TMI Blog1945 (9) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... in the course of carrying out the primary purposes of the trust and that the trust was not entitled to exemption from tax under clause (ia) of Section 4(3) of the Income-tax Act. But it was contended that the income was not liable to be taxed at the maximum rate under the proviso to sub-section (1) of Section 41 of the Income-tax Act, 1922, for the reason that the income was devoted to the purposes of the temple of Shri Radha Madho, who, as a juridical person, was a known beneficiary. The Income-tax authorities, while conceding that the idol was the beneficiary, held that as the beneficiaries of the dharmashala and the sadavart were a fluctuating body of persons and therefore indeterminate, the trustees did nor receive the income as a whol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion even though trustees carried on business. this matter will be considered later. The argument bearing on the question referred to this Court is two-fold :- (a) that Section 41(1) of the Income-tax Act has no applicability as there are no persons who can be said to be the beneficiaries although there may be some specified objects for which the income is to be spent; (b) that in any case the proviso to Section 41(1) is inapplicable as the total income is below the taxable limit. There is no substance in the first branch of the contention for the obvious reason that the beneficiaries connoted by the temple, the dharmashala and the sadavart are all persons in the juristic sense. The idol installed in a temple is a juridical perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... force on April 1, 1939. On that date, the relevant part of the section as amended read as follows :- or any trustee or trustees appointed under a duly executed trust deed (including the trustee under any way deed which is valid under the Mussalman Waqf Validating Act, 1913) are entitled to receive on behalf of any person, the tax shall be levied upon and recoverable.... Does the word trust deed apply to a testamentary instrument which creates a trust ? The answer must be in the negative as will be presently shown. Section 5 of the Indian Trusts Act provides that a trust can be created either by a non-testamentary instrument in writing and registered, or by the will of the author of the trust. The non-testamentary instrumen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct which it removed by the Amending Act (XXIII of 1941) where the old wording of 1939 was substituted by the following :- or any trustee or trustees appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise. This Act No. XXIII of 1941 came into force on November 26, 1941. It does not purpose to be retrospective and the assessment already made in this case before that act came into force cannot be sustained. This was the view taken by the Madras High Court in Commissioner of Income-tax, Madras v. Venkatachalam Chettiar, with which we respectfully agree. The learned Government Pleader contended that the testamentary character of the trust ceased with the death of the author of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1), he did not pray for the inclusion of that point in the reference by the Appellate Tribunal to this Court. The assessee invites our attention to the case published in Charitable Gadodia Swadeshi Stores v. Commissioner of Income-tax, as an authority for the proposition that the trust business such as the present is not covered by clause (ia). That may or may not be so. That is a question which arises on the merits. But before we go into the merits, we have to decide whether we have jurisdiction to deal with a point which is not referred to us. In the present case, we know that it was not referred to us because the assessee accepted the Tribunals finding. We cannot admit any new question, even one of law, unless we are sure that we have po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw raised by the case referred to them by the Commissioner and it is for the Commissioner to state formally the questions which arise. Our attention is invited to Seth Gangasagar, In the matter of, Jai Dayal Madan Gopal, In the matter of and Vadilal Lallubhai Mehta v. Commissioner of Income-tax Bombay, but these cases are not ad rem as the observations made in them were in respect of a reference under Section 66(2) of the Income-tax act. They only lay down that when, on the mandamus issued by the High Court, the Appellate Tribunal states the facts of the case, but the issue or issues of law formulated by it are not clear or correct, it is open to the High court to frame and decide the issue of law. The present case does not fall under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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