Business income held under trust remains exempt where "property" includes business and proviso (b) does not cut down the main exemption.

Income from business held under trust for religious or charitable purposes falls within the exemption in section 4(3)(i) because "property" was construed to include business. Proviso (b) was read as applying only to business carried on on behalf of such an institution, not to business itself constituting trust property, so it does not narrow the main exemption where the income is applied or accumulated for the trust's objects.

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Issues: Whether income derived by a religious and charitable trust from business held under trust is exempt from tax under section 4(3)(i) of the Indian Income-tax Act, and whether proviso (b) to that provision excludes such exemption.

Analysis: The word "property" in section 4(3)(i) was held to include business, so income from business held in trust for religious or charitable purposes falls within the main exemption when such income is applied or accumulated for the trust's objects. Proviso (b) was construed as dealing with a different field, namely income from business carried on on behalf of a religious or charitable institution, and not as cutting down the exemption for business itself held under trust. The Court relied on the plain language of the provision and agreed with the view that a proviso cannot be read to override the clear scope of the main enactment unless its words compel that result.

Conclusion: Proviso (b) does not defeat the exemption under section 4(3)(i) where the business itself is held under trust; the business income remains exempt from tax.

Ratio Decidendi: Income from business held under trust for religious or charitable purposes is exempt under section 4(3)(i), and proviso (b) applies only to business carried on on behalf of such an institution, not to business constituting trust property itself.

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