TMI Blog1980 (1) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. This trust was created by one Shri Naraindasji Genda for religious and charitable purposes by a will dated 19th April, 1896, a copy whereof is filed as annex. A with the petition, cls. 6 and 7 of which recite the purpose of the said trust to be religious and charitable. Besides a temple and dharamshala this trust also owns many houses which are let out to various tenants of the trust. According to the petitioner, the rental income derived from the houses of the trust is exclusively used and applied for religious and charitable purposes and also for charitable institutions. The Property Tax Officer, Sagar (respondent No. 1), commenced proceedings under the provisions of the M. P. Nagariya Sthawar Sampatti Kar Adhiniyam, 1964 (hereina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Asst. Commissioner, Property Tax, Sagar, with directions that the accounts of the trust be examined and seen as to how the income was applied vis-a-vis the aims and objects of the trust. On remand, the Asst. Commissioner examined the accounts of the trust for the years 1970-71, 1971-72 and 1972-73 and held that the amounts spent by the trust were not spent exclusively for religious and charitable purposes. He, therefore, directed the Property Tax Officer to exempt only the temple and dharamshala and assess property tax in respect of all other buildings of the trust. In appeal before the Deputy Commissioner, Gwalior, decided on August 30, 1975 (annex. F), the order was maintained, against which this petition has been filed to quash the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g grounds, or other places for the disposal of the dead : Provided that the following buildings and lands or portions thereof shall not be deemed to be used exclusively for public worship or for public charity within the meaning of this section, namely: (i) buildings in, or lands on, which any trade or business is carried on unless the rent derived from such buildings or lands is applied exclusively to religious purposes or to public charitable institutions aforesaid; (ii) buildings or lands in respect of which rent is derived and such rent is not applied exclusively to religious purposes or public charitable institutions aforesaid." At the very outset, it may be made clear that the words and expression "religious purposes public wors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the properties is applied exclusively, for public charitable institutions; and (iii) that the rent derived from the properties is exclusively applied for religious purposes. The provisions of cl. (f) of s. 6 of the Adhiniyam unequivocally contemplate that a place of public worship and dhara etc., are exempt from payment of tax under the Adhiniyam. But, the provisions of that clause are subject to the conditions laid down in the provisos (i) and (ii) to the said cl. (f) of s. 6, according to which the buildings or lands covered by the said clause, shall not be deemed to be used exclusively for public worship or public charity within the meaning of s. 6(f) unless the rent derived from such buildings or land is applied exclusively t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in litigation also. If the trust is subject to any tax liability under some tax statute, it will be paid only out of the rental income and if the trustees feel it necessary to insure the trust properties or any part thereof against fire, theft or other damages they will have to pay premium for the same. In our opinion, these are all incidental expenses relating to and connected with the main objects of the trust which are exclusively religious and charitable. If the trust property is not properly maintained and proper accounts are not kept, the very existence of the trust will be in jeopardy and its object and purpose will be lost. In this view of the matter, simply because a part of the rental income is spent in the maintenance, repairs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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