TMI Blog1940 (7) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... in the first instance as to the proper designation or identity of the assessees. The assessment was first made by the Income-tax Officer upon the Ibrahimji Hakimji Trust on an income of ₹ 2,967 left after payments to charities and various beneficiaries had been deducted. An appeal was made against this assessment principally upon the ground that the Wakf as a charity was exempt, but also upon the question of the identity of the assessees. Before this appeal was decided, however, the Income-tax Officer came to the conclusion that this assessment was incorrect and he issued a second notice in the matter of this same income but addressed it, as he thought, to other assessees, namely, Seth Ibrahimji Hakimji, Ghulam Hussain Ibrahimji and others, Trustees of the Wakf properties of Seth Ibrahimji Hakimji as per Seth Ghulam Hussain Ibrahimji, Garden Road, Karachi . Though we accept for the purpose of this reference the finding of fact by the Commissioner that these two assessees, the Ibrahimji Hakimji Trust in the first case, and the Trustees by name in the second case, were different entities, and he answers the questions referred to us on this basis, were we deciding this questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... So it might be held that the second notice on the assessees under Section 22 in the circumstances of the case substantially complied with and was in effect a notice under Section 34. We must, however, treat this case on the basis that the two notices were on two different persons. Thus it might well be argued that the first assessment under the order dated 21st July 1937, was valid until it was set aside in appeal, and that the second assessment made under the order dated 14th January, 1938 and while the appeal against the first assessment was pending, was contrary to law because it was made after the first assessment, which had not been set aside and was still in force and the same income cannot be assessed twice in the hands of different persons. It appears, however, that it was agreed between the assessees and the Assistant Income-tax Commissioner that the appeal against the first assessment, when it came up for hearing before the Assistant Commissioner on the 5th October, 1937, should be adjourned pending an appeal to be made against the second assessment when it was made and that both appeals should be heard together. Otherwise the Assistant Commissioner would have heard th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But the second question really covers the decision in this case, whether it is the trustees or the beneficiaries under the Trust who are to be assessed to income-tax and it does appear that in answering this question as he has done, the learned Income-tax Commissioner has fallen into the same error as is referred to in the Bombay case of Commissioner of Income-tax, Bombay v. Abubaker Abdul Rehman and others, [1939] 41 Bom. L.R. 232; 7 I.T.R. 139 for in this case, as in that, the learned Commissioner quotes a passage from the judgment of the Bombay High Court in the case of Kantisen Mohanji Ganjawalla and Brothers, (Civil Reference No. 10 of 1937) as follows:- In the case of the other property involved the assessees did not purchase this, but it was conveyed to them by the trustees of a settlement under which they were the beneficiaries. It seems to me to be irrelevant to consider how the property vested in the association of individuals became vested in them. The question is how they have it and are using it. If they are using it for the purpose of producing income, I think the property is vested in them as an association of individuals, and they are properly assessable under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence to the decision of the case. After the extinction of all male descendants in the direct line the Wakf property was to go to its ostensible purpose, charities, such as Musjids, Madressahs, Musaffirkhanas of the Dawoodi Borah community and other uses such as the maintenance of the poor and needy of the Dawoodi Borah community. It was argued before us on behalf of the assessees that a Wakf being a dedication to God could not be the subject of taxation; but we think a difference must be drawn between property dedicated in name and in fact to God, in short a difference must be drawn between a private Wakf created, if not primarily, at least in part, for the maintenance of the settlor's family, and a Wakf created for charitable or religious purposes falling within the exception in Section 4(3)(i) of the Act. So far as the Wakf operates as a Wakf for charitable and religious purposes, so far, it appears to us, immunity from taxation can be claimed, but so far as the Wakf operates for the maintenance of the settlor's family or other quasisecular purposes, so far it appears to us the income is liable to taxation. This is the opinion of the Bombay High Court in the case of Ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The tax shall be payable by an assessee under the head 'property' in respect of the bona fide annual value of property consisting of any buildings or lands appurtenant thereto of which he is the owner, other than such portions of such property as he may occupy for the purposes of his business, subject to the following allowances. Now, we think this must mean that the annual value is the assessable income of the immoveable property. The person liable to taxation is the owner of the income of the annual value, and we think this is the beneficiary who receives and keeps the income and not the trustees who, in this case, are the mere channel through which the income passes to its names recipients. It is, we think, no answer to say that the trustees first receive the income, and a person is not immune from income-tax on his own income because he chooses to give that income away. But the trustees do not here receive an income which they can give away or retain as they wish. It is not their income; they cannot keep it; they must deal with it as the Trust declares. We think the decision in the case of Sir Currimbhoy Ebrahim [1934] 61 I.A. 209; I.L.R. 58 Bom. 317; ..... X X X X Extracts X X X X X X X X Extracts X X X X
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