PROVINCE OF BIHAR Vs. HARI BHAJAN DAS

JUDGEMENT

(1.) This is a reference under Section 25(2), Bihar Agricultural Income-tax Act, (Act 7 [VII] of 1938) by the Board of Agricultural Income-tax, Bihar, for our opinion upon the question whether the assessee is exempt from payment of agricultural income-tax under Section 8 of the Act. The matter came before this Court in 1942 when this Court was unable to express any opinion on this question because the case stated did not contain sufficient materials.

(2.) The case was, therefore, sent back to the Board of Agricultural Income-tax, Bihar, for a further statement. That statement has now been received. The facts are not in dispute. The assessee is the present mahant of an asthal which has landed properties yielding agricultural income. The assessee has been found, to be a trustee, and the trust under which he holds is a trust created long before the Act came into force and is for public purposes of a charitable and religious nature. For the year 1845 Fasli the assessee has been assessed to agricultural income-tax on Rs. 6229 after allowing for a deduction of Rs. 3500 found to have been spent by him on charitable and religious objects. For the year 1346 Fasli, the assessee has been assessed on a sum of Rs. 6106-8-0 after making a deduction for Rs. 8248 found to have been spent by the assessee on charitable and religious objects. The assessee's contention is that as it has been found he is holding the properties for public purposes of charitable and religious nature, the whole of his agricultural income is free from taxation and not merely the sum found by the agricultural income-tax authorities to have been actually spent for religious and charitable purposes in the two previous years.

(3.) In my opinion, this contention is not sound. The provisions of Section 8(1) of the Act are absolutely clear. It is enacted that where the assessee is a trustee and the trust under which he holds is a trust created before the commencement of this Act, for public purposes of a charitable or religious nature, any income applied, or finally set apart for application, to any public purpose of a charitable or religious nature in accordance with the terms of the trust subject to which he holds the property from which such agricultural income is derived, shall not be included in the total agricultural income of such assessee.