JALANNAGAR SOUTH ESTATE LIMITED Vs. COMMISSIONER OF TAXES
HIGH COURT OF GAUHATI
Jalannagar South Estate Limited
COMMISSIONER OF TAXES
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Nayudu J. -
(1.) THESE three references have been made by the Assam Board of Revenue and the following questions, which are common to all the three references, have been referred to us for our opinion :
(1) Whether, on the facts and in the circumstances of the case, the Board was competent in the course of appeals preferred by the assessee to question the finding of the Assistant Commissioner of Taxes to the effect that the amounts donated to Jalan Charity Trust were amounts actually spent for charitable purposes within the meaning for the Assam Agricultural Income Tax Act ?
(2) Whether, on the facts and in the circumstances of the case, the Board was justified in holding that only 60 per cent of the amounts actually spent by the assessee for charitable purposes from the agricultural income was admissible as deduction under rule 2(2) of the Rules framed under the Assam Agricultural Income Tax Act ?
(2.) BEFORE we answer these questions, it will be useful to refer briefly to the facts of the case. The assessee in each of these three references had made contributions to the Jalan Charity Trust in respect of various amounts and claimed exemption for the amounts so paid from being assessed to tax under the Assam Agricultural Income Tax Act, hereinafter referred to as the Act. The Income Tax Officer, refused to give any exemption and, against the order of the Income Tax Officer, he the assessees took the matter in appeal to the Assistant Commissioner under section 24 of the Act and the learned Assistant Commissioner found as follows : The appellant produced before me the articles of association of Jalans Charity Trust as made on 27th October, 1954, in support of the contention. From the said articles of association it is found that the expenditures are incurred for various charitable purposes like the extension of health and relief in the form of free distribution of medicine, establishment of institutions and societies intended to relieve poverty and distress and to help the poor students in prosecuting studies and other educational help.
(3.) AFTER such examination and consideration, the learned Assistant Commissioner came to the conclusion that the Jalan Charity Trust had been created for charitable purposes purely, and that the amount claimed by the assessee in each case was actually spent in the hands of the appellant for charitable purposes. On having come to this finding on the facts before him, the learned Assistant Commissioner granted an exemption of 60% of the amount claimed by the assessee in each case to have been spend by them for the Jalan Charity Trust.
Not satisfied with the 60% exemption that was granted to them by the Assistant Commissioner, the assessees took the matter up in appeal to the Board of Revenue and the Board of Revenue while confirming the decision of the Assistant Commissioner held that only 60% of the income which is treated as agricultural income would be the basis for granting the exemption in regard to the contribution to the charitable trust. So holding, they left the finding of the Assistant Commissioner of Taxes undisturbed. Nevertheless, at the instance of the assessees, they made the references to us. In this connection it will be useful to refer to some of the relevant provisions of the Act. Section 24 of the Act provided for an appeal against the assessment under the Act to the Assistant Commissioner of Taxes. Section 26 is the section which deals with the appeal to the Board of Revenue against the decision of the Assistant Commissioner. Particular reference need be made to subsections (1) and (4) of section 26 which are as follows :
26. (1) Any assessee objecting to an order passed in appeal under section 24 or passed in revision under sub -section (1) of section 27 may appeal to the Board within sixty days of the date on which such order is communicated to him...
(4) The Board may, after giving the assessee an opportunity of being heard, pass such orders thereon as it thinks fit, and shall communicate any such orders to the assessee and to the Commissioner. ;
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