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TMI Blog1997 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 16(2) of the Tamil Nadu Agricultural Income-tax Act, 1955 (Tamil Nadu Act. No. V of 1955---for short "the Act"), simply submitted a return without making any objection as to the exigibility of the income derived by the assessee-Devasthanam. The assessee Devasthanam agitated the matter further before the Assistant Commissioner of Agricultural Income-tax, Villupuram, by preferring Appeal Petitions Nos. 8 and 9 of 1984. The said Assistant Commissioner of Agricultural Income-tax also dismissed these two appeal petitions on April 28, 1984, on twinfold grounds, namely, (1) The assessee did not raise any objection is to the amount of income assessed by the Agricultural Income-tax Officer, Chengalpattu; (2) In the absence of exemption under the Income-tax Act, 1961 (Act No. 43 of 1961---for short "I. T. Act")---a Central Act---the order of the Agricultural Income-tax Officer is quite correct and within the bounds of law. The assessee-Devasthanam agitated the matter further by filing appeals before the Tamil Nadu Agricultural Income-tax Appellate Tribunal, Madras-104 (for short "the Tribunal"), which in turn, took them on file as Appellate Tribunal Appeals Nos. 82 and 86 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... runs as under : "4. Total agricultural income.---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, which is received by him or which accrues to him within or without the State, but does not include---... (b) any agricultural income derived from property held under trust, wholly or partly for charitable or religious purposes, 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 purposes of the Income-tax Act, 1961 (Central Act XLIII of 1961)." Therefore, after the introduction of the said clause, by Act No. 4 of 1973, the exemption granted in respect of the agricultural income derived from the property held under trust is taken away and even the said income is made exigible or assessable to tax and the measure of exigibility or assessability to tax had, however, been indicated by the insertion of a phraseology, while enacting clause (b) of section 4 of the Act. The phraseology---"to the same extent to which the income derived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural income." Article 265 of the Constitution deals with power of taxation and the said article reads as under : "265. Taxes not to be imposed save by authority of law.---No tax shall be levied or collected except by authority of law." Thus, the said article provides that the State shall not levy or collect tax, except by authority of law. A tax cannot be levied or collected by a mere executive fiat. It is to be done by authority of law, which must mean valid law only. In order for a law to be valid, the tax proposed to be levied must be within the legislative competence of the Legislature imposing the tax and authorising collection thereof and, secondly, the tax must be subject to the conditions laid down in article 13 of the Constitution. Article 13 of the Constitution reads as under : "13. Laws inconsistent with or in derogation of the fundamental rights.---(1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this part, shall, to the extent of such inconsistency, be void. (2) The State shall not make any law which takes away or abridges the rights conferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of List I of the Seventh Schedule to the Constitution. Likewise, the State of Tamil Nadu enacted the Act (Tamil Nadu Agricultural Income-tax Act, 1955), under entry 46 of List II of the Seventh Schedule. From this, it is crystal clear that the purpose for which the Income-tax Act was enacted was to tax income, other than "agricultural income" and the purpose of the enactment of the Tamil Nadu was to tax "agricultural income" and nothing further. It is in this view of the matter that in section 10(1) of the Income-tax Act, "agricultural income" is not included in the computation of income of the assessee relatable to the previous accounting year in respect of the assessment year and not that the power inheres in an authority to tax "agricultural income" and consequently to grant exemption therefor. Section 11 of the Income-tax Act deals with income from property held for charitable or religious purposes. The income from the property held for a charitable or religious purpose under this section cannot be any one other than "non-agricultural income". The parameters for grant of exemption of such income had been prescribed by the said section. Section 12 of the Income-tax Act deals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligious 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 authorities below, as already indicated, approached the issue involved in this case from a legal perspective, altogether untenable and that perhaps was the reason they have misdirected themselves to the issue involved and consequently held that the assessee-Devasthanam was liable to tax in respect of the income derived from land held under trust for religious or charitable purposes. The view, we have taken, as above, is in accord with the view taken by this court in the case of His Holiness Silasri Kasivasi Muthuk ..... X X X X Extracts X X X X X X X X Extracts X X X X
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