TMI Blog1959 (6) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Seth Meghji Mathuradas executed a trust deed dated 4th May, 1943, which was got registered on 31st May, 1943. By this document a trust was created in respect of a sum of ₹ 3,50,000, which amount was to be held by the trustees for purposes wholly religious or charitable in character. Such purposes are mentioned in clause 1, sub-clauses (d)(i) to (v) of the said deed. It is common ground that these objects are objects cf wholly religious or charitable character and that the income of the trust would be exempt from tax and is not liable to be included in the total income of the trustees as contemplated by section 4(3)(i) of the Indian Income-tax Act. A printed copy of the trust deed is annexure ' A ' and forms part of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and the income is therefore exempt from taxation. In the alternative the Tribunal held that the proviso if held to be repugnant to the religious or charitable character of the trust then it is to be ignored and to the extent of the repugnancy the said proviso will not take effect. A copy of the Tribunal's order is annexure ' B' and forms part of the case. 4. On the above facts and circumstances of the case the following question of law arises and is referred for the opinion of their Lordships : Whether on the above facts and circumstances of the case, on the true construction of the trust deed dated 4th May, 1943, the property is held wholly for religious or charitable purposes and its income is liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses for the benefit of the members of the three upper or twice-born castes of the Hindu community; (iii) For the purpose of founding, maintaining, conduction, or helping an institution or institutions for the benefit of the three upper or twice-born castes of the Hindu community for the teaching and practice of arts and crafts industries with a view to making the persons taking advantage of such institutions earn their livelihood at the institution or elsewhere; (iv) In giving relief against distress or bodily ailment e.g., by opening, starting, maintaining and conduction hospitals or dispensaries, convalescent or nursing homes or sanatoriums or other like institutions or by giving donations to other hospitals, dispensaries, convales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in the deed of trust relating to the preference of members of the community of the settlor, and in particular of the members of the family and relatives of the settlor, to those who were not such members, became operative only where the necessary conditions applicable were equal, i.e., the claimants being poor and the object of help being religious or charitable in character. The Tribunal according held that the income from the trust properties was liable to exemption from tax under section 4(3)(i) of the Income-tax Act. In this reference, Mr. Joshi, who appears on behalf of the Department, has very fairly invited our attention to a recent judgment of their Lordships of the Supreme Court in Civil Appeal No. 396 of 1957, Trustee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dominant charitable intention expressed by the settlor, which authorised the trustees to select the parties in their absolute discretion for application of the income of the trust properties, was effected. It was only after the purpose or object was selected that the question of preference arose. In the case of the Trustees of the Charity Fund, Esplanade Road, Fort, Bombay the settlor, after setting out the charitable purposes, had directed in the deed of trust that in applying the income of the trust properties the trustees shall give preference to the poor and indigent relations or members of the family of Sir Season David, including therein distant and collateral relations : and their Lordships of the Supreme Court held that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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