Charitable trust business income exemption upheld where "property" was read broadly and later provision did not narrow earlier relief.

Income from business held under a charitable trust was treated as exempt because the word "property" in Section 4(3)(i) of the Income-tax Act, 1922 was construed in its ordinary, wide sense to include business assets as well as cash, securities and other movable property. The later insertion of Section 4(3)(ia) was read as operating in a different field and not impliedly restricting the earlier special exemption. In fiscal interpretation, reasonable doubt was resolved in favour of the assessee, supporting exemption for the trust business.

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Issues: Whether income derived from a business carried on under a charitable trust was exempt from assessment under Section 4(3)(i) of the Income-tax Act, 1922, notwithstanding the insertion of Section 4(3)(ia).

Analysis: The word "property" in Section 4(3)(i) was construed in its ordinary and wide sense and was held capable of including business held under trust, as well as cash, securities and other forms of movable property. The later insertion of Section 4(3)(ia), which dealt with business carried on on behalf of a religious or charitable institution subject to stated conditions, was held not to cut down the scope of the earlier exemption in clause (i). The two provisions were treated as operating in different fields, and the later general provision could not be read as impliedly repealing or restricting the earlier special exemption. In a fiscal statute, any reasonable doubt had to be resolved in favour of the assessee.

Conclusion: The income from the charitable trust business was exempt under Section 4(3)(i), and the answer to the reference was in the affirmative in favour of the assessee.

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