Co-extensive tax exemption for charitable trust income barred assessment of corresponding agricultural income under the State Act.

A trust notified by the Central Government under section 10(23C)(v) was held entitled to corresponding exemption from agricultural income-tax under section 4(b) of the Tamil Nadu Agricultural Income-tax Act, 1955, because that provision grants exemption co-extensive with the exclusion available under the Income-tax Act for trust income. Once the trust's income was exempt for the relevant assessment year under the Central Act, the matching agricultural income could not be assessed under the State Act to the same extent. Full exemption from agricultural income-tax was therefore available for the relevant year, and the Tribunal's contrary order was set aside.

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Issues: Whether a trust notified by the Central Government under section 10(23C)(v) of the Income-tax Act, 1961, is entitled to corresponding exemption from agricultural income-tax under section 4(b) of the Tamil Nadu Agricultural Income-tax Act, 1955.

Analysis: Section 4(b) of the Tamil Nadu Agricultural Income-tax Act, 1955, grants exemption to agricultural income derived from property held under trust for charitable or religious purposes to the same extent to which the income from such property is excluded from the total income under the Income-tax Act, 1961. The Central Government notification under section 10(23C)(v) exempted the assessee-trust for the relevant assessment year, and the Court applied the statutory parity embodied in section 4(b). On that basis, once the trust's income is exempt under the Central Act for the relevant year, the corresponding agricultural income cannot be assessed under the State Act to the same extent.

Conclusion: The exemption under the Central Income-tax Act operated for the relevant assessment year, and the assessee was entitled to exemption from agricultural income-tax on the entire income.

Final Conclusion: The revision succeeded, the Tribunal's order was set aside, and full exemption from agricultural income-tax was granted.

Ratio Decidendi: Where the State agricultural income-tax provision grants exemption co-extensive with the exclusion available under the Income-tax Act for trust income, a valid Central Government notification exempting the trust for the relevant year precludes assessment of the corresponding agricultural income under the State Act.

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