Charitable deduction cannot be reduced by a proportionate limit unless the statute expressly says so.

Where an assessee alone had a statutory right of appeal, the appellate authority could not, at the Department's instance, reopen factual findings that contributions to a charitable trust were actually spent for charitable purposes; the factual characterisation therefore remained undisturbed. The exemption claim was also not confined to 60% of the expenditure, because the relevant proviso restricted deduction only where the same amount had already been deducted under the Act or under the Indian Income-tax Act. In the absence of any prior deduction, no proportionate limitation could be imported into the charitable deduction, and the full amount remained admissible.

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Issues: (i) Whether, in an appeal by the assessee, the Board of Revenue could question the Assistant Commissioner's finding that the donations to the charitable trust were amounts actually spent for charitable purposes. (ii) Whether only 60% of the amounts spent by the assessee for charitable purposes was admissible as deduction under the Rules framed under the Assam Agricultural Income-tax Act.

Issue (i): Whether, in an appeal by the assessee, the Board of Revenue could question the Assistant Commissioner's finding that the donations to the charitable trust were amounts actually spent for charitable purposes.

Analysis: The statutory scheme conferred a right of appeal on the assessee under section 26, while the Department had no corresponding right of appeal. The absence of a departmental appeal meant that the Board could not, at the Department's instance, reopen findings of fact reached by the Assistant Commissioner. The character of the trust was not treated as a pure question of law, but as one involving factual findings followed by legal characterization. The Board, therefore, had no warrant to disturb the factual conclusion that the trust was charitable and that the contributions were actually spent for charitable purposes.

Conclusion: The question is answered in the negative, in favour of the assessee.

Issue (ii): Whether only 60% of the amounts spent by the assessee for charitable purposes was admissible as deduction under the Rules framed under the Assam Agricultural Income-tax Act.

Analysis: The relevant proviso to section 8 withheld deduction only where the amount had already been deducted under section 7 of the Act or in assessment under the Indian Income-tax Act. Since no such deduction had been allowed under the Income-tax Act, there was no statutory basis for restricting the exemption to 60% merely because agricultural income was computed on a proportionate basis in tea business assessments. The proportion applicable for determining agricultural income could not be imported into the exemption itself, as the Act did not impose such a limitation on charitable contributions.

Conclusion: The question is answered in the negative, in favour of the assessee.

Final Conclusion: The references were answered by holding that the Department could not reopen the factual finding on charitable expenditure in the assessee's appeal, and the assessee was entitled to claim exemption for the full amount contributed to the charitable trust.

Ratio Decidendi: Where the statute grants an appeal only to the assessee, the appellate authority cannot, at the Department's instance, disturb factual findings against the assessee's position; and a deduction or exemption cannot be curtailed by importing a proportionate limitation unless the statute itself expressly provides for it.

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