TMI Blog2002 (4) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee-Roza Trust, provided the conditions mentioned therein are fulfilled. It was held that the actual expenditure on the Sajjadanashin and his family not exceeding Rs.30,000 would not be included in the income of the Roza Trust, but such amount spent by the assessee Sajjadanashin on his maintenance as Madad-E-Maash was taxable in his hands as income. The Tribunal restored the matter to the Income-tax Officer to assess the income of Rasulabad, Vasna, Isanpur and Sarsa lands as the income of the Roza Trust and grant the benefit under section 11 subject to fulfilment of the conditions mentioned therein, bearing in mind that the income actually spent by Sajjadanashin on his maintenance not exceeding Rs.30,000 was not to be included in the income of the Roza Trust. The Tribunal has in the above background referred the following questions in Income-tax Reference No. 135 of 1988 for the opinion of this court under section 256(1) of the said Act: "Questions at the instance of the Revenue (In Revenue Appeals Nos. 402 to 409/Ahd of 1985): (1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal has been right in law in holding that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l was justified in law in holding that the maintenance and Madad-E-Maash expenditure incurred by the trust on the assessee and his family members was not expenditure for Khankah but was taxable income of the Sajjadanashin? Questions, at the instance of the assessee-Roza Trust in Revenue Appeals Nos. 388 to 398/Ahd of 1985: (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the maintenance and Madad-E-Maash expenditure incurred by the trust on Sajjadanashin and his family members was not expenditure for Khankah? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that actual expenditure incurred (not exceeding Rs.30,000 a year) in maintenance of Sajjadanashin and his family was not the income of the trust? (3) Whether, the Tribunal was justified in law in holding that the British Sanad granted to the assessee were not the documents of title?" Much historical interest has been evinced by the authorities and a detailed account is given in their orders with a historians thrill to show as to how the Dargah of Hazarat Pir Shah-E-Alam came into existence when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the assessee-Roza Trust. In the appeals, the Appellate Assistant Commissioner upheld the finding of the Income-tax Officer that the income was assessable in the hands of Saiyed Musamiya Haiderbux Razvi but cancelled the protective assessment which was made in the name of the Roza Trust. Against the order of the Appellate Assistant Commissioner, appeals were preferred by the Roza Trust before the Tribunal challenging the finding that the income in question was of Saiyed Musamiya Haiderbux Razvi and not of the Roza Trust, and that it was not exempted under section 11 of the said Act. According to the assessee-Roza Trust, the Appellate Assistant Commissioner had committed an error in setting aside the protective assessment on the ground that the income was not the income of the Roza Trust instead on the ground that it was exempted under section 11 of the said Act. In the appeals filed by Saiyed Musamiya Haiderbux Razvi, it was urged that the Appellate Assistant Commissioner had erred in holding that the income of the trust was assessable in his hands and not in the name of Roza Trust and that it was not exempted under section 11 of the said Act. The Department was aggriev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted before it, and held that all the requirements of the public religious endowment were satisfied. It held that, as per the Sanad, one Saiyed Mohammed was appointed by the "Farman" of Aurangzeb as the Sajjadanashin and Mutawalli of the Roza and, he was granted six villages comprising 80 bighas and 17 biswas of land exclusively for expenditure on the sacred mausoleum under the heads of expenditure: the tutors, people of the mosque, the seekers of knowledge, the carpet spreaders, the light kindlers, the travellers, and all other aspects of beneficience and charity and for Madad-E-Maash of the Sajjadanashin, his sons and descendants. The Tribunal held that in the translation of the Sanad which was supplied to it, there was no omission and the names of villages were clearly mentioned. It was held that the primary and dominant purpose of the grant was public religious and charitable and the maintenance of the Sajjadanashin (Madad-E-Maash) was only incidental to the primary object of the wakf. It was also held that the evidence regarding establishment of the wakf was so predominant that inconsistent conduct of Saiyed Musamiya Razvi or his ancestors cannot displace the existence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities under the Bombay Public Trusts Act, because, the suit was of the year 1948, while the Bombay Public Trusts Act came into force from 1950. It was argued that the income-tax authorities were not bound by any decision of the Charity Commissioner under the Bombay Public Trusts Act as to the existence of the public trust or about the fact whether any property belonged to the public trust. It was submitted that, in the process of assessment, it was incidental for the Assessing Officer to decide as to whom the property belonged, and therefore, notwithstanding the powers of the Charity Commissioner under the Bombay Public Trusts Act, the Assessing Officer can take a different view under the provisions of the Income-tax Act as regards the ownership of the properties which may have been registered as the properties of the trust. Learned counsel strongly contended that the authorities under the Income-tax Act were functioning under the Central law and, therefore, they would not be bound by any decision taken by a functionary under the State law. Therefore, the tax authorities have independent powers under the said Act to decide the ownership of the immovable property for determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , were in no way bound to follow the decisions taken under the Trusts Act. Learned standing counsel finally argued that the record shows that, in the past, the said Roza was registered as a wakf under the Musalman Wakf Act, 1923, but later on, on September 3, 1934, it was deleted by the Collector from the list of wakfs. Therefore, it could not have been again decided under the Bombay Public Trusts Act that the said Roza was a public trust, and that its properties were public trust properties. Therefore, the properties in question are required to be held of the individual assessee, i.e., the Sajjadanashin and the income was assessable in his hands and not in the hands of the Roza Trust. Learned standing counsel supported the reasoning of the Income-tax Officer, and contended that the findings of the Tribunal were not warranted by the material on record. Learned standing counsel for the Revenue, in support of his arguments, cited the decision of this court in CIT v. Thobhandas Jivanlal Gajjar [1977] 109 ITR 296 to point out that a Division Bench of this court has held that, it cannot be said as a broad proposition of law that the decisions of civil courts would operate as res judicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust directly and substantially in issue. It was submitted that the suit was contested on an assumption that the properties belonged to the Sajjadanashin as his private properties. It was contended that, in any event, it was a settled legal position that there was no res judicata against a decision being taken under the Bombay Public Trusts Act on the basis of an earlier order of the civil court, which could not have decided the questions entrusted to the Charity Commissioner under that Act. It was also submitted that the Rasulabad land was not the property of the trust and ought to have been held to be the property of the Sajjadanashin. In support of his contentions, learned senior counsel for the assessee cited the following decisions: (a) The decision of the Bombay High Court in Zooleka Bibi v. Zyed Synul Abedin, reported in 6 BLR at page 1058 was cited for the proposition that the office of the Sajjad-a-Nashin is a religious office, and he may also be a mutawalli of wakf property dedicated to charitable purposes. On the facts of the case, the court had come to the conclusion that, so far as the tomb of Syed Budruddin was concerned, he was not a religious person to whom any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for his maintenance and that of his descendants is the provision for him as a head of the institution. It is therefore a trust and not a personal grant. (e) The decision of the Bombay High Court in Mahomedhussein Daud Bhai v. Collector of Broach and Panchmahals, AIR 1945 Bom 157, was cited for the proposition that an inquiry under the Musalman Wakf Act, 1923, as amended by Bombay Act No. 18 of 1935 was confined to cases where the existence of the wakf was admitted. It was held that where the existence of the wakf was disputed, the District judge had no jurisdiction to make an inquiry into its existence. This decision was relied upon to meet the contention raised on behalf of the Revenue that the Roza Trust was earlier registered under the Musalman Wakf Act, but it was removed from the list by the Collector on September 3, 1934. (f) The decision of the Supreme Court in Dhaneshwarbuwa Guru Purshottambuwa v. Charity Commissioner, State of Bombay, AIR 1976 SC 871, was relied upon for the proposition that it would not be correct to say that the expression in this Sanad (an ancient Royal grant) cannot be in any way determinative of the nature of the temple or religious endowment as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7] 65 ITR 611 (SC), did not and could not preclude the appellants from contending that the deed dated July 1, 1944, was illegal and of no consequence, and what had to be seen was whether the assessee was a public charitable trust on the basis of the partnership deed dated November 28, 1941, and that the power to revoke the trust was taken away by a subsequent document dated August 26, 1943. It was held that the Tribunal was therefore right in considering the objects and coming to the conclusion that the appellant was a public charitable trust and was entitled to exemption under section 4(3)(i) of the Indian Income-tax Act, 1922, and section 11 of the Income-tax Act, 1961. (i) A Division Bench judgment of this court in Letters Patent Appeal in Sayed Mohomed Baquir-El-Edroos Valde Sayed Jaffer-El-Edroos Sajjadnashin of Edroos Gadi v. Alimiya Mahmadmiya 13 GLR 285, was cited for the proposition that the statutory authority is bound to hold an inquiry under section 19(1) of the Bombay Public Trusts Act as laid down by the statute and by no stretch of imagination, such statutory officer could ever be precluded from performing his statutory duties by invoking a rule of estoppel, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel for the Revenue, there was no valid reason for the appellate authority to upset these findings which were approved by the first appellate authority. It will be noticed that the Tribunal, on its own appreciation of the evidence on record, came to the conclusion that the properties in question belong to the Roza Trust and, therefore, its income was assessable in the hands of the Roza Trust. The Tribunal did not blindly rely upon the findings given by the Charity Commissioner and made its own assessment of the material on record for reaching the said conclusion. In the process, it held that the decision of the Bombay High Court in First Appeal No. 188 of 1952 did not preclude inquiry into the question as to whether these properties were belonging to the said public trust or not. It was held that the decision of the Bombay High Court did not operate as res judicata. We have noted above the fact that, in Inquiry No. 176 of 1956 initiated under section 19 of the said Trusts Act of 1950, by order dated March 7, 1956, the Deputy Charity Commissioner held that the Roza Trust was a public trust and that the property shown in the application was the property of the trust. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppreciate how these properties can be regarded as impartible". The Deputy Charity Commissioner, therefore, held that there cannot be any bar of res judicata by virtue of the decision in the said appeal and the other cognate appeal and the question whether the lands of these four villages were the property of the public trust was being determined for the first time in the inquiry under the Special Act, and that it was not directly in issue before the High Court. The Charity Commissioner also considered the proceedings which led to First Appeal No. 188 of 1952 before the High Court in paragraph 31 of his order and observed that the question as to whether the Rasulabad lands belonged to Shah-E-Alam Roza or were private properties of Syed Imam Haiderbux was never put in issue in that suit and hence, there was no decision on that point. It was noted that the parties who were claiming these lands to be partible as if they were the properties of the deceased, were not interested in saying that the lands did not belong to the deceased, but belonged to the Roza Trust. It was also noted that the Shah-E-Alam Roza which was a public wakf was not a party in Civil Suit No. 72 of 1943 or in Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kf is concerned, the registration of such public trust is done under the provisions of the Bombay Public Trusts Act, 1950, since the provisions of the earlier Wakf Act, 1954, and the later Wakf Act of 1995, were not extended to Gujarat. As provided by section 3(2) of the Wakf Act, 1954, it was to come into force in the State on such date as the Central Government may by notification appoint. Therefore, the said Act did not apply automatically to all the States. It was made applicable to the Union Territory of Hyderabad with effect from January 15, 1955, and, therefore, it applied to the area known as Marathavada which was part of the State of Hyderabad till November 1, 1956. After Marathavada area became part of the State of Bombay under the States Re-Organisation Act, 1956, the said Act of 1954 continued to apply to that area. So far as the Gujarat State is concerned, the Act of 1954, was applied to Kutch area from January 15, 1955 (i.e., before its formation on May 1, 1960), and, therefore, the Act continued to apply to the Kutch area. Therefore, the Bombay Public Trusts Act, 1950, is applicable in Gujarat, except the area of Kutch to which the Wakf Act, 1954, applied. The Wakf A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Act, or in respect of which the decision or order of such officer or authority has been made final and conclusive. Therefore, the civil court's jurisdiction to decide any question as to whether or not a trust exists and such trust is a public trust or particular property is a property of such trust which is required to be decided by the Deputy or Assistant Charity Commissioner or the Charity Commissioner in appeal and which is treated as final and conclusive until set aside by the court on application or the High Court in appeal, is expressly taken away by the said provision. Civil courts have, under section 9 of the Code of Civil Procedure, jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred, and as per Explanation 1, a suit in which the right to property or to an office is contested is a suit of a civil nature, notwithstanding that such right may depend entirely on the decision of questions as to religious rites or ceremonies. Section 9 of the Code of Civil Procedure, 1908, empowers the civil court to try all suits of a civil nature except where the jurisdiction of the civil court was expressl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnish particulars in the prescribed form, as provided in the Rules framed under the said Act. In order to ensure that the assessee has not underestimated the income, the Assessing Officer shall serve notice under section 143(2) on the assessee requiring him to attend his office or to produce or cause to be produced any evidence on which the assessee may rely in support of the return. The Assessing Officer is empowered to require the assessee to produce evidence on specified points under sub-section (3) of section 143 and after taking into account all the relevant material which he may have gathered, the Assessing Officer makes assessment of the total income or loss of the assessee and determines the sum payable by him or sum that may be refundable on the basis of such assessment. When the assessee fails to comply with the notice, the Assessing Officer, after taking into account all relevant material which he may have gathered, has to make the assessment of the total income or the loss to the best of his judgment under section 144 of the said Act. For the assessment of income, a question may often arise before the tax authority as to whether the particular property belongs to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t extent it is applied to such purposes. If, however, the question whether the property is held by the trust, or whether there exists such trust, has not been finally adjudicated by the competent forum, the Assessing Officer can even go into the question of title for the limited purpose of deciding what income is derived from the property held under such trust. It, however, cannot be countenanced that even where there is a final adjudication of the fact by a competent statutory forum under the Bombay Public Trusts Act, 1950, that there is a public trust, and that the particular property is held by such public trust wholly for charitable and religious purposes, the assessment officer can simply ignore those findings, which may in a given case have been upheld till the apex court, and play a different tune by pronouncing that there is no such public trust or that the property in question is not that of the public trust despite these having been so registered under the provisions of the said Act. The authorities functioning under the laws made by Parliament are not required to ignore the provisions of the laws made by the legislation of the State which operate in full force within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority is required to give due weightage to the material which is relevant and which shows the registration of a public trust and its properties under the provisions of the Bombay Public Trusts Act, 1950, in light of the provisions of sections 19, 21(2), 79 and 80 thereof, and, to assess the person concerned, keeping in view such relevant material which may be produced during the assessment proceedings. Therefore, the Tribunal could have safely relied upon the findings of the Charity Commissioner reached under the Bombay Public Trusts Act, 1950, for holding that the Roza Trust was a public trust and that the lands shown in the register were the properties of the said trust. The Tribunal has, however, on its own, after considering all the material which was also the subject-matter of consideration before the Charity Commissioner, come to its own finding that the properties in question belong to the Roza Trust which was a public trust. We do not find any valid reason to disturb the conclusions reached by the Tribunal and in fact, we are of the opinion that the conclusions are fully warranted by the material on record. As noted above, the Deputy/Assistant Charity Commissioner ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as the Charity Commissioner have held that the decision of the Bombay High Court did not operate as res judicata, because, the Roza Trust was not a party before it and the question whether the properties were of the said public trust was not directly and substantially in issue. In this context, we may note that a Division Bench of this court in Kuberbhai Shivdas v. Mahant Purshottamdas Kalyandas [1961] 2 GLR 564, while considering the provisions of the Bombay Public Trusts Act, 1950, held that the inquiry made by a Deputy or Assistant Charity Commissioner is by no means an administrative or an executive inquiry but a judicial inquiry, and that the inquiry is not only for the purpose of registration. It was held that the Bombay Public Trusts Act was a complete Code for dealing with matters set out in sections 18 and 19 and recourse must be had to the procedure laid down in the Act. It was also held that the provisions of section 79 shall, with a finding of any entry made under sections 19, 20 and 21, constitute not merely an administrative order for the purpose of registration only or an order as between the Charity Commissioner and the trustee only, but such a finding and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout the properties of that trust under the provisions of the Bombay Public Trusts Act, 1950. The contention raised on behalf of the Revenue that expenses incurred on Sajjadanashin by the Roza Trust cannot be exempted under section 11 of the Act, is misconceived. The provision for a Sajjadanashin is not a provision for the man, but for the institution, as noted above. The Sajjadanashin as a spiritual leader is an integral part of the Roza Trust and the expenses which may be incurred on the Sajjadanashin by the Roza Trust would not be expenses incurred for a private purpose. As held by the Patna High Court in Mohammad Kazim's case, AIR 1932 Patna 33, the provision for the maintenance of the Sajjadanashin is the provision for him as the head of the institution and it is a trust and not a personal grant. We respectfully agree with that view. Such expenditure on the Sajjadanashin also described as Madad-E-Maash was included within the definition of "wakf" under section 3(1) of the Wakf Act, 1954, which can provide guidance in the matter. As per that definition, "wakf" meant the permanent dedication by a person professing Islam or any other person, of any movable or immovable propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held by the Charity Commissioner and as also held independently by the Tribunal, warranting no interference by this court by taking a different view of the matter. In the above view of the matter, we are of the opinion that the Tribunal was right in holding that the judgment of the Bombay High Court did not operate as res judicata, and that Saiyed Musamiya was not prevented from taking up a stand that the properties belonged to the Roza Trust. It was also right in holding that the Roza Trust was a wakf and that the complex of buildings and the lands at Rasulabad were the wakf properties belonging to it, and that the lands at Vasna, Isanpur and Sansa were also wakf properties belonging to the Roza Trust. It also correctly held that the exemption under section 11 of the said Act was available to the assessee-Roza Trust in respect of the income spent as "Madad-E-Maash" on the maintenance of the Sajjadanashin, his family and his descendants to the extent of Rs.30,000 a year, and that the exemption under section 11 of the said Act was available in respect of that amount to the aforesaid extent. The Tribunal has also rightly held that the exemption under section 11 of the Act was ava ..... X X X X Extracts X X X X X X X X Extracts X X X X
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