Swamikkannu, J.
1. This tax case revision is filed by Sri Sankaracharyar Mutt by Sri Karyam and Agent, Kumbakonam, against the order of the Tamil Nadu Agricultural Income-tax Appellate Tribunal, Madras, dated April 27, 1978, passed in ATA No. 158 of 1977 with respect to the assessment year 1976-77 remanding the matter. The appeal before the Tamil Nadu Agricultural Income-tax Appellate Tribunal, Madras, was filed by the petitioner herein against the order of the Assistant Commissioner of Agricultural Income-tax, Thanjavur, dated July 30, 1977, for the assessment year 1976-77 in A. No. 80 of 1977E.
2. Now, this revision is confined to the following order of the Tribunal wherein it was held that the petitioner has not obtained any such statutory exemption under the Tamil Nadu Agricultural Income-tax Act from the Government of Tamil Nadu, and that there is no provision in the Tamil Nadu Agricultural Income-tax Act enabling the Agricultural Income-tax Officer to grant exemption in the case of the assessees who are enjoying exemption under the Income-tax Act. It is this aspect which is agitated in this revision because the rejection of the contention that had been put forward on behalf of the petitioner before the Tribunal that the Mutt has been exempted by the Central Government from the assessment year 1972-73 from levy of income-tax under section 10(23C)(v) of the Income-tax Act and that the Mutt must be deemed to have been exempted under the Tamil Nadu Agricultural Income-tax Act also, was rejected by the Tribunal.
3. A notice was issued under section 16(2) of the Tamil Nadu Agricultural Income-tax Act to the petitioner herein, and for that, the petitioner herein furnished a blank return dated 'Nil' and enclosed a statement showing the details of income and expenditure for the accounting year ended June 30, 1975. After perusal of the accounts and records, the Agricultural Income-tax Officer, Kumbakonam, determined the net agricultural income of the trust at Rs. 23,047 for the year 1976-77. The appeal to the Assistant Commissioner of Agricultural Income-tax, Thanjavur, was dismissed. Hence, an appeal was preferred before the Tribunal. The contention that was put forward before the Tribunal on behalf of the petitioner herein was that the income derived by the assessee in farm property was held under trust wholly for charitable and religious purposes and that the Mutt has been notified as exempt from income-tax on its income under section 10(23C) of the Central Income-tax Act. Consequently, the Mutt is exempted from the levy of agricultural income-tax also under section 4(b) of the Act. It was also submitted before the Tribunal that the entire amount of expenses incurred in connection with 'pannai cultivation' should have been allowed by the lower authorities, and that the dry lands in 'Sirumalai' are under 'pannai cultivation' and this fact should have been taken into account for fixing the cultivation expenses. The Agricultural Income-tax Officer has allowed 'pannai expenditure' only in respect of 22.04-2/3 acres. It was also submitted before the Tribunal that the Agricultural Income-tax Officer has failed to take into account 165.13 standard acres of dry lands in 'Sirumalai' village which was also under 'pannai cultivation' and that the Agricultural Income-tax Officer has taken into account the income derived from these lands, but has failed to give any deduction for cultivation expenses. According to the petitioner herein, as was represented before the Tribunal, it is not liable for any assessment even if a correct computation is made by the authorities.
4. On the other hand, on behalf of the Revenue, it was contended that the amounts spent for trust purposes alone will be exempt from tax after the amendment of the Act, that the non-agricultural income will include all receipts other than agricultural income, that the Agricultural Income-tax Officer has not taxed any non-agricultural income, that only for arriving at the net agricultural income, he has taken into account the non-agricultural income and that the expenditure incurred for running the establishment should be treated as trust expenditure.
5. As regards the claim relating to 'pannai' cultivation, the Tribunal found that the Agricultural Income-tax Officer has allowed Rs. 400 per acre for double crop lands to the extent of 12.08-2/3 acres and Rs. 300 per acre for single crop lands to the extent of 9.96 acres. The Tribunal has also observed in the order under revision that before the Assistant Commissioner, the petitioner herein has claimed that the expenses incurred to the extent of Rs. 15,941.94 for agricultural operations in the plantations in 'Sirumalai' estate, which was under 'pannai cultivation', should be allowed. The Appellate Assistant Commissioner has rejected the claim on the ground that the petitioner herein has not produced proper accounts or vouchers. The Tribunal also found that the petitioner herein has not claimed that the lands in 'Sirumalai' estate were under 'pannai cultivation'. In the statement given by Sri Karyam and Agent of the petitioner-Mutt, it is not stated that 'Sirumalai' estate was under 'pannai cultivation' and the said point was raised before the Assistant Commissioner for the first time. In the said statement, it was claimed on behalf of the petitioner herein that a sum of Rs. 17,812.94 was incurred under the head, and out of the said sum of Rs. 17,812.94, the Agricultural Income-tax Officer has allowed only a sum of Rs. 7,894. The petitioner herein has not produced the vouchers before the Appellate Assistant Commissioner to show the expenses relating to 'Sirumalai' estate. on behalf of the petitioner herein, it was submitted before the Tribunal that vouchers were available to prove the expenses relating to Sirumalai lands. It is under those circumstances that the Tribunal found it expedient to remand the matter to the Agricultural Income-tax Officer for verification of the claim afresh.
6. It was also contended on behalf of the petitioner herein that the lower authorities were not justified in taking into account the receipts from hundial agra sambhavanai and pada puja under non-agricultural income. In this regard, the decision in Thakur Das Shyam Sunder v. Addl CIT : [1974]93ITR27(All) [FB] was referred to before the Tribunal The Tribunal observed in paragraph 6 of the order which is under revision that the non-agricultural income is not taxed. As the trust expenditure is met both from agricultural and non-agricultural income to find out the proportion in which income was received from the two sources, it is necessary to fix the non-agricultural income. Therefore, the Tribunal held that there is no ground for interfering with the conclusion arrived at by the lower authorities. In other words, the Tribunal held that the lower authorities have rightly included the amounts under the head 'Non-agricultural income.'
7. The next point that has been urged on behalf of the revision petitioner herein before the Tribunal was that the Mutt has been exempted by the Central Government from the assessment year 1972-73 from levy of income-tax under section 10(23C)(v) of the Income-tax Act and that the Mutt must be deemed to have been exempted under the Tamil Nadu Agricultural Income-tax Act also. It is this aspect of the case that we are concerned with in the instant revision before us.
8. In this regard, Mr. Swaminathan, learned counsel for the petitioner herein, brought to our notice 'Notification No. S.O. 1921, dated April 1, 1976 - Income-tax Act, 1961 - and Notification under section 10(23C)(v), published in the Gazette of India, Part II, section 3(ii), page 1975, dated June 12, 1976, which runs as follows :
'In exercise of the powers conferred by clause (v) of sub-section (23C) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies Sri Sankaracharya Swamigal Mutt Samasthanam, Kumbakonam, for the purpose of the said section for and from assessment year(s) 1972-73.'
9. and the above passage was reported in [1976] 104 ITR 13.
10. Learned counsel for the petitioner herein also relies on the decision in S. K. Muthukumaraswami Thambiran v. Agrl. ITO : [1978]113ITR889(Mad) , for the scope and ambit of section 4(b) of the Tamil Nadu Agricultural Income-tax Act, 1955, and refers to the following observation of Mohan J., which occurs at pages 891 and 892 :
'Mr. K. Venkataswami, learned Additional Government Pleader in meeting this submission states that my judgment in W.P. Nos. 422 and 423 of 1975 (Rajam chettiar Annadhana etc., Charities v. Agricultural Income-tax Officer) requires reconsideration, since when the amending Act introduced section 4(b), it was with the avowed object of subjecting agricultural income derived by a charitable and religious trust to tax, and all the more so, when the very purpose of the Act, namely, the Tamil Nadu Agricultural Income-tax Act, is to levy tax on agricultural income. Therefore, if section 10 of the Indian Income-tax Act alone got incorporated, the agricultural income held by a religious or a charitable trust would be exempt. That would frustrate the very amendment. Consequently. what have to be looked into are sections 11, 12 and 13 of the Income-tax Act, 1961. Having regard to the language of section 4(b) of the Act, namely,' to the same extent to which income derived from property held under trust wholly or partly for charitable or religious purposes', it should have reference only to the non-agricultural income. In other words, what has to be found out is whether under the Income-tax Act, income derived from non-agricultural property held by a charitable or religious trust is taxable to the same extent agricultural income would be taxable under section 4(b) of the Act. Any other interpretation would lead to utter confusion. It would amount to attributing unwisdom to the Legislature as if the Legislature was not aware of section 10(1) of the Income-tax Act, which confers a specific exemption as far as the agricultural income is concerned.
Man grows wiser by experience; and this principle is aptly illustrated in this case. In my judgment in W. P. Nos. 422 and 423 of 1975 (Rajam Chettiar Annadhana, etc., Charities v. Agrl. ITO), the aspect which is now put forth by the learned Additional Government Pleader was not urged. By stating so, I do not propose to disown the responsibility for my judgment. In fact, the interpretation sought to be placed by learned counsel for the petitioner found acceptance at my hands as a result of which I held that the agricultural income would be exempt. By such an interpretation, the very object and the purpose of section 4(b) of the Act got thwarted. As rightly contended by the learned Additional Government Pleader, the object of the Agricultural Income-tax Act is to tax agricultural income. Such an income derived from a charitable or religious trust was exempt till the amending Act 4 of 1973. It was this exemption which was sought to be withdrawn so that, that income also would become liable for taxation. Could it be said, under those circumstances, that the Tamil Nadu Legislature looked at section 10(1) alone and wanted to incorporate that provision of the Income-tax Act If that be so, how could this purpose be achieved Of course, it may be possible to contend that, however well intentioned it might have been, it was not carried out in effecting the amendment. In fact, that is the contention urged on behalf of the petitioner. I am unable to accept this contention since it would lead not only to frustrate the object of the section but also it does not even appear to be a good construction. As to why I held so will be evident from the following. Section 4 defines the scope of total agricultural income. Originally, all agricultural income derived from land situated within the State, which is received by the assessee or which accrued to him within or without the State, was assessable. But that income did not include, in view of clause (b) as it stood then, any agricultural income derived from property held under trust or other legal obligation wholly for religious or charitable purpose, and in the case of property so held in part only for such purpose, the income applied thereto. This exemption is withdrawn by amending section 4(b). That amendment reads :
'any agricultural income derived from property held under trust, wholly or partly for charitable or religious purposes to the same extent to which income derived from property held under trust wholly or partly for charitable or religious purpose, is not included in the total income for purposes of the Income-tax Act, 1961 (Central Act 43 of 1961).' What does 'the income derived from the property held under trust wholly or partly for charitable or religious purposes' mean Is it to mean only non-agricultural income Otherwise, the Legislature could have either said agricultural income or, to avoid redundancy, such income, meaning thereby agricultural income, and this is spoken to in the beginning of this clause. If this is the interpretation, reference to section 10(1) of the Income-tax Act was not in contemplation. What then are the sections of the Income-tax Act that are sought to be incorporated It is where sections 11, 12 and 13 of the Income-tax Act required to be looked at. These sections occur under Chapter III which deals with incomes which do not form part of the total income.'
11. Learned counsel for the petitioner also refers to the provisions of section 10(1) of the Income-tax Act, 1961 (Act No. XLIII of 1961), which reads as follows :
'10. In computing the total income of a previous year of any person any income falling within any of the following clauses shall not be included - (1) agricultural income;'
12. He also refers to section 10(23C)(v) of the Income-tax Act, 1961 (Act No. XLIII of 1961), which reads as follows :
'(23C) any income received by any person on behalf of -...
(v) any trust (including any other legal obligation) or institution, being a trust or institution wholly for public religious purposes or wholly for public religious and charitable purposes, which may be notified by the Central Government in the Official Gazette, having regard to the manner in which the affairs of the trust or institution are administered and supervised for ensuring that the income accruing thereto is properly applied for the purposes thereof : Provided that any notification issued by the Central Government under sub-clause (iv) or sub-clause (v) shall have effect for such assessment year or years (including an assessment year or years commencing before the date on which such notification is issued) as may be specified in the notification.'
13. Learned counsel for the petitioner also pointed out to us section 11(1)(a) of the Income-tax Act, 1961 (Act No. XLIII of 1961), which reads as follows :
'11. (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income - (a) 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 India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of twenty-five per cent. of the income from such property.'
14. According to learned counsel for the petitioner, a combined reading of section 4(b) of the Tamil Nadu Agricultural Income-tax Act, 1955 (Tamil Nadu Act V of 1955), and section 10(23C)(v) and section 11(1)(a) of the Income-tax Act, 1961 (Act No. XLIII of 1961) will clearly show that any agricultural income derived from property held under trust, wholly or partly for charitable or religious purposes, to the same extent to which income derived from property held under trust wholly or partly for charitable or religious purposes, is not included in the total income for purposes of the Income-tax Act, 1961 (Central Act XLIII of 1961), is exempt, and the agricultural income so derived by the trust cannot be taxed.
15. Learned counsel for the petitioner further submits that there is no question of an statutory exemption being obtained by the petitioner herein under the Tamil Nadu Agricultural Income-tax Act from the Government of Tamil Nadu or there is any power vested with any authority under the Government of Tamil Nadu to grant exemption, especially, when the exemption under section 4(b) is given under the Tamil Nadu Agricultural Income-tax Act, 1955, which is tagged on to the provisions of the Indian Income-tax Act. The observations made in paragraph 7 by the Tribunal, under revision, according to learned counsel for the petitioner discloses complete ignorance of the Tribunal in not having applied its mind regarding the application of the provision of section 4(b) of the Act. The observation in paragraph 7 of the order of the Tribunal which contains the above finding by it, namely, that the petitioner herein has not obtained any such statutory exemption under the Tamil Nadu Agricultural Income-tax Act from the Government of Tamil Nadu is quite against the ratio in S. K. Muthukumaraswami Thambiran v. Agrl. ITO : [1978]113ITR889(Mad) .
16. The learned Government Pleader (Taxes) on behalf of the Revenue has also submitted his argument with respect to the observation of Mohan J., in S. K. Muthukumaraswami Thambiran v. Agrl. ITO : [1978]113ITR889(Mad) , wherein the original opinion held by His Lordship has further been elucidated and a definite opinion regarding the scope of section 4(b) has been laid down by the court. He also brought to the notice of this court that section 4(b), after amendment by the Tamil Nadu Act IV of 1973, dated January 10, 1973, is applicable to the facts of the instant case before us. There is no grievance for the Revenue in applying the ratio in : [1978]113ITR889(Mad) to the facts of the instant case before us.
17. Thus, on the question that arises for determination in this revision, we are inclined to observe, inasmuch as by a notification, the Central Government had exempted the petitioner herein from taxation and in view of the specific provision of section 4(b) of the Tamil Nadu Agricultural Income-tax Act, 1955, further enlightened by the observation of Mohan J., in S. K.Muthukumaraswami Thambiran v. Agrl. ITO : [1978]113ITR889(Mad) , that if a religious or charitable trust has been held to be exempt under the Central Act for a particular year, then no assessment is possible under the State Act in respect of agricultural income of that year. We also hold that if the agricultural income is found to be exempt in part under the Central Act, then the agricultural income will be exempt to the same extent, that is, in the same proportion.
18. In the instant case before us, in view of the notification referred to above, namely, Notification No. S. O. 1921, dated April 1, 1976 - Income-tax Act, 1961 : Notification under section 10(23C)(v), published in the Gazette of India, Part II, section 3(ii), page 1975, dated June 12, 1976, we hold that the petitioner herein is exempted from tax of the total income for the assessment year.
19. Accordingly, this tax case revision is allowed, granting exemption on the entire income. The order of the Tribunal is set aside and relief is granted to the petitioner herein for the entire income. Under the circumstances, there is no order as to costs.