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1963 (3) TMI 3 - SC - Income TaxWhether " 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? Whether the Explanation to rule 17 is controlled by the rule itself or is to be interpreted and applied independently of the rule? Whether the hospitals which were subject to the general inspection by the civil surgeon can be treated as hospitals in receipt of a grant from the Government within the meaning of the notification issued under rule17 ? Whether the scholarships paid to students through an institution recognised by the State Government or a local authority were donations within the meaning of rule 117 ? Whether the scholarships paid to students directly would amount to donations to an institution or to a fund within the scope of rule 17 ? Held that:- The first question must be answered by saying that condition (b) only restricts the amount of income-tax leviable under the Act and has nothing to do with the amount of super-tax that can be levied. 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.
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