Pattiveeranpatti Hindu Nadar's Uravinmuria Paripalana Sangam vs The Special Commissioner and Commissioner of Agricultural Income Tax and The Agriculture Income Tax Officer

M.M. Sundresh, J.—The Petitioner herein is a registered Society. It is also registered as a Charitable Trust under the Societies Registration

Act, 1860. In pursuant to the amendment made to the Tamil Nadu Agricultural Income Tax Act, 1955, by way of introducing Section 4 in the year

1972, an order of exemption was granted by the Assessing Officer under the Tamil Nadu Agricultural Income Tax Act, 1955 for the assessment

year 1973-74 vide its order dated 30.06.1975. However, the first Respondent, by exercising his suo moto powers has revised the orders of the

Assessing Authority in and by its order dated 27.11.1979 by holding that the income of the Petitioner will have to be computed in finalising the

assessment instead of granting a blanket exemption. Thereafter, the Petitioner has been assessed for the assessment years 1995-96 and 1997-98.

The Assessing Officer has reopened the assessment orders for the above said years and held that in as much as the Assessee has not registered

u/s 12A of the Income Tax Act and obtained exemption, the request for exemption of agricultural income cannot be considered. It was further held

that the Petitioner''s non agricultural income has not been exempted from the payment of tax by the Income Tax authorities and it has also not filed

any return, showing the income and expenditure, before the Income Tax Authorities. Being aggrieved against the order of the Assessing Officer,

the Petitioner filed a revision to the first Respondent, who inturn confirmed the order of the Assessing Officer and challenging the same, the

Petitioner has filed the present writ petition.

The learned Counsel for the Petitioner submitted that the issue involved is no longer res integra in as much as the two Division Benches of this

Honourable Court in Sri. Thirukkarai Eswarar Temple Devasthanam Vs. State of Tamil Nadu, and State of Tamil Nadu Vs.

Ezhumeswaramudayar Temple, have held that the registration of a Public Charitable Trust, is not required to enable the Assessee to get exemption

u/s 4 of the Tamil Nadu Agricultural Income Tax Act, 1955. It further held that what is required while exercising the power u/s 4(b) of the Tamil

Nadu Agricultural Income Tax Act, 1955 is to adopt the same formula, as it is adoptable and the Income Tax Act, in so far as the non agricultural

income of a charitable trust is concerned. The learned Counsel also has made reliance upon the judgment of the learned single Judge reported in

W.P. No. 409 of 2003 dated 11.08.2009 between the very same Assessee and the Respondents.

This Court while considering the identical issue in Sri. Thirukkarai Eswarar Temple Devasthanam Vs. State of Tamil Nadu, has held as follows:

As already adverted to, the subject-matter of taxation cannot be any one other than agricultural income under the Act. For the sake of emphasis,

we may again reiterate that the income from the property held under trust for religious or charitable purposes, which were originally exempt from

tax was sought to be taxed by Act No. 4 of 1973 with effect from April 1, 1972, by the introduction of Clause (b) of Section 4 and in such

process, income from property held under trust for religious or charitable purposes is sought to be exempted in the manner and methodology

contemplated therein.

In the context in which the phraseology, ""to the same extent to which the income derived from property held under trust wholly or partly for

charitable or religious purposes is not included in the total income for the purpose of the income tax Act, 1961"", occurs in the said clause, no

meaning can be ascribed, except as to how under the income tax Act, the income derived from non-agricultural property held by a charitable and

religious trust is taxable and to the same extent, the agricultural income would be taxable under the said clause of the Act. If any other meaning is

given to the said phraseology, it would lead to absurd results. In the process of interpretation of the phraseology, as extracted above, we have to

accredit wisdom and knowledge to the Legislature in enacting such a clause to the relevant provisions of the income tax Act and the provisions of

the Constitution, we have earlier referred to and that perhaps was the reason they have introduced clause (b) of Section 4 to tax ""agricultural

income"" from property held under trust for religious or charitable purposes in the same manner, as had been enacted in the income tax Act, as

relatable to non-agricultural income from property held under trust for religious and charitable purposes for the purpose of income tax.

Certain consequences are to flow from what has been stated above. There is no need for a religious or charitable trust receiving income from

agriculture from the lands held by them to get the trust registered under the relevant provisions of the income tax Act for claiming a little bit of

exemption of tax, as had been granted in Clause (b) of Section 4 of the Act. It is only such sort of religious or charitable trust holding property and

deriving non-agricultural income alone which have to get themselves registered under the relevant provisions of the income tax Act for getting

exemption from taxation.

The said judgment of the Division Bench was again followed in the judgment of State of Tamil Nadu Vs. Ezhumeswaramudayar Temple, .

Further it is seen that in W.P. No. 409 of 2003 filed by the very same Assessee, this Court has observed as follows:

The second Respondent does not dispute the fact that the Petitioner is a Public Charitable Insitution. The original objection taken by the second

Respondent was that the Petitioner is a society and not a trust. However, in respect of Public Charitable Institutions, no such distinction on the

basis of their constitution exists. A Public Charitable Institution could either be a society registered under the Tamil Nadu Societies Registration Act

or be a Trust registered either under the Indian Trusts Act or under the Religious and Charitable Trusts Act or a Company incorporated u/s 25A of

the Company''s Act. What is important is only the character of the Institution and not its constitution. In a number of cases, this Court has also held

that the provisions as could b applicable to Public Charitable Trusts would also be applicable to Societies. ( Sri. Thirukkarai Eswarar Temple

Devasthanam Vs. State of Tamil Nadu, ). Therefore, the second Respondent cannot really maintain an objection on the ground that the Petitioner

is a society and not a trust.

Therefore, it is not in dispute that the Petitioner / Assessee is a Charitable Trust. By applying the ratio laid down by this Court in the above said

judgments, it is clear that the registration of the Assessee u/s 12A of the Income Tax Act is not mandatory for the purpose of exercising the power

u/s 4 of the Tamil Nadu Agricultural Income Tax Act, 1955. In other words, the Respondents will have to consider the entitlement of the Assessee

without insisting on the registration u/s 12A of the Income Tax Act. Therefore, in view of the said principle of law, the orders passed by the

Respondents are hereby set aside and the matter is remitted back to the 2nd Respondent to decide the matter on merits and in accordance with

law, by taking into consideration of the ratio laid down by the judgments referred supra.

The writ petition is ordered accordingly. No costs.