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TMI Blog2002 (9) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... owned agricultural properties in the State from which agricultural income was derived. In order to claim the benefit of exemption from payment of agricultural" income-tax under section 16 of the Act as per section 16(13) it must be registered as provided under section 16(10) of the Act. The petitioner had applied for and obtained registration under section 16(11) of the Act evidenced by order dated March 13, 1997 (item 2 of the paper book). The petitioner is presently concerned with an order dated January 14, 1999, passed by the Deputy Commissioner, Commercial Taxes, Waynad, cancelling registration of the said trust granted by the Deputy Commissioner, Kozhikode, by order dated March 13, 1997, and confirmed in revision by the Commissioner of Agricultural Income-tax, Board of Revenue, Thiruvananthapuram. On the basis of the trust deed (item 6-translation copy in English, item 7 of the paper book), the petitioner was claiming exemption from payment of agricultural income-tax right from the beginning. In fact for the assessment year 1974-75 (accounting year 1973-74), the petitioner claimed exemption from payment of agricultural income-tax under section 4(1) of the Agricultural Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to serve its followers and any part of agricultural income of the trust spent in the State of Kerala also could not be treated as an allowable item of expense." This decision was rendered by the Supreme Court on May 8, 1998. The Kerala Agricultural Income-tax Act, 1950, was repealed and the Kerala Agricultural Income-tax Act, 1991, was enacted. It must be noted that there was no provision in the Agricultural Income-tax Act, 1950, for registration of a charitable/religious institution. The relevant portion of section 4 of the Agricultural Income-tax Act, 1950, reads as follows: "4. Total agricultural income.--(1) Subject to the provisions of this Act, the total agricultural income of any previous year of any person comprises all agricultural income derived from land situated within the State and received by him within or without the State, but does not include--... (b) any agricultural income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in the State; (c) any agricultural income derived from property held under trust in part only for such purposes, to the extent to whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perate so as to exclude from the total agricultural income of the previous year of the person in receipt thereof, (a) any part of the agricultural income from the property held under trust for private religious purposes which does not enure for the benefit of the public; (b) in the case of a trust for charitable purposes or a charitable institution, any agricultural income thereof, if the trust or institution is created or established for the benefit of any particular religious community or caste; (c) in the case of a trust for charitable or religious purposes or a charitable or religious institution any agricultural income thereof,-- (i) if under the terms of the trust or the rules governing the institution any part of such income enures; or (ii) if any part of such income or any property of the trust or institution is during the previous year, used or applied, directly or indirectly for the benefit of any person referred to in sub-section (8)." Sub-sections (10) and (11) of section 16 of the Act of 1991 provide for registration of trusts or institutions created for charitable or religious purposes and sub-section (12) provides for cancellation of the registration. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... twenty hectares the rate shown in column 5 of the table shall apply." The other relevant provisions are contained in rules 17 to 20 of the Kerala Agricultural Income-tax Rules, 1991, which read as follows: "17. Charitable trusts and institutions.--Any trust or institution created for charitable or religious purposes may file an application under sub-section (10) of section 16 to the Deputy Commissioner having jurisdiction over the area in which any of its properties are situated, within six months from the date of commencement of the Act or from the date pf creation of the trust or institution whichever is later. 18. The application shall be in Form No. 11 and shall be accompanied with a copy of the instrument creating the trust or the bye law of the institution. The Deputy Commissioner on receipt of the application may conduct such enquiry as he deems fit and if the particulars furnished in the application are correct and complete and the trust or institution is eligible for registration in accordance with the provisions of the Act and not one created to evade or reduce the tax payable under the Act, grant registration to the trust or institution. 19. If the application i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption in view of the prohibition contained in section 4(3)(b) of the Agricultural Income-tax Act, 1950. The provisions of section 16(1)(a) and (b) and section 16(6) are similar to section 4(1)(b) and (c) and section 4(3) and hence the decision rendered by the Supreme Court squarely applies and it has to be held that the petitioner-trust is not entitled to the benefit of exemption from payment of agricultural income-tax in view of the specific provision contained in section 16(6)(b) of the 1991 Act. Though learned counsel appearing for the petitioner sought to canvass the said decision by relying on the various clauses in the trust deed particularly clauses mentioned by counsel and noted above, in view of the categoric finding by the Supreme Court after referring to the entire clauses in the trust deed that it is a private family trust, it will not be open to this court to consider the claim independently and to arrive at a finding to the contrary. Hence, we hold that the petitioner-trust is a private religious trust disentitled to the benefit of exemption under section 16(1)(a) and (b) in view of the specific provision contained in section 16(6)(b) of the Act. The further questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urposes in his order dated March 13, 1997, long prior to the decision of the Supreme Court. Construing the trust deed the Supreme Court observed that the objects of the trust clearly show that the trust is meant for propagation of the Jain religion and rendering help to the followers of the Jain religion and held that the Tribunal was right in disallowing the claim for exemption. Sub-section (10) of section 16 starts with the expression "any trust or institution created for charitable or religious purposes" and section 16(9)(a), for the purpose of this section, defines a "trust" to mean a trust created for charitable purposes. Thus, in order to apply for registration, even a religious trust must be one created for charitable purposes. The Supreme Court has already held that the purpose of this trust is not charitable. Further, this court had occasion to consider the provisions regarding the grant of registration in Thyaka Trust v. State of Kerala [1999] 236 ITR 185 (Ker), where one of us (Sivarajan J.), after considering the provisions of section 16 in its entirety, observed thus: "It would appear from sub-section (13) of section 16 that the registration under section 16(10) is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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