SRI JAGADGURU KARI BASAVA RAJENDRASWAMI OF GAVIMUTT versus COMMISSIONER OF HINDU RELIGIOUS CHARITABLE ENDOWMENTS, HYDERABAD

1964 Thus, it is clear that the equitable principle of justice, .-' Murarilal equity .and good conscience has been consistently applied by v. Civil Courts in dealing with mortgages in substantial part ,'·:; Dev Karan of Rajasthan and that lends support to the contention of the Gajendragadkar respondent that it was recognised even in Alwar that if C. I. mortgage deed contains stipulation which unreasonably restrains or restricts the mortgagor's equity of redemption, courts were empowered to ignore that stipulation and enforce the mortgagor's right to redeem, subject, of course, to the general law of limitation prescribed in that behalf. We are, therefore, satisfied that no case has been made out by the appellant to justify our interference with the conclusion of the Rajasthan High Court that the relevant stipulation on which the appellant relies ought to be enforced even though it creates clog on the equity of redemption. In the result, the appeal fails and is dismissed with costs.

Appeal dismissed

SRI JAGADGURU KARl BASAVA RAJENDRASWAMI OF GAVIMU'IT

May, 8 v. COMMISSIONER OF HINDU RELIGIOUS CHARITABLE ENDOWMENTS, HYDERABAD (P. B. GAJENDJUGADKAR, C.J., M. HIDAYATULLAH, J. c. SHAH, RAGHUBAR DAYAL AND S.M. SIKRI, JJ.) Constitution of India, Art. 19(1)(/)-Mutt-Framing of 5clreme-Repeal of old Act by new Act-Promulgation of Comtitution -in the meantime·-Notice on Matadhipati to hand over possession to Executive Officer-Validity-Scheme, it must be tested by funda~ mental rights conferred by the Constitution-Madras Hirz•lu Religious and Charitable Endowments Act, 1951 (Mad. XIX of 1951), ss. 103(d), 62(3)(a)-(Mad. 11· of 1923), a. 63. lbe appellant, who was Matadhipati, moved the High Court for writ quashina the notice served on him in 1952 by the Executive Oftlcer to hBDd over to the latter the administration and the properties

of the Mntt in enforcement of scheme framed in 1939 under s. 63 1964 of the Madras Act II of 1927. The predecessor of the appellant had S . 1 filed suit in the District Judge's Court to set aside that scheme. The " a~~dguru suit failed and_ the scheme was confirmed subject to minor modifications. CommLuioner o] In 1951 the Madras Hindu Religious aud Charitable Endowments Act, Hindu R~ligiouJ 1951, repealed and replaced the Madras Act II of 1927. It was urged Cltaritable Endow· on behalf of the appellant in the High Court that the scheme contravened ments his fundamental rights guaranteed by the Constitution. The sinilC Judge who heard the matter found in his favour and held that the sche1.r.1e contravened Art. 19( 1 }(f) of the Constitution. On appeal by the respondent, the Division Bench reversed the decision of the Single Judge. The High Court granted certificate to the appdlant to appeal to this Court. It was contended that although the scheme was valid as framed under the earlier Act, it incumbent under s. 103(d) of the Act of 1951 that the validity of the all the provisions of the schemo must be tested in the light of its provisions.

R~ligiouJ Endow· ments

Held: Section 103{d) of the Madras Hindu Religious and . Charitable . Endowments Act, 1951, properly constn1ed, merely meant that earlier schemes framed under M2.dras Act II of 1927 wou!c.l be operative as though they were framed under the Act of 1951. 1t was n:'>t intended by the section that those schemes must be examined and reframed in the light of the relevant provisions of the Act. Section ~2{3 )(a) of the Act which provided for the modification of such schemes made this amply dear. Unless the schemes could be modified under that section tbey must be deemed to have been validly made under the Act of 1951 and enforced as 5uch.

East E11d Dwellings Co. Ltd. v. Finsbury Borough Council, {t952J A.C. 109, considered ..

Althou~h the scheme in question bad not been completely imple~ mented before the Constitution, that was no ground for e~~.mi"nin~ its provision in the light of Art. 19 of the Constitution.

The fundamental rights conferred by the Coostitution are not retros-pective in operation and the observation made by this Court in Seth Shanti Sarup v. Union of India, are n"ot applicable to the pre.~eut case.

Seth Shanti Sarup v. Union of India, A.I.R. 1955 S.C. 62-i, explained and distinguished.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 745 t)f 1963.

Appeal from the judgment and order dated February 6, 1961 of the f\ndhra Pradesh High Court in \Vrit Appeal No. 71 of 1957.

A. V. Vi.rwanatha Sastri, K. Rajendra Chaudhuri and

K. R. Chaudhuri, for the appellant.

R. Ganapathy lyer and B. R. G. K. Achar, for the

respondents.

Sti JagadgUiu v.

Judgment of the Court was

May 8, 1964. The

C~mmissione~. of Bmd~;~ Relzg1ous delivered by ClumUJble Endow-ments

GAJENDRAGADKAR, C. J .-The appellant Shri Jagadguru Kari Basava Rajendraswami of Gavi Mutt is the Matadhipati of Sri Gavi Mutt which is religious institution dedicated to the propagation and promotion of the tenets of the Veer~ Saiva cult of Hinduism. This Mutt is situated at Uravakonda in the district of Anantapur. It appears that on the 6th September, 1939, the Board of Hindu Religious Endowments constituted under the Madras Act ll of 1927 (hereinafter called 'the earlier Act') framed scheme under s. 63 of the said Act for the proper adminis-tration of the said Mutt and its endowments. The pre-decessor-in-office of the appellant then filed suit N(.). 21 of 1939 on the file of the District Judge, Anantapur for getting the said scheme set aside. His suit substantially failed, because the District Court was persuaded to make only few minor modifications in the scheme subject to which the scheme was confinned. That decision was taken in appeal by the predecessor of the appellant to the High Court of Madras (A.S. No. 269 of 1945). During the pendency of the said appeal, the appellant's predecessor died, and the appellant then brought himself on the record as the legal repre$entative of his deceased predecessor. Ultimately, the appeal was withdrawn and, therefore, dismissed.

Gtljbrdragadk,ar C.J.

Though scheme had been formulated by the Board under s. 63 of the said Act, apparently no effective step was taken to take over the actual management of the Mutt and its endowments. The said management continued as before and the fact that an Executive Officer had been appointed under the scheme made no difference to the actual administration of the Mutt. It was on the 5th April, 1952, that the appellant was served with memorandum asking him to hand over the charge of all the properties of the Mutt to the Executive Officer. notice issued by the Executive Officer followed on the 16th April, 1952 by which the appellant was infonned that the Executive

Officer would take over possession. Meanwhile, what is 1964 known as the _Sirur Mutt case was decided by the Madras s,; Jagadguru r . V.· High Court and the appellant felt justified in refusing to . . ... ommusloner o 1 hand over possess10n to the Executive Officer on the ground Hindu Religio11s that the scheme under which possession was sought to be Charitable Endow-. I'd . . ment1 t ale en over rom him was mva 1 masmuc as 1t contravene the appellant's fundamental rights guaranteed by the Consti-Gaiendragadkar C.J. tution which had come into force from the 26th January, 1950.In 1951, the Madras Hindu Religious and Charitable Endowments Act XIX of 1951 (hereinafter called 'the latter Act') repealed and replaced the earlier Act. The appellant moved the Madras High Court on the 28th April, 1952, by his writ petition and prayed for an appropriate writ quashing the notice served on him by the Executive Officer threatening to take over the administration of the 11utt and its properties under the scheme. This ·petition was heard by single Judge of the said High Court and was allowed. The learned Judge took the view that some pro-visions of the Scheme contravened the appellanfs funda-mental rights under Art. 19(1)(£), and so, it couJd not be enforced. It was no doubt urged before the Iear!led Judge that the appellant's writ petition should not be entertained because he had definite adequate alternative remedy under the latter Act, but this plea was rejected by the learned Judge with the observation that where the funda-mental right is clearly infringed, it is the duty of the Court to interfere in favour of the citizen, unless there n re reasons it do so. of policy which make inexpedient to According-ly, the learned Judge directed that the scheme should be quashed. He, however, took the precaution to m·ake t11e observation that his order did not mean that the Govern-ment was not free to make scheme in consomme~ with the Constitutional rights of the Matadhipati.

The Tespondent. the Commissioner of Hindu Religious and Charitable Endowments~ who had been imp1eaded by the appellant to the wnt petition 'alontr with the Executive Officer, challenged the cnirectness of the decision rendered by the learned Judge in the writ petition filed by the appel-

1964 lant. This appeal sueceeded and the Division Bench which Sri Jagadguru heard the said appeal, held that the scheme having been u."fo 1 [framed ][as ][early ][as ][1939 under ][the ][relevant provisions ][of ]·Hr;r; let&lo~s the earlier Act which was valid when it was enacted, could Charltabk Endow· not be challenged on the ground that some of its provisions ~ contravened the fundamental right guaranteed to the Gaien~r~gadkor citizens of this country under Art. 19. Certain other con-. tentions were raised before the appellate Bench by the-appellant and they were rejected. It is, however, not necessary to refer to the said contentions, because they have· not been argued before us. Having taken the view that the-scheme when it was framed was valid, the appellate Bench reversed the decision of the single Judge, alowed the· respondent's appeal and directed that· the writ petition filed by the appellant should be dismissed. It is against this. decision of the Division Bench that the appellant has come to this Court with certificate granted by the said High Court.

Before dealing with the points which have been raised before us by Mr. Sastri on behalf of the appellant, we may briefly indicate the nature of the scheme which bas been framed under the relevant provisions of the earlier Act. This scheme opens with the statement that the Board was satisfied that in the interests of the proper administration of the Mutt and all the endowments, movable and. immovable belonging thereto, scheme should be settled, and so, the Board, after consulting the 11atadhipati of the Mutt and other persons having interest therein, proceeded to frame the scheme. It was intended that the scheme should come into force on the 6th September, 1939, when it was framed. It appears that either because the Executive Officer did not take effective steps to implement the scheme, or because-the predecessor_ of the appellant filed suit ~hallenging the 6cheme, the scheme in fact has not been implemented till today. When the notice was served on the appellant in 1952 and it looked as if ,~he Executive Officer would take over the administration of the Mutt and its properties, the present writ proceedings commenced and throughout the protracted period occupied by these proceedings. the statuJ quo has continued.

The scheme consists of 15 clauses and, in substance, it 1964 entrusts the administration of the Mutt and all its endow-Sri Jagadguru Jagadguru ments · in the hereditary trustee and two non-hereditary . v. v. . c[ . ommlss 10ne r 10ne r r t trustees appomted by the Boar . These latter are liable to Hindu Religioz. be removed by the Board for good and sufficient cause and Clurritahle Ef!dot the Board's order in that behalf has to be final. The Boar<..! ~ is authorised to appoint an Executive Officer for the Mult Gaiendrugadka! on salary of Rs. 60/- per month. Such Executive Officer c. J. J. is- required to furnish security in the sum of Rs. 500/ o:o to the satisfactiOn of the Board. He has to be in charge of the day to day administration of the Mutt and he has to be answerable to the trustees. The trustees are required to meet once month in the premises of the Mutt for discharg-ing their duties. They are given the power to inspect the accounts maintained by the Executive Officer and generally supervise his work. The Board is also given the power to issue directions from, time to time regulating the internal management of the Mutt. It would thus be seen that though the scheme was framed in 193'9, in essential features it is similar to the pattern of schemes which have been subsequently introduced either by legislation or by judicial decisions in respect of the management of public charit-able institutions like the present Mutt.

Sri Jagadguru Jagadguru . v. v. ommlss 10ne r 10ne r r t Religioz. Clurritahle Ef!dot ~ Gaiendrugadka! c. J. J.

Mr. Sastri does not dispute the fact that the relevant

provisions of the earlier Act as well as the scheme framed under them were valid at the relevant time. He, however, argues that the earlier Act has been repealed by the latter Act XIX of 1951, and according to him, it is necessary to consider whether the present scheme is consistant with the appropriate and relevant provisions of this latter Act. Thi~ argument is based ou the provisions contained in s. l03(d-) of the latter Act. This section provides that notwithstand-ing the repeal of the Madras Hindu Religious Endow-ments Act No. II of 1927, all schemes settled or modified by Court of law under the said Act or under s. 92 of the Code of Civil Procedure, 1908, shall be deemed to have been settled or modified by the Court under this Act and sha11 have effect accordingly. The argument is that thouf!h the present scheme was framed under the provisions of the earlier Act, it m.ust now be deemed to be scheme which 51 S.C.-17.

1964 -has been settled or modified by the Court under this latter Sri Jagadguru Act, and so, it ~ necessary to enquire whether all the pro-c mmmssloMr . V.· o 1 [visions of the scheme are consistent ]. . . . [with ][the material pro-]Hindu Religlou' VISion·s of the latter Act. It JS found that any of the said Charirc:blt Endow· provisions are inconsistent with tbe relevant provisions of ment1 . -the latt~r Act, they must be modified so as to make them Gaiendragadkar consistent with the said provisions. C.J.

In support of this argument, Mr. Sastri has invited our attention to the observations made by Lord Asquith of Bishopstone in East End Dwellings Co. Ltd. v. Finsbury Borough Council ( [1]) that "if you are bidden to treat an imaginery state of affairs -as real, you must surely, unless prohibited from doing so, also imagine as real the conse-quences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it." Basing himself on these observations, if ... Mr. Sastri has urged that the deeming provision prescrib ed by s. 1 03 (d) is given its full effect, there would be no scope for refusing to apply the test for which he contends.We are not impressed by this argument. It is no doubt true that s. 103 (d) provides that scheme settled or modi-fied by Court under the earlier Act shall be deemed to have been settled o~ modified under the latter Act; but the effect of this provision merely is to make the schemes in question operative as though they were framed under the provisions of the latter Act; the intention was not to examine the said scbpmes once again by reference to the relevant provisions of this latter Act and re-frame them so as to make them consistent with these provisions. This position appears to be clear if we examine other sub.clauses of s. 103. Section 103(a) which deals with rules made, noti:-fications or certificates issued, orders passed, decisions made, proceedings or action taken, schemes settled and things done by the Government, the Board or its President or by an Assistant Commissioner under the earlier Act, provides tl)at the said rules, notifications, etc. in so far as they are not inconsistent with the latter Act, shaU be deemed to have been made, issued. oassed, taken. settled or done by

(I) [1952] A.C. 109 at p. 132.

.the appropriate authority under the corresponding provi-1964 swns of this latter Act and shall, subject to the provisions Sri Jagadguru or clause (b) have effect accordingly. Having thus provid-.. . V:· · · 1 'fi · Commrss1oner of ed tor t contmuance o rues, nob cations, or ers, etc.~ flindu Religlo111 111 in so far as they are not inconsistent with the provisions of Charitable Endow· the Jatte1 Act, s. 103(b) has made pr€>vision for the modi-~ fications in the said rules~ notifications and orders. l n Gajengr)gadkar .other words, the scheme of s. 103 (a) & (b) clearly brings · · out the fact that where the legislature wanted the conti-nuance of the action take'l under the provisions of the earlier Act only if the said action was consistent with the relevant provisions of the latter Act, it has so provided. The same type of provision is made by s. H)3(f), (g) and (h). If we examine s. 103(d) in the light of these other provi-sions, it would be clear that the question of the consistency or otherwise of the schemes to which s. 103 (d) applies. is treated as irrelevant, because no reference is made to the said aspect of the schemes. 1 n ·other words~ the schemes to •. ,:hich s. 103 (d) applies have to be deemed to be settled or modified under the provisions of the latter Act without examining whether aU the provisions of the said schemes are necessarily justified by, or consistent with. the provi-sions of this latter Act; and that is why we dn not think Mr. Sastri js right in contending that the deeming clause prescribed by s. 103 (d) necessitates an examination of the said schemes before they are allowed to be continued as though they were sett1ed or modified under the Jatter Act.

Sri Jagadguru .. . V:· Commrss1oner of flindu Religlo111 111 Charitable Endow· ~ Gajengr)gadkar · ·

This does not, however, mean that there is no provision prescribed by the latter Act for the modification of such schemes. Section 62 ( 3) (a) specifically provides that any scheme for the administration of a. religious institution settled or modified by the Court in suit under sub-section { I ) or on an appeal under sub-section ( 2) or any scheme deemed under s. 103, clause (d), to have been settled or modified by the Court may, at any time, be modified or cancelled by the Court on an application made to it by the Commissioner, the trustee or any person having inter-est. This provision clearly brings out the fact that if scheme governed by s. 103 (d) is deemed to have been made or sanctioned under the provisions of the latter Act1964 and thus continued, m6difications in it can be etfected by Sri Jagadguru adopting the procedure prescribed by s. 62( 3). 'In other , v_-. words, scheme like the present is automatically continued ~ommlsvloner Ilindu Religious of Y operatiOn o . s. 103(d) • ut 1s . 1' 1a bl to m od'fi 1 t 'f Charitable Endow- appropriate steps are taken in that behalf under s. 62 ( 3). mems Reading s. 103(d) and s. 62(3) together, it seems to us Gajendragadkar that Mr. Sastri's argwnent that the consistency of the c. J. scheme with the relevant provisions of the latter Act should be examined in writ proceedings, cannot be entertained. In fact, unless modifications are made in the scheme under s. 62(3), the scheme as whole, will be deemed to have been made under the latter Act and will be enforced as valid scheme. That clearly is the purpose of s. 1 03 ( I. Therefore, we do not think we are called upon to consider the further contentions raised by Mr. Sastri that some of the clauses in the scheme are inconsistent with the provisions of the latter Act.

There is one more point to which reference must be made before we part with this appeal. Mr. Sastri contend-ed that though the scheme may have been valid when it was framed, since it was not actually enforced before the 26th January, 1950, it is open to the appellant to challenge the validity of the scheme on the ground that it deprives him of his fun dam en tal right under Art. 19 ( 1 ) (f) and as such, invalid. Mr. Sastri concedes that the fundamental rights guaranteed by the Constitution are not retrospective in operation; but that, he says, is no answer to his plea, because the deprivation of his property rights is taking place for the first time ia 1952 and as such, it is open to the. challenge that it is invalid on the ground that it contra· venes his fundamental right under Art. 19{ 1) (f).

In support of this argument, Mr. Sastri has relied on certain observations made by Mukherjea J. in the case of R. S. Seth Shanti Sarup v. Union of India and Ors(l). In that case, partnership firm known as Lallamal Hardeodas Cotton Spinning Mill Company of which the petitioner was partner, used to carry on the business of production and supply of cotton yam. When it was found that the Mill

(I} A.I.R. 1955 S.C. 624.

s s.C.R ...

_ could be rutf only at loss, it was closed on 19th March, . 1964 19[49. ]['Thereafter, ][~n ][the ][21st ][~uly, ][1949> ][the ][Government . ][Sri J;;dguru ]

· of u .P .. passed an order purportmg to exercise its authority

v. i.uione! of m u Rel1glou.r 1glou.r u.r Charitable Endo.,... ' . menu

_under s. 3(f) of the U.P. Industrial Disputes Act 1947 CH~mmd i.uione! of . .' ' m u Rel1glou.r 1glou.r u.r _ by whi~h one of the ~artners of the ns:m was appo~ted as Charitable Endo.,... · ~authonsed controller' of the undertaking. The said order menu

; directed the said authorised controller to take over posses-

Guiendrogadl.:ar C. [1]•

: ~on of tbe .Mill to the exclusion of th!! other partners, and i run it sl{bject.to the general supervision. of the District : Magistrate, Aligarb. In 1952, the Unio!l of India passed · an order under s. 3 ( 4) of the Es~ential Supplies (Tempo. rary Powels) Act, 1946, appointing the same person ns an authorised controlJer under the provisions of that section, and issued direction to him to run the said undertaking io the exclusion of all the other partners. It was then. that the petitioner moved this Court by writ petition under Art. 32 and ~hallenged the validity of both the orders on the ground that they were illegal and that they invaded ru.~ fundamental right. His plea was upheld and both thP. _ impugned orders were quashed.

• In appreciating the effect of this decision, it is n~ces· · ~,..r)t to bear in mind one cruciul fact on which therl! was no di ,pute between the parties in that case, and that fact \\';h thut both the impugned orders did not come wilhin th~ purview of. and were not warranted by, the provisions of tlte rcl.vant Acts. under which they were purported to . have been issued. In other words, it was conceded by the ... Go\ernmc:nt tbat the impugned orut!r;, w~r~ invalid in law. Even so, it was urged that though the orders :nay be invalid, they cannot be cha1leng.ed under Art. 32 inasmuch as tl1e first invasion of the petitioner's right w.as made in 1949 when the Constitutional guarantee was not availnble to him. In repelling this contention, ~fukherjea, J., observed that the order against which the petition was primarily directed Was the order of the Central Government passed in October, _-_ ~[9]52, ~nd that was ~mplete and clear answer to the .. ontcntJon raised by the learned Attorney-General. Even s~. the learned Judge proceeded to observe that assuming \at the deprivation took pJnce in 1949 and at o time when t Constitution had not come into force, the order effect·

1964 ing the deprivation which continued from day to day must Sri Jagadguru be held to have come into conflict with the !undamenta! ~ommi.rsr~ner of rights of the petitioner as soon as the Constitution came into· ~indu Religious force and became void on and from that date under Art ~haritable ment., Endow- 13 ( l ) o th c-· onstltutlon. . . l t IS . on tnese . observations . . that . Mr. Sastrfs argument is founded. With respect, we are Gajendragadkar c. 1. not prepared to hold tha,t these observations vtere intended to lay down an unqualifie~ proposition of law that even it· citizen was deprived of his fundamental right:; by valid scheme framed under valid law at time when the Consti·· tution was not in force, the mere fact that such schem~ wou!d continue to opera~e even after the 26th January. 1950, would expose it to the risk of having to face chal-ienge under Art. 19. If. the broad and unqualified proposi-tion for which Mr. Sastri contends is accepted as true, then it would virtually make the material provisions of the Constitution in reSpect of fundamental rights retrospective in operation. In the present case, the scheme was framed and the Executive Officer was appointed as e3rly as 1939. If the Executive Officer could not take over the actu:1r administration of the Mutt and its properties. it was partly be~ause the a!'pellant has continuously challenged the implementation of the scheme by legal proceedings and partly because he has o~erwise obstructed the said imple-mentation. But it is clear that when the scheme was framed and challenge made by the appellant to its validity failed in courts of law~ his property rights had been taken away. The fact that the order was not irnolemented does not make any difference to this legal position. If Mr. Sastri's argu· ment were right, all such· schemes, though implemented find enforced. may still be open to challenge on the ground that they contravened the Matadhipati's · fundamental rights under Art. 19. Such plea does not appear to have ever been raised and, in our opinion, cannot be validly raised for the simple reason that the fundamental rights are not retrospective in their operation. The observations on which Mr. Sastri relies must ·be read in the light of the---relevant fact to . which we have -just referred. The depri-vation of the petitioner~& property rights w~s brought about by invalid orders and it was in respect. of such invalidorders that the Court held that the petitioner was entitled 1[964 ]to seek the protection of Art. 19 and invoke the jurisdic-Sri Jagadguru tion of this Court under Art. 32. In our opinion, there- . ~-. . . . vmmzs.noner o fore, there is no substance m the contention that smce m tlindu Religim1. the present case, the scheme has not been completely imple- Charit",!!.~!t;ttdow mented till 1952, we mu.St examine its validity in the light -of the fundamental rights guaranteed to the appellant under Gujen~~~tr,:;;tlr Art. 19 of the Constitution. The result is, the appeal fails and is dismissed with costs.

Appeal dismisst!.:l.

COivli\HSSTONER OF INCOME-TAX'; NEW DELHI

AN ANT RAO B. KAMA T

(K. SuBBA RAo. J. C. SHAH AND S. M. SIKRI, JJ.)

Income-tax-Dividend declared and paid· in different yearJ-Ratt: of which year applicable-Meaning of 'rehate'-Is tlrere an)' tUstinction between rebate under Finance Act and the rebate zmda other statutes-Indian Income-tax Act~ 1922 (ll of 1922), ,~.1·. 16(5), 60A-Part States (Taxation Concession) Order, 1950.

The assessee had received in the previous years (1950-51 a.nd 1951-52) dividends from two companies. These companies had {l}een allow"'d rebate under the Part Jl States (Taxation Concession) Order, 1950. For the assessment years 1951-52 and 1952-53, the assessee claimed before the Incomt!·tax Officer that the dividend received by him should be "grossed up" under s. 16(2) of the Act, without taking into con· sideration the rebate allowed to the said companies under the said concession order. On construction of s. 16(2) the assessee pleaded that the rate applicable to the total income of the said ·companies was the rate prescribed by the relevant Indian Finance Act. The Income-tax Officer grossed up at the State rnte and not at the rate presrribed by the relevant Finance Act. Before the Tribunal and the High Court tile assessee succeeded.

Held: (i) Iu interpreting s. 16(2) effect must be given to these words occurring in the said section 'without taking iuto account any re~te-

J()(j.f

Ma.v, S