TMI Blog1939 (6) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... urposes, the income applied, or finally set apart for application thereto. In this sub-section charitable purpose includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility. Sardar Dayal Singh, a Sikh inhabitant of the Punjab died in 1898 having by his will dated 15th June, 1895, created three separate trusts, to be administered by three independent committees of trustees . Two of the trusts were for the establishment and maintenance of (1) an Arts College, (2) a public library. The third trust was declared by the 20th and 21st paragraphs of the will in the following terms:- XX. That my property in the stock and goodwill of the Tribune Press and Newspaper in Anarkali, Lahore, shall vest permanently in a Committee of Trustees consisting of the following members, viz.:- 1. Babu Jogendra Chandra Bose, M.A., B.L., Pleader, Chief Court, Lahore, 2. Mr. Charles Golak Nath, B.A., LL.B., Barrister-at-law, 3. Mr. Harkishen Lal, B.A., Barrister-at-Law, Lahore. XXI. That it shall be the duty of the said Committee of Trustees to maintain the said press and newspaper in an efficient condition, keeping up the liber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssenting. From this decision (4th June, 1935) the present appeal to his Majesty was brought, and at the first hearing-on 22nd and 23rd July, 1937,-it was considered by the Board to be desirable that the powers conferred by sub-section 4 of Section 66 of the Act should be employed to obtain further information. Accordingly by an Order in Council dated 29th July, 1937, it was directed in accordance with the advice tendered by the Board:- (2) that the case ought to be remitted to the High Court of Judicature at Lahore with a direction that the said High Court shall refer the case back to the said Commissioner under Section 66(4) of the Indian Income-tax Act 1922, first for the addition of such facts during the life-time of the Testator Sardar Dyal Singh as may bear upon the proper interpretation of the expression 'keeping up the liberal policy of the said newspaper' in Clause XXI of the will of the said Testator dated the 15th day of June, 1895, and secondly, for the addition of such facts as to a compromise dated the 1st day of December 1906, as may show whether the said compromise is binding on all parties interested in the estate of the said Testator. There is now b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian Income-tax Act with the observations of Lord Lindley in the case of Re Macduff, where after referring to a well-known passage in Lord Macnaghten's speech in Pemsel's case, Lord Lindley held that in English law there might be some purposes of general utility which might be charitable and some which might not, the true test being the spirit or intention of the Statute of Elizabeth (43 Eliz. c. 4) Learned counsel for the respondent in the present case while not apparently conceding that under the India statute the sole test to be applied to the object of a trust was that of general public utility was willing that this shouId be assumed in the present case. He suggested that the question whether an object was of general public utility was a question of fact to be found and stated by the Commissioner and not a question of law for the Court. Their Lordships while unwilling to pronounce upon any matter which has not been argued before them consider that the Courts in India might be misled if the Board appeared to cast doubt upon the view that the admissibility of a claim to exemption from income-tax must be determined by the language of the special provision made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew that a trust is beneficial to the public can establish that fact beyond question, trusts might be established in perpetuity for the promotion of all kinds of fantastic (though not unlawful) objects. Their Lordships are in agreement with this view and see nothing in the Indian Income-tax Act to discharge the Court of its responsibility in coming to a finding as to the character of the object of a trust-a matter which bears directly upon its validity. It is to be observed moreover that under the Income-tax Act the test of general public utility is applicable not only to trusts in the English sense but is to be applied to property held under trust or other legal obligation -a phrase which would include Moslem wakfs and Hindu endowments. The true approach to such questions in cases which arise in countries to which English ideas-let alone English technicalities-may be inapplicable was considered by the Board in Yeap Cheah Neo v. Ong Cheng Neo*** and it was well said by Sir Raymond West in an Indian case Fatima Bibi v. Advocate-General#:- But useful and beneficial in what sense? The Courts have to pronounce whether any particular object of a bounty falls within the definiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Society Ltd.:- A trust for the attainment of political objects has always been held invalid, not because it is illegal, for everyone is at liberty to advocate or promote by any lawful means a change in the law, but because the Court has no means of judging whether a proposed change in the law will or will not be for the public benefit, and therefore cannot say that the gift to secure the change is a charitable gift. And in In re Tetley, where the gift was for patriotic and charitable objects Russell, J., said:- But must every application of the fund for a patriotic purpose be beneficial to the community and therefore charitable? It seems to me that it is impossible to hold that. What is or is not patriotic is in may cases mere matter of opinion. Subsidising a newspaper for the promotion of particular political or fiscal opinions would be a patriotic purpose in the eyes of those who considered that the triumph of those opinions would be beneficial to the community. It would not be an application of funds for a charitable purpose. Again in Commissioners v. Temperance Council* Rowlatt, J., finding that the first purpose of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promotion of Conservative principles......... and that the education, the lectures and so forth were subsidiary to that which was the main and dominating purpose, then the fact that the lectures and so forth would be educative would not be sufficient to make the Trust a trust for charitable purposes only. Holding that the college was in effect an educational centre for the Conservative party and that this was in accordance with the trust deed, the learned Judge decided that the claim for exemption from tax could not be sustained. These English decisions are in point in so far only as they illustrate the manner in which political objects, in the wide sense which, includes projects for legislation is the interests of particular causes, affect the question whether the Court can regard a trust as being one of general public utility. In the original letter of reference it was not suggested by the Commissioner that the newspaper was intended by its founder to be a mere vehicle of political propaganda, and in the case of Sardar Dyal Singh it seems unreasonable to doubt that his object was to benefit the people of Upper India by providing them with an English newspaper-the dissemin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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