Statutory exemption can be raised at revision stage; revisional authority cannot deny relief merely for prior omission.

A revisional authority exercising wide statutory powers under section 34 of the Kerala Agricultural Income-tax Act, 1950 must examine an exemption claim on its merits where the item is statutorily exempt, and cannot refuse relief merely because the claim was not made before the original assessing authority. Life insurance premia were specifically exempt under section 10(1)(e), so the omission to claim the exemption earlier did not confer taxability or defeat revisional jurisdiction to correct an assessment involving an item not liable to tax. The authority was therefore bound to reconsider the assessment on the basis that a statutory exemption may be raised at the revisional stage.

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Issues: Whether the Commissioner exercising revisional powers under section 34 of the Kerala Agricultural Income-tax Act, 1950 could refuse exemption for life insurance premia merely because the exemption had not been claimed before the original authority.

Analysis: Section 34 conferred wide revisional powers, including power to make enquiry and pass such orders as thought fit, subject to the Act. Section 10(1)(e) specifically exempted sums paid towards life insurance premia from agricultural income. Once the item was statutorily exempt, it was not taxable, and the revisional authority was bound to consider the exemption claim on merits even if it had not been raised in the original assessment. The omission to claim the exemption earlier did not deprive the revisional authority of jurisdiction to correct the assessment of an item not liable to tax. Authorities recognising that lawful exemption can be raised at the appellate or revisional stage supported this approach.

Conclusion: The revisional authority was not justified in refusing exemption solely on the ground that it had not been claimed before the original authority. The issue was answered in favour of the assessee.

Final Conclusion: The impugned revisional order could not stand, and the matter was required to be reconsidered by the revisional authority on the footing that a statutorily exempt item cannot be taxed merely because the exemption was not originally claimed.

Ratio Decidendi: A revisional authority exercising wide statutory powers must consider a claim for exemption that goes to the taxability of an item, and cannot decline relief solely because the assessee failed to raise the claim before the original assessing authority.

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