A building is not exempt from property tax under Section 88 (1) (c) of the Andhra Pradesh Municipalities Act, 1965, if rent is payable for the building.

K. RAMACHANDRA RAO, J.

( 1 ) THE only question that arises for consideration in this second appeal is whether the suit building which is owned by the plaintiff, the rents from which are being spent exclusively for educational purposes of poor Vysya students, is exempt from property tax under the Andhra Pradesh municipalities Act, 1965. The learned District Munsif held that the suit building itself is not used for any educational purposes and therefore, the exemption under Section 88 (1) (c) of the Act is not available to the suit building. The lower appellate court took a different view and held that as the income derived from the building is being used for educational purposes, the building is exempt from tax under section 88 (1) (c) of the Act.

( 2 ) THERE is no dispute in this second appeal that the building itself is not used for educational purposes and that the income derived by way of rentals from the suit building is being utilised for education of poor Vysya students. The question for consideration is whether the suit building is exempt from tax. Section 88 (1) (c) of the Act and the proviso thereto read as follows.- section 88 (1) :- the following buildings and lands shall be exempt from the property tax.- (a) x x x (b) x x x (c) Building used for educational purposes including hostels, public buildings, and places used for the charitable purpose of sheltering the destitute or animals, and libraries and play-grounds which are open to the public: (d) to (i) x x x x x provided that nothing in clauses (a), (b) and (c) shall be deemed to exempt from property tax any building or land for which rent is payable by the person or persons using the same for the purposes referred to in the said clauses. Explanation: The exemption granted under this section shall not extend to residential quarters attached to schools and colleges not being hostels or to residential quarters attached to hospitals, dispensaries and libraries. " on a plain reading or this section it is clear that to claim exemption from tax, the building itself should be used for educational purposes. It does not seem to admit of any doubt that if the building is not used for educational purposes, but the income derived from the building is used for educational purposes, the exemption cannot be claimed under Section 88 (1) (c ). This is further made clear by the proviso which clearly states that nothing in clause (c) shall be deemed to exempt from property tax any building or land for which rent is payable by the person or persons using the same for the purposes referred to in the said clauses. Therefore, where rent is payable by a person using the building for educational purposes, no exemption of tax can be claimed under section 88 (1) (c) of the Act. The learned subordinate Judge relied upon the decision in Pyda Suryanarayana Murthy vs. Municipal Council Coconada, (1) AIR. 1941, Madras, 877. In that case a portion of the house was rented by the Municipal council from the previous owner and was being used for the purpose of accommodating a school run by the Municipal council and the owner was in occupation of the other portion. But exemption from liability to property tax was claimed under section 83 of the Madras District Municipalities Act, 5 of 1920, which reads as follows:"the following buildings and lands shall be exempt from the property tax; (a) places set apart for public worship and either actually so used or used for no other purposes choultries, buildings used for educational purposes, and libraries and play grounds which are open to the public and from which no income is derived. "it was contended for the owner that the suit house was a house used for educational purposes, at any rate partially and therefore must be held exempt from liability to tax and that it did not make any difference whether the house was used for educational purposes by the owner himself or by the Municipal Council which had taken a lease of the house, and that whomsoever the hou

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