Trust income from business qualifies for charitable exemption when the business itself is held under trust.

Income derived from a business held under trust for religious or charitable purposes was treated as income from property held under trust, because "property" in section 4(3)(i) of the Income-tax Act, 1922 includes a business. Section 4(3)(ia) was construed as applying to business carried on on behalf of a religious or charitable institution where the business itself is not held in trust. The two provisions were held to operate in different fields, so section 4(3)(ia) did not narrow section 4(3)(i). On that construction, the income fell within section 4(3)(i) and the exemption was available.

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Issues: Whether income from a business carried on by trustees under a trust deed fell within section 4(3)(i) of the Income-tax Act, 1922 or section 4(3)(ia) of the Income-tax Act, 1922.

Analysis: Section 4(3)(i) grants exemption to income derived from property held under trust for religious or charitable purposes, and the term "property" includes business held under trust. Section 4(3)(ia) deals with income from business carried on on behalf of a religious or charitable institution and is not confined to business held in trust. The two clauses were construed as dealing with different fields so that clause (ia) does not cut down the scope of clause (i); rather, clause (ia) applies where the business itself is not held under trust.

Conclusion: The income in question fell under section 4(3)(i) and not section 4(3)(ia); the exemption was therefore available to the assessee.

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