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TMI Blog1963 (3) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... evied. This is the way in which the question was answered by the High Court and, in our opinion, rightly. The answer to the question is that in spite of the Explanation no exemption can be granted under rule 17 unless the institution or fund is one for charitable purpose and has further been approved by the State Government for the purpose of the rule, that is, for the purpose of earning exemption under it. the dispensaries in the district were under the control of the Assistant Surgeon who was posted at the Memorial Hospital, Balrampur. It may be that this Assistant Surgeon was a Government employee but it does not appear what service he was rendering in the hospitals. In any case, this ground has been nowhere relied upon by the appellant as constituting a grant by the State Government within the meaning of the notification under rule 17. We are, therefore, unable to go into this question. The first part of question must, therefore, be answered in the affirmative as the High Court has done. For the same reason the second part of the question has also to be answered in the affirmative. - - - - - Dated:- 28-3-1963 - Judge(s) : S. K. DAS., A. K. SARKAR., M. HIDAYATULLAH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... next Rs. 3,500 of total agricultural income One anna in the rupee. 3. On the next Rs. 10,000 of total agricultural income One and a half annas in the rupee. 4. On the next Rs. 10,000 of total agricultural income Three annas in the rupee. 5. On the balance of total agricultural income Four annas in the rupee. These rates are subject to the condition that : (a) No agricultural income-tax shall be payable on a total agricultural income which does not exceed Rs. 3,000 and (b) the agricultural income-tax payable shall in no case exceed half the amount by which the total agricultural income exceeds Rs. 3,000. PART II (A) In the case of every individual ....... the basic rates of agricultural super-tax shall be as follows : (Various rates on various slabs of income are mentioned varying from one anna in the rupee on the income of Rs. 10,000 above Rs. 25,000 to five and a quarter annas in the rupee in respect of incomes over and above Rs. 1,50,000). The contention of the appellant is that " agricultural income-tax " mentioned in condition (b) in Part I of the Schedule must be read in terms of the definition in section 2(2) and hence as including super-tax. He, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax only, that is to say, excluding the amount of super-tax, that can be imposed, calculated at the rates specified in Part I of the Schedule, is not in any case to exceed the limit mentioned in condition (b). If it were not so, the words " Those rates are subject to the condition " preceding the two conditions would be insensible. This interpretation brings condition (b) in line with the expression " agricultural income-tax " used in condition (a) where plainly it only refers to income-tax. That condition says that no agricultural income-tax shall be payable on a total agricultural income which does not exceed Rs. 3,000. Since super-tax is not payable unless the agricultural income exceeds Rs. 25,000, the expression " agricultural income-tax " in condition (a) cannot be possibly interpreted as including super-tax. It would be incongruous if the expression " agricultural income-tax " in these two conditions were to be interpreted differently. We also think that the division of the Schedule into two parts clearly indicates that each Part is concerned with different taxes, namely, Part I with income-tax and Part II with super-tax. This is another reason for thinking that the wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for in the rule only to avoid disputes later as to whether the institution or fund not so approved is for a charitable purpose within the meaning of the rule. According to him, where the institution or fund is clearly for a charitable purpose as mentioned in the Explanation, the approval becomes unnecessary and it is useful only in doubtful cases. He says that the word " approved ...... for the purpose of the rule " only mean " approval for the purpose of acceptance of the institution as having a charitable purpose within the rule " so as to avoid any controversy later. We are not persuaded that this is the correct view to take. Normally the word " and " should be given its ordinary meaning and should be understood in a conjunctive sense. So understood the rule would require not only that the payment should be to an institution or fund established for a charitable purpose but that institution or fund must also be approved by the State Government for the purpose of the rule, that is, as an institution donation to which would entitle the donor to exemption from agricultural income-tax. We think that the intention was that there must be approval of the institution or fund. The re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge sums on the maintenance and expenses of the hospitals and several dispensaries. These institutions had no doubt been established for charitable purposes as defined in the Explanation in rule 17. But as we have held that in order to earn exemption under rule 17 the institutions have also to be approved by the Government, the appellant is required to show that the hospitals and dispensaries maintained by him had been so approved. His contention is that they were approved by the notification mentioned in the question. The material portion of that notification is as follows : " In exercise of the powers conferred under rule 17...... the Governor is pleased to approve for purposes of that rule the following funds and institutions ...... (6) All hospitals, sanatoriums or clinics established in the Uttar Pradesh which are in receipt of a grant by the State Government or a local body ......... " Under this notification a hospital or a clinic which is in receipt of a grant by the State Government would be an institution for a charitable purpose approved by the Government for the purpose of rule 17. In order, therefore, to earn the exemption the appellant has to establish that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point, however, was not raised before the assessing authority nor the High Court and no reference to these rules is made in the assessment orders or the appellate judgment and order or by the High Court. These rules, however, do not advance the matter further. They provide that various appointments in the dispensaries had to be made by the Government civil surgeons. Such appointments do not, in our view, amount to rendering services for the charitable purposes for which the hospitals and dispensaries had been established. Learned counsel then drew our attention to another part of these rules and a part of the affidavit filed by his client's agent in connection with the application for reference of the questions to the High Court. From these it appears that the dispensaries in the district were under the control of the Assistant Surgeon who was posted at the Memorial Hospital, Balrampur. It may be that this Assistant Surgeon was a Government employee but it does not appear what service he was rendering in the hospitals. In any case, this ground has been nowhere relied upon by the appellant as constituting a grant by the State Government within the meaning of the notification unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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