9911796707
TMI Blog1998 (2) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... as given to the said sole trustee was contained in para. 8 of the deed, which reads as follows : "The said T. N. Venkatarama Chettiar shall from time to time after acceptance of the trust, operate on the fund in execution of the trust and spend out of the said fund in connection with temple festivals in Madras and other places like Conjeevaram, Tirupathi, Srirangam, Salem and other places, medical relief, the giving of alms including food to the poor on occasions of Hindu festivals as selected by him in his discretion, of the gift of sums of money to poor deserving persons for celebration of marriages and generally on any object of choultries, work houses, hospitals, etc." The aforesaid partnership deed whereby the appellant-trust was created, contained a clause which gave the partners a right to revoke the trust which had been created by the partnership deed. By a subsequent document executed on August 26, 1943, this clause containing the power of revocation was deleted. On July 1, 1944, the sole trustee executed a document purporting to be a declaration of trust. It referred to the carrying on of the partnership business by the earlier founders of the trust and for establishmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a detailed order, the Income-tax Tribunal came to the conclusion that the question as to whether the deed dated July 1, 1944, was validly executed, was not in issue in East India Industries' case [1967] 65 ITR 611. It further held that since an irrevocable trust had been created by virtue of partnership deed dated November 28, 1941, neither the founders nor the trustees had any right, in law, to vary the objects of that trust by executing another document dated July 1, 1944. The Tribunal, therefore, concluded that the decision of this court in East India Industries' case [1967] 65 ITR 611 could not prevent it from examining the terms of the objects of the trust contained in the partnership deed dated November 28, 1941, inasmuch as that a deed dated July 1, 1944, being regarded as void, continued to exist. After examining the objects of the trust as contained in the deed dated November 28, 1941, the Tribunal came to the conclusion that the objects of the trust were charitable in nature and, therefore, the appellant was entitled to be regarded as a public charitable trust which would enable it to get the benefits under the Act. At the instance of the Revenue, in respect of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant was not a public charitable trust, that question was final and binding and, therefore, the appellant could not contend that the court should examine the deed of November 28, 1941, in order to ascertain whether the appellant was a public charitable trust or not. Applying the principle of res judicata, the High Court answered the questions referred for the years 1962-63 to 1973-74 in the negative and in favour of the Revenue and then observed that in view of this it was not necessary to go into the other five questions which had been referred to it for the years 1957-58 to 1961-62. These five questions were accordingly returned unanswered in view of the answer which had been given by it in respect of the question relating to the later years. It has been contended by Shri Harish N. Salve, learned senior counsel for the appellant, that the High Court fell in error in not addressing itself to the main question which really arose for consideration in this case. According to learned counsel, in East India Industries' case [1967] 65 ITR 611 (SC), this court was not called upon to consider the validity of the trust deed dated July 1, 1944. It was merely called upon to consider whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as a public charitable trust. In the passage from the judgment quoted above, there is nothing to indicate that it was brought to the notice of this court in East India Industries' case [1967] 65 ITR 611, that the trust had been created by virtue of document dated November 28, 1941. In the judgment of the court there is no specific reference to this document. It is no doubt true that it is mentioned that the trust was created by the partners of the firm, K. Rajagopal and Company and that under the terms of the partnership deed it was setting apart 80 per cent. of the profits for charitable and religious purpose but the only trust deed which is referred to is the one dated July 1, 1944, which was executed by Venkatarama Chetty. It is this deed which was analysed and construed and not the deed which was executed by the two founders of the trust, viz., K. Rajagopal and Venkatarama Chetty (sic). The judgment also does not indicate that the question relating to the validity of the deed dated July 1, 1944, was ever in issue before this court. It is to be borne in mind that the appellant in that case was the donor to the trust and not the trust itself. Had the trust been a party to tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y it. It will be useful at this juncture to refer to the following passage from Tudor on Charities (6th edn.) at page 131, it is stated as follows : "When a charity has been founded and trusts have been declared the founder has no power to revoke, vary or add to the trusts. This is so irrespective of whether the trusts have been declared by an individual, or by a body of subscribers, or by the trustees." When the founders of the trust have no power to alter or vary the terms of the trust, a trustee appointed to manage the properties of the trust for securing its object, can under no circumstances be regarded as having such a power specially when the original deed dated November 28, 1941, does not bestow such power on him. Such a question also came up for consideration before the Madras High Court in Thanthi Trust v. ITO [1973] 91 ITR 261. Dealing with the question whether the founder of a trust had power to revoke the same, the court observed as follows: "It is well established that the subsequent acts and conduct of the founder of the trust cannot affect the trust if there has been already a complete dedication. (vide Krishnaswamy Pillai v. Kothandarama Naicken [1914] 27 MLJ 58 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
