Charitable trust exemption under agricultural income tax must be rechecked after verifying the trust deed and charitable status.

Section 4(b) of the Tamil Nadu Agricultural Income-tax Act, 1955 allows exemption for agricultural income from property held under trust for charitable or religious purposes to the extent corresponding income is excluded under the Income-tax Act, 1961. The assessee must establish its charitable status to claim the benefit, but the claim could not be finally rejected merely because the trust deed had not been produced on the existing record. The proper course is to verify the trust deed and re-examine the exemption claim afresh in accordance with law.

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Issues: Whether exemption under section 4(b) of the Tamil Nadu Agricultural Income-tax Act, 1955 could be denied solely because the trust deed had not been produced and whether the matter required reconsideration on proof of the assessee's charitable status.

Analysis: Section 4(b) grants exemption to agricultural income derived from property held under trust wholly or partly for charitable or religious purposes to the same extent as corresponding income is excluded under the Income-tax Act, 1961. The governing principle is that the assessee must establish its status as a charitable institution for the agricultural income-tax claim. Since the revisional authority proceeded on the footing that no trust deed had been produced, the existing material was insufficient to finally determine the exemption claim. The proper course was to verify the trust deed and examine the claim afresh in accordance with law.

Conclusion: The exemption issue was not finally negatived on merits and the matter had to be reconsidered after production and verification of the trust deed.

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