TMI Blog1971 (11) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... endowed agricultural properties. The Mahant has been assessed in the status of an " individual " after the passing of the Orissa Agricultural Income-tax Act, 1947 (hereinafter to be referred to as " the Act "), for the assessment years 1948-49 to 1967-68 to various sums as mentioned in schedule A of the writ application. The assessments have been made after granting exemption under section 8 of the Act. In this writ application filed under articles 226 and 227 of the Constitution, the petitioner challenges the clause " and actually spent for the said purposes " in sub-section (1) of section 8 as unconstitutional and ultra vires. According to the petitioner, the entire agricultural income of the trust is not liable to tax under the Act. Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mutawalli and the basis of taxation shall be the share of each beneficiary. Explanation.- For the purposes of this section, a beneficiary means the settlor, his family, children and descendants. " The main contention of Mr. Mohanty is that section 8 of the Act grants exemption only to a sum actually spent for public purposes of a charitable or religious nature while section 9 grants complete exemption to agricultural income derived from properties held in trust by a Mussalman Wakf. Thus, sections 8 and 9 while providing for exemption of charitable or religious trusts discriminate between agricultural income derived from lands held under a Hindu public religious trust and a Mussalman wakf without any reasonable nexus although the object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definitely, while the property so dedicated was being enjoyed from generation to generation by the family of the wakif, were regarded as opposed to the rule of perpetuities as contained in the Indian Succession and the Transfer of Property Acts. This was so declared in a series of cases by the Judicial Committee (See Abdul Fata Mahomed Ishak v. Rasamaya Dhur Chowdhri, Mohomed Ahsanulla Chowdhry v. Amarchand Kundu and Abdul Gafur v. Nizamudin). In those cases their Lordships while emphasising that Mohamedan law ought to govern purely a Mohamedan disposition declined to hold that that disposition in which the benefit was really intended to go to the wakif and his family could be described as charity even under that law. These Privy Council ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the meaning of " charitable purpose " as such. The aforesaid Privy Council decisions and the history of the Validating Act and its effect were fully discussed in Fazlul Rabbi Pradhan v. State of West Bengal, and the principles enunciated by us are based on the Supreme Court decision. On the aforesaid legal position, the conclusion is irresistible that section 9 of the Act only deals with the cases of-wakf-alal-aulad and not other wakfs which are purely for public purposes of a charitable or religious nature. These wakfs come clearly within the ambit of section 8 of the Act. But for section 9, the class of wakf-alal-aulad would have come within the ambit of section 8. Wakf-alal-aulad essentially confines the dedication of the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the wakf property is spent for any public purposes of a charitable or religious nature so long as the property is tied down to the members of the family and the descendants of the wakif. The legislature is, therefore, justified in making proper classification and not allowing any exemption in case of wakf-alal-aulad and in taxing the share of the beneficiaries, treating each of them as individual though the tax is to be realised from the mutawalli. Mohamedan trusts for wakfs of a truly charitable or religious character come clearly within the ambit of section 8(1) and no discrimination is made between Hindu, Mohamedan, Christian or Sikh trusts. Section 8 is not hit by article 14 of the Constitution. Even assuming that there is any discr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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