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TMI Blog2005 (10) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that property No. 16/72 Civil Lines, Kanpur, was not transferred to the trust by means of a registered deed as required under section 17 of the Registration Act, meaning thereby the assessee continues to be owner of the said property. Such act of the assessee amounts to transfer within the meaning of section 63(d) of the Act. It was brought to the notice of the Income-tax Officer that the said trust, namely, Chandra Kanta Jawahar Lal Public Charitable Trust, Kanpur, has been granted registration by the Commissioner of Income-tax, Kanpur, under section 12A of the Act. This plea was not accepted by the Income-tax Officer with the observation that whether income of the trust is exempt or not will be decided on the merits of the case. In appeal, against the assessment order the plea of the assessee was partly accepted. The appellate authority, namely, the Commissioner of Income-tax (Appeals), took the view that there is no material on record to show that the trust was a benami of the assessee and that the assessee had charged any fee for personal services rendered by her to the trust. The Commissioner of Income-tax (Appeals) was of the view that although house property No. 16/7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Trust, Kanpur, by means of a registered deed on April 18, 1976, and she settled Rs. 1,100 on the trust. Eight persons were appointed as trustees of the trust. The trust came into existence on account of the deed of declaration which was executed on April 18, 1976. The objects of the trust admittedly were charitable in nature. The Commissioner of Income-tax has recognised the said trust as charitable trust under section 12A of the Act on September 28, 1979. It was also granted a certificate on the same date under section 80G of the Act by the Commissioner of Income-tax. The trust maintained regular books of account, which are duly audited. According to the assessee on April 1, 1977, she endowed and dedicated the aforesaid property situate at 16/72 Civil Lines, Kanpur, together with the hospital and nursing home including all buildings, land and the right therein or appurtenant therein for the public charitable purposes of rendering medical services and relief to the poor and weaker sections of the society in particular and the public in general. Subsequently the assessee confirmed the endowment through a declaration dated April 7, 1977, which is an unregistered document in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the income from the said property in the hands of the assessee. In contra, learned counsel for the assessee submitted that the trust was already created by means of a registered deed dated April 18, 1976. The creation of the said trust is not in dispute. It is also not in dispute that the said trust was created for charitable purposes and admittedly its objects are charitable in nature. In view of the order passed by the Commissioner of Income-tax under section 12A of the Act treating the said trust as charitable trust, it is no longer open to any income-tax authority to treat the property in question as belonging to the assessee. After hearing learned counsel for the parties at length we are of the opinion that the main question which requires determination in the present references is whether it is necessary for a Hindu to execute a registered deed for creation of the religious and charitable endowment. In other words whether a Hindu can create religious and charitable endowment orally as it was done in this case on April 1, 1977, and the declaration was reduced in writing subsequently on April 7, 1977. To begin with, we find that section 1 of the Trusts Act specifically e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch dedication is complete a public trust is created in contradistinction to a partial dedication which would only create a charity. A dedication for public purposes and for the benefit of the general public would involve complete cessation of ownership on the part of the founder and vesting of the property for a religious object. Although the dedication to charity need not necessarily be by instrument or grant, there must exist cogent and satisfactory evidence of conduct of the parties and user of the properties which show the extinction of the private secular character of the property and its complete dedication to charity. It has been further held that dedication would mean, complete relinquishment of the right and ownership and proprietary. Very recently the apex court again examined the aforesaid issue in the case of Thayarammal v. Kanakammal [2005] 1 SCC 457. It was a case where a Hindu dedicated the property as "Dharmachatram", meaning "choultry" of South India where travelers or pilgrims can take shelter and can be provided with refreshment. The said dedication was inscribed on a stone which was fixed in the property itself. The stone inscription is of the year 1805. The S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted by the Department. The only objection to such dedication is with regard to non-registration of the deed of declaration dated April 7, 1977. We are of the view that the dedication of the property on April 1, 1977, is fully established on record. It is supported by clinching material. The trustee of the trust accepted the said dedication by passing a resolution and giving thanks to the assessee for such dedication. It has been followed by action such as the property in question has been mutated in the municipal records in favour of the trust. It has been further followed by a declaration granted by the civil court through a decree in a suit in which the assessee was impleaded as a defendant. In view of the surrounding facts and circumstances of the case the dedication of the property in question by the assessee cannot be disputed and was rightly not disputed by the Department. Now we will consider the cases relied by upon by learned standing counsel in support of his submission. The earliest case relied upon by learned standing counsel is CIT v. Syed Saddique Imam [1978] 111 ITR 475. This is a Full Bench judgment of the Patna High Court. The issue before the Full Bench was with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 22 is to tax income from the house property, the real intention is to tax income of house property in the hands of such person who is the beneficiary or the person who is receiving income from such property. The apex court has considered the concept of ownership as given by different jurists in their jurisprudence. The decision has taken into account Dias on Jurisprudence, at page 400 wherein the concept of ownership has been dealt with in the following manner: "The position, therefore, seems to be that the idea of ownership of land is essentially one of the "better right" to be in possession and to obtain it, whereas with chattels the concept is a more, absolute one. Actual possession implies a right to retain it until the contrary is proved, and to that extent a possessor is presumed to be owner.' Again at page 404 the learned author says: 'Special attention should also be drawn to the distinction between "legal" ownership recognized at common law and "equitable" ownership recognized at equity. This occurs principally when there is a trust, which is purely the result of the peculiar historical development of English Law. A trust implies the existence of two kinds of concurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and whether the transfer amounts to a gift or not would bring into question the applicability of the provisions of the Gift-tax Act. Meaning thereby it was held by the Supreme Court that immovable property can be gifted only in accordance with section 122 of the Transfer of Property Act. The ratio laid down in the aforesaid case is distinguishable inasmuch as in the case in hand the question of validity of a gift is not at all involved. As held by the apex court in the case of Kuldip Chand v. Advocate-General to Government of H.P. [2003] 5 SCC 46 and Thayarammal v. Kanakammal [2005] 1 SCC 457 dedication of property by a Hindu to public religious and charitable endowment is neither a gift as understood in the Transfer of Property Act nor is a trust, the argument of learned standing counsel is liable to be rejected. We fail to understand for what purpose learned standing counsel has relied upon the judgment of the Supreme Court in the case of Annaimuthu Thevar (Deed.) v. Alagammal [2005] 6 SCC 202. The reliance placed on the said judgment is wholly misplaced one. It may not be out of place to notice a very recent decision of the apex court in State of Rajasthan v. Basant Nahata [ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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