K.S. Paripoornan, J.
1. At the instance of the Revenue, the Kerala Agricultural Income tax Appellate Tribunal, Additional Bench, Kozhikode, has referred the following question of law for the decision of this court :
'Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the provisos coming under Clause (f) of Section 10(1) are applicable only to that clause or to the entire Section 10(1) ?'
2. The respondent is an assessee to agricultural income-tax on the files of the Additional Agricultural Income-tax Officer, Taliparamba. We are concerned herein with the assessment year 1975-76 for which the accounting period ended on March 31, 1975. The Agricultural Income-tax Officer, by order dated February 9, 1981, determined the total agricultural income of the respondent/assessee at Rs. 26,831.50. Thereafter, he gave an exemption of one-sixth of the income for the share income from the firm already assessed, amounting to Rsr 24,851.50, and the exemption was fixed at Rs. 4,141.83. So, the net income was fixed at Rs. 22,689.67, rounded off to Rs. 22,690. The prayer of the assessee was that the limitation of exemption specified in the first proviso to Section 10 of the Kerala Agricultural Income-tax Act, to the effect that the exemption shall not exceed one-sixth of the total agricultural income or six thousand rupees whichever is less, is applicable only to Section 10(1)(e) of the Act and will not cover the other clauses in Section 10(1) of the Act. The Agricultural Income tax Appellate Tribunal, Additional Bench, Kozhikode, by order dated November 12, 1982, held that the proviso to Clause (e) of Sub-section (1) of Section 10 will apply only to the limiting of exemption referred to in that clause alone. It is, thereafter, at the instance of the Revenue that the question of law formulated hereinabove has been referred by the Appellate Tribunal for the decision of this court.
3. We heard counsel. Section 10(1) provides for exemption from assessment of agricultural income-tax. It provides as follows (as per the official publication of the Act by the Government of Kerala in 1976) :
'10(1). Exemption from assessment of income-tax.--Agricultural income tax shall not be payable on that part of the total agricultural income of a person which is--
(a) any sum which he receives out of the agricultural income of a Hindu undivided family if he receives such sum as a member of the family and tax under this Act has been levied on the agricultural income ;
(b) (omitted by Act 6 of 1955) ;
(c) any sum which he receives as his share out of the agricultural income of a firm or association of persons, if the tax under this Act has been levied on the agricultural income of such firm or association;
(d) any sum which he receives out of the agricultural income in respect of which tax under this Act has already been levied under Section 9 ;
(e) any sum paid by such person--
(i) to effect an insurance on the life of such person or on the life of a wife or husband of such person or in respect of a contract for deferred annuity on the life of such person or on the life of a wife or husband of such person ;
(ii) where the assessee is a Hindu undivided family, to effect an insurance on the life of any member of such family ;
(f) any sum paid by such person as donation to a trust, institution or fund to which this clause applies, during any period when it so applies :
Provided that the aggregate of any sums exempted under this section shall not exceed one-sixth of the total agricultural income of the assessee or six thousand rupees, whichever is less :
Provided further that nothing contained in this section shall be deemed to entitle a person who is assessed to income-tax under the Indian Income-tax Act, 1922, to claim any deduction in respect of any sum referred to in this section if it was exempted under Section 15 of the said Act.'
4. The learned Government Pleader submitted that the first proviso, exempting one-sixth of the total agricultural income of the assessee or six thousand rupees whichever is less, will apply to all Clauses--(a) to (f)--and is not confined to Section 10(1)(e) of the Act, as held by the Appellate Tribunal. At this juncture, we should state that Section 10 is seen printed in different ways in private publications. The Agricultural Income-tax Act, 1950, by M/s. N. Sugathan & S. Soman (1985.publication) has mentioned two provisos after Sub-section 10(1)(f) of the Act. The Agricultural Income-tax Act, 1950, by Shri P. K. Suresh (1978 edition) mentions the two provisos immediately after Sub-section 10(1)(e) of the Act. The official publication mentions both the provisos after sub Section 10(1)(f) of the Act.
5. Let us now look at the provisos to Section 10(1) of the Act. They go together. Under the first proviso, exemption is limited to one-sixth of the total agricultural income of the assessee or six thousand rupees whichever is less. There is a further limitation on this to the effect that it will not entitle a person who is assessed to income-tax under the Indian Income-tax Act, 1922, to claim any deduction in respect of any sum referred to in this section if it was exempted under Section 15 of the said Act. So, it is evident that the exemption on the non-entitlement of the exemption should centre round the claim for deduction which is exempted under Section 15 of the Indian Income-tax Act, 1922. Section 15 of the Indian Income-tax Act, 1922, provides that tax shall not be payable in respect of any sums paid by an assessee to effect an insurance on the life of the assessee or on the life of a wife or husband of the assessee or in respect of a contract for a deferred annuity on the life of the assessee, etc. There are also other limitations in the said section. Clause (b) of Section 10(1) has been omitted by Act 6 of 1955. Section 10(1), as it is, contains five clauses. It is stated that agricultural income-tax shall not be payable on the total agricultural income of a person covered by the said five clauses. They are : (1) Sums received by a person as a member of the Hindu undivided family forming part of the agricultural income of the Hindu undivided family and assessed to tax under the Act ; (2) sums received by a person as his share out of the agricultural income of a firm or an association of persons, if tax has been levied on the agricultural income of such firm or association ; (3) agricultural income received by a person in respect of which tax has been levied under Section 9 of the Act (deemed income) ; (4) sums paid by a person to effect an insurance on his life or on the life of a wife or husband of such person, etc., and (5) sums paid by a person as donation to a trust, institution or fund to which the clause applies.
6. We are of the view that both the provisos go together. Harmoniously construed, the proviso exempts one-sixth of the total agricultural income of the assessee or six thousand rupees whichever is less. But, that exemption will not entitle a person who is assessed to income-tax under the Indian Income-tax Act, 1922, to claim any deduction in respect of any sum referred to if it was exempted under Section 15 of the Indian Income-tax Act, 1922. It should be stated that the sums received by a person under Section 10(1)(a), (c), (d) are outside the purview of the Act and no tax is exigible on such sums received by a person. Section 10(1)(f) of the Act deals with sums paid by a person as donation to a trust, institution or fund to which the said clause applies. Section 10(1)(e) of the Act alone deals with the entitlement to exemption in respect of sums paid by a person to effect an insurance on the life of such person or on the life of a wife or husband of such person. The provisos, read together, are very much concerned only with regard to the exemption in the case of life insurance dealt with by the Indian Income-tax Act, 1922. It is that specie of exemption which is provided by Section 10(1)(e) of the Act; and a fetter is placed by the proviso on the exemption available on that score by reference to the similar exemption provided in Section 15 of the Indian Income-tax Act, 1922. In other words, the scope and the subject dealt with in the provisos will come only under Section 10(1)(e) and other clauses of Section 10(1)--Clause (a), (c), (d) or (f)--have no nexus or connection with the subject dealt with in the two provisos. In this perspective, we are of the view that the Appellate Tribunal was justified in holding that the provisos to Section 10(1) will apply only to Clause (e) thereof.
7. We should hasten to add that the question referred to this court is not satisfactorily worded and that there are also inadvertent mistakes or omissions in the appellate order of the Tribunal. But, reading the order of the Tribunal as a whole, we have no doubt that the conclusion of the Tribunal was that the provisos to Section 10(1) apply only to Clause (e) thereof. It is that conclusion which is assailed by the Revenue and the opinion of this court is sought as to whether the proviso is confined to Section 10(1)(e) of the Act. The reference to Clause (f) of Section 10(1) in the question referred to this court and Clause (c) of Section 10(1) in some part of the order of the Tribunal are inadvertent mistakes. The fact is clear that the Tribunal held that the provisos to Section 10(1) apply only to Section 10(1)(e) and not to other sub-clauses. The said conclusion is warranted on a reading of the two provisos together in the light of Section 15 of the Indian Income tax Act, 1922, about which reference is made in the limitation to the provisos.
8. We, therefore, answer the question referred to this court in the affirmative--against the Revenue and in favour of the assessee. We hold that the provisos apply only to Section 10(1)(e) of the Agricultural Income-tax Act.
9. The reference is answered accordingly.
10. A copy of this judgment, under the seal of this court and the signature of the Registrar, shall be forwarded to the Kerala Agricultural Income-tax Appellate Tribunal Additional Bench. Kozhikode.