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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 ..... eputy 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 Income-tax Act, 1950. The assessing authority and the Tribunal, after considering the various clauses in the trust deed, found that for all intents and purposes the object of the trust was to propagate a particular religion and to render service to the followers of that religion, particularly with reference to the families who created the trust. In view of the said finding, the authorities held that the agricultural income of the assessee cannot be excluded by virtue of section 4(3)(a) of the Agricultural Income-tax Act, 1950. However, in revision filed by the petitioner this court in M.P. Shanthivarma Jain, President, M.S.P. Family Jain T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions 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 which such income is applied to such purposes in the State... (3) Nothing contained in clause (b) or clause (c) of sub-section (1) shall operate 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;..." A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 consequence of non-registration of the trust is also provided in sub-section (13). Sub-sections (10) to (13) read as follows: "(10) Any trust or institution created for charitable or religious purposes may make an application in the prescribed form and in the prescribed manner to the Deputy Commissioner of Agricultural Income-tax within six months from the date of commencement of this Act or from the date of creation of the trust or institution, whichever is later, along with a copy of the instrument creating the trust or the bye-law of the institution, as the case may be, for registration: Provided that the Deputy Commissioner may admit an application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 is found to be incomplete or incorrect or if the trust or institution is created for evading or reducing the tax liability or otherwise not in conformity with the provisions of the Act, he may after affording a reasonable opportunity of being heard, reject the application for registration. 20. The orders registering or rejecting the application for registration shall be communicated to the applicant, to the Commissioner and to the Agricultural Income-tax Officer concerned." The contention of learned counsel appearing for the petitioner is that the Deputy Commissioner has no jurisdiction under section 16(12) of the 1991 Act to cancel a registration already granted fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 question that arises for consideration in this case is as to whether the Deputy Commissioner was justified in cancelling the registration on the ground that the trust is a private religious trust not entitled to exemption under the Act. We have already extracted the provisions regarding the registration of a charitable/religious institution contained in section 16(10) to (13) of the Act. As per section 16(10) of Act, any trust or institution created for charitable or religious purposes may make an application in the prescribed form and in the prescribed manner to the Deputy Commissioner of Agricultural Income-tax within six months from the date of commencement of this Act or fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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 contemplated only for availing of the benefit of Chapter IV. It would also appear from a reading of section 16 that the registration as contemplated under section 16(10) is required only for assessees to agricultural income-tax claiming exemption from payment of tax in respect of the agricultural income derived by them in the previous year and that it will not apply to a charitable institution which is not an assessee under the Act." It was further observed in paragraph 12 that: "A fair reading of section 16 particularly sub-sections (1), (2), (12) and (13) would establish beyond any doubt that the said section has application only to a charitable trust which is an asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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