TaxTMI 
TaxTMI 
1978 (9) TMI 53
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....fter granting the exemption under s. 8(1) of the Act which provides that " any sum derived from land held under such trust and actually spent for the said purposes (charitable or religious purposes) shall not be included in the total agricultural income of such assessee ". By Writ Petition No. 48 of 1968 [Mahant Sriniwas Ramanuj Das v. Agricultural Income-tax Officer [1973] 89 ITR 211 (Orissa)], filed under arts. 226 and 227 of the Constitution, the petitioner challenged the constitutional validity of s. 8(1) of the Act, under which the assessments were made, principally on the ground that s. 8(1) was discriminatory and hit by art. 14 of the Constitution inasmuch as under the said provision in respect of non-Muslim public trusts created for religious or charitable purposes the exemption contemplated therein was confined to such agricultural income as was actually spent for the public purposes of charitable or religious nature while in the case of Muslim trusts (wakfs) the entire agricultural income, whether spent for charitable or religious purposes or not, was exempt from the operation of the Act under section 9 of the Act. The contention was refuted on behalf of the respondents. ....
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....aintenance and support during his lifetime or for the payment of his debts out of the rents and profits of the property dedicated : Provided that the ultimate benefit is in such cases expressly or impliedly reserved for the poor or for any other purposes recognised by the Mussalman law as a religious, pious or charitable purpose of a permanent character." Mr. Mukherjee for the appellant contended that the exemption contemplated by s. 8(1) of the Act is confined only to such part of the income derived from agricultural lands held under a public charitable or religious trust as is actually spent for the charitable or religious purposes while under s. 9 all agricultural income of Mussalman trusts (wakfs) irrespective of whether the same is spent on public purposes of charitable or religious nature or not is exempt from the operation of the Act ; in other words in the matter of granting exemption, between the agricultural income of two types of public trust created for charitable or religious purposes, the Act has practised hostile discrimination against agricultural income of non-Muslim public trusts, the classification having no reasonable nexus with the object sought to be ach....
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.... imposing a tax on agricultural income derived from lands situated in the State of Orissa. Section 2(a) defines the expression " agricultural income " comprehensively. The charging provision is contained in s. 3 which provides that agricultural income-tax at the rate or rates specified in the Schedule shall be charged for each financial year in accordance with and subject to the provisions of this Act on the total agricultural income of the previous year of every person, the proviso, however, states that no agricultural income-tax shall be charged on the agricultural income of the Central Government or any State Government or any local body. Section 5 prescribes limits of taxable income while s. 6 prescribes the method and manner of determining the agricultural income of every assessee. Then come the two material provisions dealing with exemptions, namely, ss. 8 and 9, which have been reproduced above. The other material section which deals with exemption is s. 16 which provides that agricultural income-tax shall not be payable by an assessee in respect of any amount actually spent by him out of his total agricultural income for the benefit of the people of the State or for charita....
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....lea that s. 9 of the Act covers all Mussalman wakfs and not merely wakfs known as the wakf-alal-aulad and, therefore, it will be necessary to examine the provisions of s. 9 in order to ascertain whether the plea that it covers all Mussalman wakfs is warranted or not. Section 9 in terms says that the exemption thereunder is confined to Muslim trusts " referred to in s. 3 of the Mussalman Wakf Validating Act, 1913, " and the question is what wakfs are referred in s. 3 of the Mussalman Wakf Validating Act, 1913 (hereinafter called " the Validating Act "). The Validating Act, as we shall indicate presently, was enacted only for the purpose of validating wakfs in the nature of wakf-alal-aulad. As has been pointed out by this court in Fazlul Rabbi Pradhan v. State of West Bengal, AIR 1965 SC 1722, wakfs (which were primarily family settlements) in which the benefits to charity or religion were either illusory or postponed indefinitely while the property so dedicated was being enjoyed from generation to generation by the family of the wakf were regarded as opposed to the rule against perpetuity as contained in the Indian Succession Act and the Transfer of Property Act. The leading decisio....