Law:

Section:

Section 4(b) of the Tamil Nadu Agricultural Income-tax Act, 1955, read with section 10(23C) of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of agricultural income from property held under - Whether where assessee-trust was notified by Central Government as exempted under section 10(23C) it has to be deemed as exempted under section 4(b) of Tamil Nadu Agricultural Income-tax Act also even though assessee had not obtained statutory exemption from State Government or there was no provision in State Agricultural Income-tax Act to grant such exemption - Held, yes Facts For the relevant assessment year, the assessee-trust was assessed for agricultural income. On second appeal, the assessee contended before the Tribunal that the income derived by it was from farm property held under trust wholly for charitable and religious purposes and that the assessee had been notified by the Central Government as exempt from income-tax under section 10(23C). The Tribunal held that the assessee had not obtained any such statutory exemption under the State Agricultural Income-tax Act from the State Government and that there was no provision in the State Agricultural Income-tax enabling the Agricultural ITO to grant exemption in the case of the assessees who were enjoying exemption under the Income-tax Act. The assessee's claim was disallowed by the Tribunal. On revision before the High Court. Held In the instant case, by a notification issued under section 10(23C) of the Income-tax Act, the Central Government had exempted the assessee herein from taxation. In view of specific provision of section 4(b) of State Agricultural Income-tax Act, further elucidated in the case of His Holiness Silasri Kasivasi Muthukumaraswami Thambiran v. Agrl. ITO [1978] 113 ITR 889 (Mad.), if a religious charitable trust has been held to be exempted under the Central Act for a particular year, then no assessment is possible under the State Act in respect of agricultural income of that year. It was also to be held that if the agricultural income is found to be exempt in part under the Central Act, then the agricultural income will be exempted to the same extent, that is in the same…

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