tamil Nadu Act No. 4 of 1973 with effect from April 1, 1972.Suffice it for me to note the facts of W.P. No. 2960 of 1975. The petitioner had been assessed under the Tamil Nadu Agricultural Income-tax Act (hereinafter referred to as "the Act") for an extent of 124.50 acres equivalent to 72.37 a composition basis. The petitioner had settled an extent of 50.46 ordinary acres in the name of a private trust called Nagakulam Bungalow Krishna Pooja Trust on May 14, 1955. Since the Agricultural Income-tax Officer was of the view that this trust cannot be a public or religious or charitable trust and as it would attract section 4(b) of the Act, the extent was clubbed in the holdings of the petitioner from 1973-74 for the purpose of assessment. The petitioner filed a revision petition before the Commissioner of Agricultural Income-tax under section 34 of the Act. After hearing the advocate for the petitioner, it was rejected on February 4, 1975. Aggrieved by this order, the petitioner has preferred this writ petition to quash the order of the Agricultural Income-tax Officer made in GIR. No. 108/A-73-74 dated October 16, 1974, in so far as it relates to the year 1973-74.W.P. No. 1581 of 1976 relates to 1975-76, while W.P. No. 1948 of 1976 relates to 1974-75 and W.P. No. 1972 of 1976 relates to 1969-70. It is the contention of the learned counsel for the petitioner, Mr. R. Kunchithapatham, that a careful reading of section 4(b) of the Act would disclose that the agricultural income derived by a charitable or religious trust like the petitioner trust is exempt under the Income-tax Act, in view of section 10 of the Income-tax Act, and, therefore, in as much as reference is made to that provision of the Income-tax Act, by section 4(b) of the Tamil Nadu Agricultural Income-tax Act, the very basis of taxation is illegal. In support of this contention, reliance is placed upon my judgment in W.P. Nos. 422 and 423 of 1976 (Rajam Chettiar Annadhana etc., Charities v. Agricultural Income-tax Officer).Mr. K. Venkataswami, the learned Additional Government Pleader in meeting this submission states that my judgment in W.P. Nos. 422 and 423 of 1975 (Rajam Chettiar Annadhna, etc., Charities v. Agricultural Income-tax Officer) requires reconsideration, since when the amending Act introduced section 4(b), it was with the avowed object of subjecting agricultural income derived by a charitable and religious trust to tax. ALL the more so, when the very purpose of the Act, namely, the Tamil Nadu Agricultural Income-tax Act, is to levy tax on agricultural income.

(2.) THEREFORE, if section 10 of the Indian Income-tax Act, is alone got incorporated, the agricultural income held by a religious or a charitable trust would be exempt. That would frustrate the very amendment. Consequently, what have to be looked into are sections 11, 12 and 13 of the Income-tax Act, 1961. Having regard to the language of section 4(b) of the Act, namely, "to the same extent to which income derived from property held under trust wholly or partly for charitable or religious purposes" *, it should have reference only to the non-agricultural income. In other words, what has to be found out is how under the Income-tax Act, income derived from non-agricultural property held by a charitable or religious trust is taxable, to the same extent agricultural income would be taxable under section 4(b) of the Act. Any other interpretation would lead to utter confusion. If would amount to attributing wisdom to the legislature, as if the legislature was not aware of section 10(1) of the Income-tax Act, which confers a specific exemption as far as the agricultural income is concerned.Man grows wiser by experience and this principle is aptly illustrated in this case. In my judgment in W.P. Nos. 422 and 423 of 1975 (Rajam Chettiar Annadhana, etc., Charities v. Agricultural Income-tax Officer) the aspect which is now put forth by the learned Additional Government Pleader was not ever urged. By stating so, is do not propose to disown the responsibility for my judgment. In fact, the interpretation sough to be placed by the learned counsel for the petitioner found acceptance at my hands as a result of which I held that the agricultural income would be exempt. By such an interpretation, the very object and the purpose of section 4(b) of the Act got thwarted. As rightly contended by the learned Additional Government Pleader, the object of the Agricultural Income-tax Act is to tax agricultural income. Such an income derived from a charitable or religious trust was exempt till the amending Act 4 of 1973. It was this exemption which was sought to be withdrawn so that, that income also would become liable for taxation. Could it be said, under those circumstances, that the Tamil Nadu legislature looked at section 10(1) alone and wanted to incorporate that provision of the Income-tax Act ? If that be so, how could this purpose be achieved ? Of course, it may be possible to contend that, however well intentioned it might have been, it was not carried out in effecting the amendment. In fact, that is the contention urged on behalf of the petitioner. I am unable to accept this contention since it would lead to not only frustrate the object of the section but it does not even appear to be a good construction. As to why I held so will be evident from the following. Section 4 defines the scope of total agricultural income. Originally, all agricultural income derived from land situated within the State, which is received by the assessee or which accrued to him within or without the State was assessable. But that income did not include, in view of clause (b) as it stood then, any agricultural income derived from property held under trust or other legal obligation wholly for religious or charitable purpose, and in the case of property so held in part only for such purpose, the income applied thereto.